The city is asking an appeals court to lower an Upper West Side philanthropist’s $45-million personal-injury payout — even though it wasn’t part of the lawsuit — because it’s afraid the payday sets a precedent that could force cash-strapped municipal agencies and authorities further into the red.
The city’s Law Department, the New York City Housing Authority, and the New York City Transit Authority are asking judges from Manhattan’s Appellate Division to lower the $45 million awarded to Marion Hedges, who suffered severe brain damage following the October 2011 incident at the East River Plaza mall in East Harlem when teens threw a shopping cart from a 79-foot-high landing outside a Target store.
Hedges, 55, won the record-setting award in 2018. The trial court judge slashed the amount in half but the injured mom of two is still battling insurance companies for the mall and its security firm for payment.
No public entities are party to the case, but the city’s legal minds fear the eight-figure award would set a dangerous precedent, driving up future legal costs in lawsuits against the city and transit authority, government lawyers argue in new court papers.
“The court’s vigilance is needed now more than ever,” Devin Slack, assistant corporation counsel for Mayor de Blasio’s Law Department, writes to a panel of appeals court judges.
“State and local governments across the country face unprecedented fiscal crises and are making deep cuts to public services, from education and health care,” he says in the recent brief.
The COVID-19 shutdown deprived the city of at least $9 billion in revenue.
“Why should the city and the MTA by pointing out their unquestionably difficult circumstances as a result of COVID deprive this one plaintiff of her justice and her day in court after seven years? That’s my response to this,” Hedges’ attorney, Thomas Moore, told The Post.
“The MTA is in the midst of a once in a 100 years fiscal tsunami that has demolished 40 percent of our revenue,” writes MTA lawyer Lawrence Heisler, noting that it faces a $16 billion deficit through 2024 with ridership at less than 30 percent of pre-coronavirus levels.
“That new reality demands that Courts condemn ‘anchoring,’ the practice of counsel asking the jury to return an unjustifiably high award. That practice yields results, seducing juries into delivering awards that differ wildly from reasonable compensation,” Heisler argues.
The MTA’s own personal injury payouts have skyrocketed from just $43 million in 2007 to $150 million in 2019.
“Many of the individual payouts are a direct result of the anchoring tactics that warp the deliberations of lay jurors,” Heisler writes.
The city and NYCHA’s litigation costs are similarly burdensome. The Big Apple faces about 17,000 new personal injury cases annually that result in average compensation of $100,000 each. That amount has quadrupled over the past seven years. NYCHA sets aside tens of millions of dollars yearly to fend off lawsuits.
“Raising the ceiling for pain and suffering awards would make a bad situation worse, to the detriment of the city’s residents,” de Blasio administration lawyer Slack adds in the brief.
The appeals panel is expected to rule on the matter by early next year.
“If the court upholds these outsized jury awards, and personal injury trial lawyers are allowed to continue these tactics, it will be open season on already cash-strapped city agencies,” said Tom Stebbins, director of the Lawsuit Reform Alliance of New York.
“Like sharks to a shipwreck, every lawyer in town will smell blood in the water while taxpayer-funded city and MTA budgets are drowning,” Stebbins told The Post.