The World Trade Center on September 11, 2001 Photo: Photo: Rick Kopstein/NYLJ

A three-judge panel of the Manhattan-based appeals court affirmed a Manhattan federal judge's ruling from last September, which found that the lawsuits against the Battery Park City Authority were moot in light of the $712 million settlement agreement between rescue and cleanup workers and the city and its third-party liability insurer, WTC Captive Insurance Co.

The lawsuits sought to hold the BPCA liable for allegedly failing mitigate the effects of toxic smoke and dust, which have been linked to serious, and sometimes fatal, respiratory conditions in first responders and remediation workers.

U.S. District Judge Alvin K. Hellerstein of the Southern District of New York, however, called those claims "conclusory" in granting the BPCA's motion to dismiss the suits last year.

In his ruling, Hellerstein said it was clear from the record that the city controlled the Stuyvesant site and "all debris removal" that took place there in the wake of the attacks. BPCA, he said, was meanwhile shielded by an indemnification agreement with the city and the earlier settlement agreement, which blocked "double recovery" for the plaintiffs in the remaining cases.

On appeal, the plaintiffs argued that the so-called "judgment-reduction provision" in the settlement should not apply to their lawsuits, which alleged that the BPCA had failed to maintain safe working conditions at a staging area in the high school, located just blocks from where the Twin Towers once stood.

According to the workers and their Napoli Shkolnik attorneys, plaintiffs had taken a smaller payout from the city on the understanding that they would also be able to recover from other defendants, like the BPCA, which they said was not a party to the original settlement.

The Second Circuit, however, said in a 14-page summary order that the settlement explicitly barred additional recovery from any parties that had indemnification claims against those insured through WTC Captive.

In affirming the lower court, the panel noted that while the BPCA was not a signatory to the 2010 agreement, it was a "third-party beneficiary" of the settlement, and was therefore entitled to enforce its terms.

"Indeed, the judgment-reduction provision would serve little purpose if it did not benefit other defendants like BPCA that asserted indemnification claims against insureds of the WTC Captive," the order said.

The panel included Judges Gerard E. Lynch, Richard J. Sullivan and Michael H. Park.

Counsel for the BPCA declined to comment on Monday's decision.

Paul Napoli, who represented the plaintiffs, said it was a "sad day in this city and country when the last remaining responders from the 9/11 Litigation are denied adequate compensation from the World Trade Center Captive and its insureds from the money provided by Congress."

"They should be ashamed that this is their legacy. Instead fat cat lawyers and executives take the money from these responders for their own gain," Napoli said in an emailed statement.

The plaintiffs were also represented by Christopher LoPalo and Nicholas Farnolo of Napoli Shkolnik.

The BPCA was represented by Daniel Connolly and Rachel Goldman of Bracewell.

The case was captioned In re World Trade Center Lower Manhattan Disaster Site Litigation.