A federal judge in Manhattan took the unusual step on Thursday of overturning settlements in four lawsuits filed on behalf of victims of the Sept. 11 attacks, saying the firm that negotiated the deals was seeking excessive legal fees and that the settlement amounts themselves were unreasonable. The judge, Alvin K. Hellerstein of United States District Court, sharply criticized the firm, Azrael, Gann & Franz, of Maryland, saying its request for 25 percent of $28.5 million it had recovered “would reflect a very large windfall,” and that its “entire strategy seems to have been to coast on the work of others.”
The four cases were among the last remaining suits being settled on behalf of 95 people killed or injured in the crashes of the four planes into the World Trade Center towers, the Pentagon, and the field in Shanksville, Pa., in 2001.
Judge Hellerstein wrote that the Azrael firm appeared, as part of its strategy, to have decided to wait until very late in the litigation before entering into meaningful settlement talks.
“Azrael’s strategy made little contribution to the progress of the cases before me,” and was “now an affront to the hard work that others contributed,” the judge wrote.
The lawsuits represented only a small number of the 9/11 victims, whose claims in most cases were resolved through payments from a government compensation fund that paid $7 billion to families of those killed or injured in the attacks, according to the fund’s 2004 report.
The judge noted that 15 law firms had handled the lawsuits. He said he had taken steps, like limiting contingency fees to 15 percent and requiring judicial approval of settlements, to make sure they were fair.
He also said that there should be no advantage to being late or early in the settlement process.
A spokesman for the Azrael firm did not respond to messages seeking comment. Judge Hellerstein noted that the firm claimed it had done “outstanding work” to earn the fee, and had produced higher settlements. The firm also argued that because the settlement proceedings were confidential, “no one will know about a higher fee award,” the judge wrote.
The four settlements ranged from $5.5 to $8 million, the judge said, and all involved what he described as “modest wage earners at the Pentagon.” He called the settlement amounts “disproportionately large” when compared with similar cases, and noted that a 25 percent fee would have yielded just over $7 million.
The judge said that he made an exception for one firm, Motley Rice, which received 20 percent in three of its cases, because it had done more work, and had prepared those cases for trial. (None ended up being tried.)
Donald A. Migliori, a partner at Motley Rice and co-liaison counsel for the wrongful-death and personal injury claims, said he was concerned about the overturning of the four settlements, when they “were agreed to by all parties to be fair and reasonable.”