The Destruction of the World Trade Center and the Law on Event-Identity
110 Pages Posted: 20 Feb 2004
This paper addresses the one-occurrence/two-occurrences insurance law issue with respect to the destruction of the World Trade Center, currently being litigated in the Southern District of New York Federal District Court. The casualty policy in force on September 11, 2001 provided for a $3.6 billion payout "per occurrence" of a covered risk, and the issue is whether two coordinated attacks destroying two towers was one or two occurrences. A review is initially undertaken of the causal test used by the law on such limits in both liability and casualty policies and of the policies that should guide such test. That review isolates two separable questions: (1) How far back in the causal chain (of events leading to the damage insured against) should a court look when it is counting occurrences for these purposes? And (2) What criteria for individuating events should a court use once it has isolated the correct time-slice at which to do the counting? The paper urges a novel solution to the first question, relying on a scalar idea of legal causation; it also urges an expectation-based theory for individuating occurrences in insurance contracts, a theory only partly relying on the underlying metaphysics of events. It then applies both answers to the facts of the World Trade Center dispute, concluding that there were two occurrences on September 11, 2001. The paper lastly takes up the role of definitions of "occurrence" occurring in some versions of the World Trade Center insurance policy, arguing that the Second Circuit was plainly wrong in its attempt to make such definitions definitive of the issue. Two uses of definitions in ordinary speech and the law are distinguished, and the error of the Second Circuit was to pick the least typical use of such definitions without even seeing the possibility of there being another (let alone a more typical) use.
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