The Avengers: Who’s Gonna Pay for That?

As some have already noted, the damage done to Midtown Manhattan in The Avengers could easily top $160 billion, all told (here’s the original source of that estimate).

That’s a lot of money. By comparison, as the link notes, the total impact of the September 11th attacks was about $83 billion and Hurricane Katrina cost about $90 billion. This is about as much as the two of those put together.

So… who’s gonna pay for all that?

Well, we talked about this subject generally back in December 2010, and the analysis has changed little since then. But The Avengers gives us a chance to apply those general principles to a particular set of facts.

I. Insurance Policies

The obvious first place to look would be the various property owners’ insurance policies. This is going to run into immediate problems. One is reminded of the insurance dispute surrounding the September 11 attacks. Larry Silverstein, the new lessee of the World Trade Center, argued that each of the plane collisions represented a separate “occurrence” under the policy, essentially doubling his potential claim. A federal court, after a jury trial, decided that was largely not true, also dealing with issues raised by the fact that the contracts hadn’t been fully completed at the time of the loss, and recovery was capped at $4.55 billion, less than the $7-odd billion Silverstein had originally sought. So in light of that precedent, it seems that the entire battle would be treated as a single “occurrence” for the purposes of insurance.

But the bigger problem is that this loss may be excluded entirely. Insurance policies have pretty much always included exclusions for war and civil unrest, and in the aftermath of September 11, the federal government enacted the Terrorism Risk Insurance Act, Pub. L. 107–297, 116 Stat. 2322, as a sort of statutory, federal reinsurance mechanism funded both by policy premiums and the Treasury, to assist insurers in meeting their obligations in the event of a designated act of terrorism.

Thing is though, this doesn’t obviously seem to be an act of “terrorism,” which is defined in the statute to mean an act which causes loss of life or property damage “as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion.” This doesn’t seem to be what Loki and the Chitauri were up to. They just wanted to conquer the world. So the Treasury, State Department, and Attorney General might decide, between them, that this wasn’t really an act of “terrorism” for the purposes of the Act, and refuse to certify it. There would certainly be a lot of political pressure exerted on them in an attempt to make the insurers pay.

The linked article is wrong about one thing though: whether or not the loss is considered an “act of God” is irrelevant. We talked about this back in our post on Thor, where we noted that “act of God” provisions are typically part of contracts other than insuring agreements, because insuring agreements are specifically intended to cover what would count as “acts of God,” i.e., lightning strikes, floods, fires, etc. Regardless, the incident still implicates the war/terrorism exclusion(s), so there’s likely no coverage.

II. S.H.I.E.L.D.

If S.H.I.E.L.D. can at all be considered part of the federal government’s “military forces,” then S.H.I.E.L.D. and its agents (i.e. the Avengers themselves) are entirely immune from civil suits. Why? Because the Federal Tort Claims act specifically excepts “Any claim arising out of the combatant activities of the military or naval forces, or the Coast Guard, during time of war.” 28 U.S.C. § 2680(j).

So two questions. First, does S.H.I.E.L.D. count as part of “the military or naval forces”? Second, is this a “time of war”?

As to the first, we talked about S.H.I.E.L.D.’s potential status on Monday. We concluded that while the way the entity is portrayed is somewhat ambiguous, the best solution seems to be classifying it as a US entity with international participation rather than an international entity with US participation. In that case, it’s almost certainly part of “the military forces,” as it’s hard to conceive of this being under anything but the Pentagon. Even if it were like the Coast Guard, which is normally under the Department of Homeland Security, it shifts to the Department of Defense during wartime.

But even if it were an international organization, the way these things typically work is that agents aren’t answerable to the international group directly, they’re merely loaned from national forces. The most obvious analog is UN Peacekeeping forces, which are composed entirely of contributions by member states. Exactly how liability for this works is pretty murky. Here’s an article discussing some of these issues with respect to some of the Peacekeeping activities in Haiti. The US, as we’ve seen, is already immune from suit, so there’s no joy there. But the UN’s liability is generally limited by treaty to that of its member states. Otherwise you could have a situation where a member state misbehaved but is immune under its own laws and the rest of the member states have to pick up the tab. Not gonna fly. So as it turns out that no matter how you slice this, S.H.I.E.L.D. is going to be immune as long as this is “time of war.”

