Friday, November 19, 2010
The allocation neutral in the World Trade Center litigation reported today that 10,043 claimants have agreed to participate in the settlement. This number, which constitutes 95.1% of the 10,563 eligible claimants, apparently meets (just barely) the 95 percent threshold required under the terms of the settlement agreement. But the settlement agreement also required at least 90% participation and 95% participation by particular categories of claimants. The report filed today states that 87.4% eligible "Tier 1" claimants (2383 out of 2726) signed on. Does this mean that the settlement fails? Media reports suggest that the settlement is going forward, but I will be interested to find out whether all of the participation requirements were met.
In general, it comes as no surprise when a mass tort settlement meets a participation threshold, given that clients overwhelmingly follow their lawyers' advice to participate in a settlement. But the WTC litigation -- and particularly Judge Hellerstein's rejection of an earlier settlement proposal amid questions about whether a judge in a non-class action has any business "approving" or "disapproving" a settlement -- generated enough notoriety that reasonable observers might have wondered how claimants would react.
UPDATE/CLARIFICATION: The settlement agreement requires 90% participation by each category of claimants with "qualifying injuries" but does not require a specified percentage of participation by claimants with no qualifying injury. Tier 1 consists of claimants with no qualifying injury. Therefore, the participation levels do meet the requirement under the terms of the agreement.