Aegis Insurance Services, Inc. v. 7 World Trade Center Company, L.P., 2013 U.S. App. LEXIS 24101

Background

7 World Trade Center (7WTC), a 47‑story building completed in 1987 above a Con Edison electrical substation, suffered debris impacts and multiple fires when the North Tower collapsed on Sept. 11, 2001; firefighters withdrew and the building burned ~7 hours before collapsing and destroying the substation.
Con Edison (and its insurers) sued developers, designers and builders of 7WTC alleging negligent design/construction caused the collapse and loss of the substation.
District court dismissed claims against certain design/construction defendants for lack of duty and later granted summary judgment to developer/manager 7WTCo., finding the Sept. 11 events were unforeseeable and beyond the scope of any duty.
Con Edison proffered expert reports arguing 7WTC lacked redundancy/fire resilience (e.g., deficient fireproofing, transfer structures, lateral bracing) and would have survived an unfought office‑contents fire if properly designed.
The Second Circuit affirmed summary judgment but on alternate grounds: while a duty existed, Con Edison failed to show defendants’ alleged negligence was a cause‑in‑fact of the collapse given the unprecedented constellation of Sept. 11 events (aircraft impacts, extensive debris, multiple fires, water supply loss, and the FDNY decision to withdraw).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Existence/scope of duty	7WTCo. owed Con Edison a duty to design/construct 7WTC to avoid exposing the substation to unreasonable risk from building collapse or fire	Events of Sept. 11 (terrorist attacks and cascading consequences) were unforeseeable so no duty extends to those harms	Court: Duty existed — foreseeable risk of severe high‑rise fire places limits on design/ construction duties (district court erred denying duty)
Causation (cause‑in‑fact)	Experts: design/construction deficiencies made 7WTC susceptible to collapse from office‑contents fires; a properly built WTC7 would have survived an unfought fire	Collapse was caused by the extraordinary combination of events on Sept. 11 (debris damage, multiple uncontrolled fires, broken water mains, massive firefighter losses/withdrawal); collapse would have occurred regardless of asserted defects	Court: Con Edison failed to raise triable issue that defendants’ negligence was a cause‑in‑fact — summary judgment affirmed on that ground
Adequacy of expert proof	Experts provided modeling, photos, and opinions identifying vulnerabilities and asserting survivability absent design defects	Experts did not adequately connect alleged vulnerabilities to the unique etiology and severity of Sept. 11 events; opinions were speculative on causation	Court: Expert opinions too speculative to show a causal link given the unprecedented events; insufficient to defeat summary judgment
Foreseeability as proximate cause/ policy limits	Plaintiff need not show precise manner of accident; general risk of high‑rise fire is foreseeable	Extending liability would create uncontrolled, impermissibly broad exposure given the unusual chain of events	Court: Foreseeability shapes duty scope but here cause‑in‑fact analysis controls; policy concerns noted but decision rests on lack of causal link

Key Cases Cited

Derdiarian v. Felix Contracting Corp., 51 N.Y.2d 308 (N.Y. 1980) (plaintiff need not prove the precise manner of an accident; general character of risk suffices for duty/foreseeability analysis)
Palsgraf v. Long Island R.R. Co., 248 N.Y. 339 (N.Y. 1928) (scope of duty tied to risks within defendant’s range of apprehension)
Bernstein v. City of New York, 69 N.Y.2d 1020 (N.Y. 1987) (plaintiff cannot recover when multiple possible causes exist and causation remains speculative)
Hamilton v. Beretta U.S.A. Corp., 96 N.Y.2d 222 (N.Y. 2001) (foreseeability determines scope of duty but does not alone establish duty)
Alfaro v. Wal‑Mart Stores, Inc., 210 F.3d 111 (2d Cir. 2000) (elements of negligence under New York law)