Which it probably is. As discussed above, calling this “terrorism” and not “war” is going to be a pretty tough sell. Loki and the Chitaurans were trying to conquer the entire world, not to affect US domestic or international policy or get the civilian population to do much of anything. Which looks a lot more like “war” than “terrorism.” But we could wind up with the rather hilarious prospect of the State Department sending a message to Asgard, asking Thor to produce Loki for questioning on his motives for the invasion. Regardless, the fact that it really was an invasion, not just a bomb plot, is going to make this look a lot like war, and it seems plausible that a district court could reach that conclusion pretty quickly.

In short: S.H.I.E.L.D., and the federal government generally, aren’t obviously on the hook to pay for this. It seems likely that Congress would pass an act specifically directed at paying for this disaster, something it’s allowed to do, but it wouldn’t be liable for the damages in court.

III. Conclusion

Really, the only way this is getting paid for is if the government and/or private actors decide to pony up, essentially out of the goodness of their hearts. One can see Tony Stark being fairly generous here (or just using the opportunity to buy a lot of desirable real estate on the cheap), and it seems impossible that Congress wouldn’t come up with at least some funds here. One interesting idea would be to declare all of the alien tech salvaged to be the property of the federal government, which would, in turn, dedicate revenues from the research and sale of such tech to go towards the rebuilding of New York and then saved for other such disasters. But it would take specific statutory action to make that work.

43 responses to “The Avengers: Who’s Gonna Pay for That?

  1. The Marvel Who’s Who (or one edition of it) entry for Damage Control (the contractors who clean up after the super-fights) claimed that federal funds are available because Congress declared New York a permanent “disaster area” on account of the rifeness of supervillain activity.

    If I remember correctly, Tony Stark is also a major proprietor (not clear whether this means “closely held” or just “major stockholder”) of Damage Control… at least before the Kingpin moved to euchre him out of it.

    • That’s one legislative solution, but the comments from the Senator near the end of the movie suggest that such a law hasn’t been passed yet on Earth-199999.

      • James Pollock

        I’m going to offer a different view, here. Neither Loki nor his “army” are humans, therefore what we saw was not an “invasion” as part of a “war”. We don’t make war with anything but humans. (OK, we DO make war with various abstract concepts, such as drugs, poverty, and so on, but that’s a different thing.) When we try to kill all the roaches in our house, that’s not a war. And when a plague of locusts descends upon our defenseless farmlands, that’s not war, either.

      • And Damage Control Inc. doesn’t yet exist for the purposes of that particular ficton(1) either.

        (1) ficton – n. – specific time-space location in a specific alternate universe. Source of word: “Callahan’s Crosstime Saloon” stories written by Spider Robinson.

      • Ken Arromdeenet

        In the real world, there aren’t any sentient nonhumans that we might consider going to war with. So whether war is limited to humans or not isn’t something that we’ve yet determined–we’ve never had occasion to. Even if you personally have thought about it, there’s no general societal-wide consensus that that’s what the word means, simply because nobody’s had any reason to care. Once it actually matters whether war is limited to humans, we can then figure out which way we want the definition of war to go.

        Now, it’s true that ants exist in the real world, and we’ve decided that war doesn’t mean killing ants, but that doesn’t mean that war doesn’t apply to any nonhumans at all, it just means that war doesn’t apply to ant-like nonhumans.

      • Alright, so, LEGALLY, was Loki opening up a portal an act of war? I suppose the question comes down to whether or not he was in control of the Chitari or if the Chitari were like a swarm of bees that he unleashed on New York City. If Loki were actually a general leading an army (his words) then it is an act of war but if the Chitari are mindless and he is just opening aportal and just letting them through then he is commiting an act of terrorism.

        Similar questions: if Ant Man leads an insect attack on New York are the insects waging war of is Ant Man a terrorist? If Aquaman leads an attack of sea creatures against the surface world are they waging war or is Aquaman commiting a terrorist act? In both cases the insects and sea creatures are presumed to be sentient: Ant Man and Aquaman, respectively, are talking to them and they are presumably willingly following them so in that case I think the ants and seas creatures could be said to be literally invading forces and having them attack New York or teh surface world in general would be an act of war.

      • Ryan Davidson

        The Chitauri have language. Doesn’t seem to be any reason to call them “mindless.”

        Also, Aquaman is a foreign head of state, so legally, it’s probably impossible for him to engage in “terrorism,” since almost anything that might otherwise count would be an act of war.

  2. Are there any barriers to classification legally? Can the army simply walk in and declare all the Chitauri vessels military secrets and ban research into them? My understanding is that the US government can declare all knowledge in an area secret, so even if you make a discovery yourself (by disassembling the vessels, say) you can’t publish.

  3. The definition of terrorist intent you give is pretty broad, really, and may encompass outright war and invasion… “as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion.”

