Steering Comm. v. Port Auth. of New York (In re World Trade Ctr. Bombing Litig.)

• Citation: 933 N.Y.S.2d 164,957 N.E.2d 733,17 N.Y.3d 428,2011 N.Y. Slip Op. 06501
• Parties: In the Matter of WORLD TRADE CENTER BOMBING LITIGATION.Steering Committee et al., Respondents, v. The Port Authority of New York and New Jersey, Appellant.
• Decision Date: 22 September 2011
• Court: New York Court of Appeals

17 N.Y.3d 428

2011 N.Y. Slip Op. 06501

933 N.Y.S.2d 164

957 N.E.2d 733

In the Matter of WORLD TRADE CENTER BOMBING LITIGATION.Steering Committee et al., Respondents,

v.The Port Authority of New York and New Jersey, Appellant.

Court of Appeals of New York.

Sept. 22, 2011.

Weil, Gotshal & Manges LLP, New York City (Richard A. Rothman, Gregory Silbert, David Yolkut and Adam Banks of counsel), and Goldberg Segalla LLP, Mineola (Paul S. Devine of counsel), for appellant.

Davis Wright Tremaine LLP, New York City (Victor A. Kovner, Sharon L. Schneier, Edward J. Davis and Deborah A. Adler of counsel), Sullivan Papain Block McGrath & Cannavo P.C. (Brian J. Shoot of counsel), Richard J. Katz, LLP (Jonathan A. Rapport of counsel) and Fensterstock & Partners LLP (Blair C. Fensterstock of counsel) for respondents.

Fiedelman & McGaw, Jericho (Andrew Zajac, Dawn C. DeSimone, Rona L. Platt, Brendan T. Fitzpatrick, David Hamm and

Jonathan A. Judd of counsel), for Defense Association of New York, Inc., amicus curiae.

OPINION OF THE COURT

JONES, J.

This appeal, involving litigation arising from the 1993 terrorist bombing incident in the parking garage of the World Trade Center complex (WTC), raises critical issues regarding the interplay of the proprietary and governmental functions of a public entity and the provision of security, particularly against the risk of terrorist attack. First, we must determine whether the Port Authority of New York and New Jersey (Port Authority) was performing a governmental or proprietary function in its provision of security at the premises. Second, if the Port Authority was engaged in such a governmental function, we must consider whether it exercised discretion in its security decision-making to entitle it to the common-law defense of governmental immunity. We hold that the Port Authority is entitled to the protection of governmental immunity.

I

The Port Authority is a public entity jointly created by a 1921 compact between New York and New Jersey to oversee and operate critical centers of commerce and trade, as well as transportation hubs such as ports, airports, bridges, and tunnels ( see McKinney's Uncons. Laws of N.Y. § 6404 [L. 1921, ch. 154, § 1, as amended] ).¹ The Port Authority is a financially self-reliant public entity that draws its revenue and income from fees generated by its various properties, and not from the tax revenue of either New York or New Jersey.

Among its properties, the WTC was a key facility developed, constructed, and operated by the Port Authority. The WTC was created through 1962 legislation “for the benefit of the people of the states of New York and New Jersey” (McKinney's Uncons. Laws of N.Y. § 6610 [L. 1962, ch. 209, § 10] ) with “the single object of preserving ... the economic well-being of the northern New Jersey–New York metropolitan area” (McKinney's Uncons. Laws of N.Y. § 6601 [9] [L. 1962, ch. 209, § 1] ).

Structurally, the WTC was comprised of seven high-rise buildings erected on a 16–acre site—including the 110–story Twin Towers—which housed offices and various commercial establishments such as a hotel and a concourse of shops and restaurants. In addition, the WTC served as a center for various federal and state government agencies including, for example, the United States Secret Service and the New York State Police, among others. The complex contained six subgrade levels, B–1 through B–6, with parking facilities located on levels B–1 through B–4 for Port Authority personnel, WTC tenants, and the public. Sixteen hundred parking spaces were reserved for tenants and other WTC and Port Authority personnel, and 400 spaces were allotted for public parking by transient visitors.

The Port Authority employed a security force of 40 Port Authority police officers assigned on a full-time basis to a precinct located within the confines of the WTC. A second, separate contingent of officers was assigned to the PATH railroad station located within a subgrade level of the complex. In addition, numerous security personnel were deployed at the Port Authority's other facilities, tunnels, and bridges. The reserved parking, on levels B–2 through B–4, was patrolled routinely by Port Authority officers. Level B–1 was typically manned by civilian personnel with surveillance cameras trained on all the ramps leading to and from the parking garage. The Port Authority also retained, from 1989 to 1994, a separate, additional private force comprised of security guards employed by City Wide Security Services, Inc. These security guards patrolled the WTC, including the underground, subgrade levels.

