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Second Circuit Allows ConEd World Trade Center Lawsuit

By Tanya Roth, Esq. | Last updated on

The Second Circuit Court of Appeals ruled that Consolidated Edison may proceed with its lawsuit claiming the diesel fuel tanks permitted by the Port Authority to be under the twin towers fueled the fire during the September 11th attacks.

This Second Circuit opinion reversed the district court decision on the lease agreement between ConEd and the Port Authority. The appellate opinion said that the 43-year old lease agreement permitted ConEd to bring a reimbursement lawsuit against the Port Authority for the cost of rebuilding the substation, due to the negligence of the Port Authority in allowing the construction of the diesel tanks, reports Courthouse News.

The lease:

Under the terms of the original lease in 1968, ConEd leased a parcel of land from the Port Authority to build an electrical substation. The substation was to provide power to the World Trade Center and to the surrounding area.

According to the lease, the Port Authority was allowed to build on top of the substation and it did exactly so in 1980, with the construction of 7 World Trade Center and the emergency power backup system for the center. It then leased the space to two tenants, both of whom installed diesel fuel tanks and generators in the building.

In its arguments, ConEd claimed that the Port Authority should never have allowed the diesel fuel tanks to be installed, claiming that those fuel tanks contributed to the destruction of the substation, additionally stating that the Port Authority owed ConEd the money needed to rebuild those substations.

The Second Circuit decision wasn't all bad for the Port Authority, however. The court of appeals threw out the claims for negligent design and construction, citing that they were not within the statute of limitations.

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