    Loki wants all humans to kneel before Zod, I mean Loki, and is using force to make that happen – looks like coercion to me. As for the United States Government, surrender and submitting to Loki’s rule are both policy and conduct, again most certainly coerced if that were to be the government’s decision – as opposed to launching a nuke at a major American city.

    As for Mender’s question about classification, I think the more interesting question than the alien tech is whether the government can classify (probably yes) and/or actually keep it secret that the Council behind SHIELD did decide to launch that nuke. I mean, really, can you see Tony Stark keeping quiet about that? Can you see any feasible way to make him keep quiet about it?

    • Even if terrorism and war have some similarities in theoretical objectives there are legal differences between the two. There might not have been a formal declaration of war by one party, but that isn’t an absolute necessity.

      • What I’m saying is that according to the article, the Terrorism Risk Insurance Act, an actual law, defines terrorism in such a way as to include wartime acts undertaken in order to coerce a foe (both government and populace) into surrender.

        But that’s just me assuming that the words in the law have their usual English meanings. Maybe there are special legal meanings of terms such as ‘coerce’, ‘coercion’, ‘policy’, and ‘conduct’ that manage to exclude my interpretation, or maybe there’s another section of the law specifically excluding wars and invasions from consideration.

      • Ryan Davidson

        Actually, if Congress has declared war, it doesn’t count as terrorism. And you’re using a definition of coercion so broad to render just about everything “terrorism.” I don’t think that’s a good reading of the text.

      • Ryan Davidson

        More specifically, the Act requires actions of “individuals”. If there’s any kind of state power behind it, then it doesn’t count.

    • Oh, wow.

      Was the bombing of Hiroshima and/or Nagasaki a “terrorist” act? The Japanese were “coerced” into surrendering.

      • By the definition in the statute referenced, no, because it’s specific to the United States, and yes, they most certainly were.

      • Well yes, Japan was coerced into surrender. However that (in the same manner as the invasion in the movie) was done by an organized military against another state. I don’t think the Chitauri are shown to be explicitly declaring war and their government doesn’t have any recognition by the U.S. government but organized armies fighting at the behest of their representative governments is a good starting point for the definition of ‘war’.

      • Since pretty much all acts of war are meant to “coerce” the opposing government… Yeah, if stand just right, and squint just right, and have the light at just the right angle… you could with almost no justification claim they were “terrorist” acts.

        But in reality, no. They were an act of one government against another, and conventionally that’s called “war”.

      • Chakat Firepaw

        It depends on which definition you are using. Under the Terrorism Risk Insurance Act, probably not. Under a broader, less legalistic, definition it was, (specifically of the ‘state on foreign population’ kind).

        The TRIA is aimed at ‘non-state group on non-occupying population’ terrorism. ‘State on foreign population’ is pretty much inherently a part of war, while ‘irregular forces on occupying population’ is pretty much moot for such a law.

  4. Mister Andersen

    Would Asgard be in any way liable for reparations given the vast swath of destruction both in New York and the entire Dark Energy research complex could arguably be traced back to their original incursion into US territory back in Thor

    • Christopher L. Bennett

      Not to mention that the Cosmic Cube, err, Tesseract was Asgardian technology to begin with.

      I’d wondered if maybe Thor would bring down an Asgardian construction crew to help rebuild the city (imagine Manhattan rebuilt to Kirbyesque specs). But it was pointed out to me that the local construction unions wouldn’t tolerate that.

      Anyway, wouldn’t it be neat if Marvel Studios did a Damage Control movie as a sequel to this?

      • It certainly would. It would do many hearts good to see a movie with a “based on comics created by Dwayne McDuffie and…” credit at the front or back end credits.

        A topic for another thread on another message board, perhaps…

  5. Isn’t Loki a god? Wouldn’t that make the entire Chitauri invasion an “act of god” without anyone being held legally liable? I can see insurance companies trying to argue that.

    • Ryan Davidson

      Doesn’t matter. There is no “act of God” exclusion in insurance policies, because most things which would be considered “acts of God” are either covered or specifically excluded elsewhere. The “act of God”–really force majeure–concept mostly applies to contracts other than insurance. So while insurance policies wouldn’t be affected for the most part, take the example of a contractor that had agreed to do renovations in one of the buildings. The property owner might say that the contractor is obligated to do the same work as before, which is now massively more expensive, for the same price. Similarly, the contractor might insist that the property owner pay the money when there’s no building left to renovate. In either case, the defending party could point to a “force majeure” or “act of God” provision–or just assert it in equity–and be permitted to escape the contract.