Visitors essentially had unimpeded ingress and egress into the parking garage areas, but not the parking lot proper. For example, on the B–2 level, peripheral public parking areas were accessible as a driver would encounter a guard or gate only when entry was sought, from a ramp or roadway, into the parking lot itself. As such, a vehicle could be parked on an internal, underground roadway without actually entering a parking lot.

Starting in the early 1980s, the Port Authority engaged in exhaustive counterterrorism planning and investigation. In 1983, as a member of both the New York State Terrorism Task Force and the FBI's Joint Terrorism Task Force, it obtained access to confidential information pertaining to security threats against Port Authority facilities. As a result, it implemented a “Terrorist Countermeasure Planning” initiative whereby the Port Authority was able to exchange vital security intelligence with various federal and state agencies. Pursuant to this initiative, it established security protocols and response mechanisms, including a threat level system, for all of its facilities.

In the early 1980s, the Executive Director of the Port Authority expressed concern with “the threat of terrorist[ ] attacks on Port Authority facilities” due to “an emerging pattern in signs around the globe of terrorist attack.” In 1984, an internal report entitled “Terrorism Assessment World Trade Center 1984” was circulated among the management of the Port Authority and it concluded that the WTC “should be considered a prime target for domestic as well as international terrorists.” The WTC was a “high risk target” and its “parking lots [were] accessible to the public and ... highly susceptible to car bombings.”

Later that same year, the Port Authority created the Office of Special Planning (OSP) to study and assess the “nature” and “dimension” of the security risks faced by all of its facilities, and ultimately, to recommend appropriate security measures. The OSP staff consisted of police and civilian employees of the Port Authority and worked in tandem with federal and state agencies such as the FBI, CIA, National Security Agency, State Police, and New York City Police Department to evaluate security risks at all Port Authority facilities, including the WTC.

At the same time, the Port Authority retained an outside security consultant, Charles Schnabolk Associates, to study the risk of a terrorist attack on the WTC. Schnabolk's July 1985 report, entitled “Terrorism Threat Perspective and Proposed Response for the World Trade Center of the Port Authority of New York & New Jersey,” advised that bombing attempts were “probable” and “[t]he WTC is highly vulnerable through the parking lot.” Schnabolk identified the “parking lot, Concourse doors, [redacted]” as “highly vulnerable” such that “[w]ith little effort terrorists could create havoc without being seriously deterred by the current security measures.” The report recommended, among other measures, that “[v]ehicles coming to the Port Authority parking areas may be screened for the presence of explosives” by inspecting trunks and undercarriages of cars. In a letter accompanying the report, Schnabolk impressed upon the Port Authority the “urgent” need to implement “many or most” of the recommended security measures.

In mid–1985, the OSP issued a preliminary study entitled “WTC Study Brief,” where it hypothesized various terrorist attack scenarios while assessing the specific vulnerabilities of the WTC. This preliminary report considered the possibility of a “[b]omb-laden truck attack” and that “[a] strategically positioned truck or van could cause extensive structural damage to the Trade Center as well as a large number of casualties.” Among “[k]ey questions to be raised” were “[w]hat areas provide[d] the largest ‘bang for the buck’ for various amounts of explosives in a truck or van (e.g., across the street from the WTC, in the parking lot below the Trade Center, etc.).”

In November 1985, the OSP issued a formal report entitled “Counter–Terrorism Perspectives: The World Trade Center” which addressed the threat of terrorism with respect to the entire WTC complex. The report theorized as “Option Nine” that a “time bomb-laden vehicle could be driven into the WTC and parked in the public parking area. The driver could then exit ... At a predetermined time, the bomb could be exploded in the basement.” The risk assessment section of the report stated that although “the real possibility of an incident occurring at the WTC does exist; ... it is not considered to be a high risk situation at present.” Concomitantly, OSP concluded that “terrorist events,” particularly car bombings in the parking garage were considered “low risk.”

Within the same report, myriad recommendations were proffered on how to bolster security within the WTC. With respect to the parking garage, the idea of entirely eliminating public parking was advanced along with alternative measures such as manned entrances, restrictions on pedestrian access to parking area ramps, random vehicle inspections, and dog patrols. However, manned entrances were considered to be an ineffective deterrent; limits on pedestrian access were considered futile because the parking areas could still be accessed in other ways; and random vehicle inspections were deemed...