      Note that this is the same regardless of what the particular “act” is. Could be a fire. Could be the death of a critical party. Could be a labor strike. Whatever.

      But insurance contracts don’t generally have these clauses, because they’re specifically designed to guard against “acts of God.” What they do is specifically enumerate things that aren’t covered. e.g., war and terrorism.

    • Already covered, an insurance company might try to claim that but “Acts of God” are supposed to cover unexpected natural occurrences. Like volcanones erupting beneath Los Angeles. Loki being a deity from myth doesn’t make him responsible for Acts of God.

      See for a previous article on the same concept:

    • That’s addressed in the post: “acts of God” are precisely the sort of thing often covered by insurance (e.g. lightning, storms, etc).

      Also, “act of God” is really just a turn of phrase, not meant to be taken literally. It’s not about being caused by God (or a god) but rather not being caused by humans. “[A]n act of God is a casualty not due to nor contributed to by human agency, and a casualty preventable by the exercise of ordinary care is not an act of God. ” Uniroyal, Inc. v. Hood, 588 F.2d 454, 460 (5th Cir. 1979).

      It’s not clear to me whether Loki would have shown up with or without human intervention (i.e. did Loki need SHIELD’s experimentation with the Tesseract in order to open the initial portal to Earth?), but I think the invasion is so far removed from that human act that it doesn’t matter. The fact that Selvig helped open the second portal probably doesn’t matter, either, since he was under Loki’s control, which tends to eliminate the “human agency” requirement in my opinion.

  6. Aside from going after Asgard for damages, what about Loki, personally? Some sort of lien on his property, or something?

    • Ryan Davidson

      What property? He’s an Asgardian, currently detained in Asgard. US courts don’t have jurisdiction in Asgard, so he wouldn’t have any property against which a lien could be filed.

      • It would be an interesting case if a family attempted to sue the Asgardian pantheon in the same manner the Saudi government was sued over the 9/11 attacks, though judging by the past eleven years I doubt the plaintiffs would have much success.

  7. Just fyi, I think you miss-quoted that source you used for the damages, it shows the Japan earthquake at 122 billion.

  8. I read this out loud to my husband, who worked for Customs for twenty-some years, and he pointed out that all the alien tech is already forfeit to the US government because it was brought into the country illegally — Customs has the authority to sieze it all.

    Apologies if this was already mentioned in comments above. I’m on shipboard and paying ridiculous rates to be online, so I’m not reading comments. 😛


    • By that reasoning, any illegal alien could have the government take the shirt off his back and the wallet from his pocket before deporting him, if they could demonstrate he brought it into the country rather than obtained it here.

      • Ryan Davidson

        No. The reason the technology in question might be seizable isn’t because the immigrants are illegal, but because the tech itself presumably violates arms control laws.

        See here. Basically, if it shows up on the U.S. Munitions List, you need a license to move it across the border in either direction. So all that tech is presumptively forfeit on that basis.

        So your illegal immigrant’s personal effects aren’t really at issue here, because most of them aren’t subject to international arms control treaties.

      • There are other reasons it could be seized as well, including civil and criminal asset forfeiture, since it was used to commit a crime. Or, if the incident is considered an act of war, then it could be seized as spoils of war.

  9. Melanie Koleini

    The rules for customs confiscating property are way more complicated than that. I know very little about the laws governing imports so everything I say in this post might be wrong.

    I think the way it works is that some items (clothing, ordinary personnel property, documents) are more or less automatically OK to bring in the US. Some items (imports for resale, fresh fruit, ect.) are allowed only with approval. (You have filled out the paperwork, paid any tariffs and had the necessary inspections.) Some items are outright banned. Customs could confiscate banned items and items were you needed approval but didn’t get it. There is a legal process for people to try to reclaimed items taken by customs by I imagine the Asgardian won’t bother trying (and would probably lose the suit anyway).

  10. Ryan Davidson

    For those interested, we discussed federal arms control laws in more detail here.

  11. Since the abandoned or captured Chitauri tech – the Leviathans, “chariots” and infantry weaponry – was used as part of the first phase of an armed invasion of the planet by non-treaty signatories, it would be forfeit to the country in whose turf it was abandoned. I could see arms-limitation treaties and national statutes on arms sales having to be amended to take such situations into account, and that’s going to take years unless SHIELD is authorized by treaty to deal with the stuff.

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  17. Ironically, as the released of The Avengers DVD/Blu-Ray shows, SHIELD/the federal government HAS designated all alien tech salvaged to become property of the USA (this is viewed in the Marvel One-Shot short film, Item 47). Thus, in your Conclusion, you nailed it as to how the government could pay for the damage in the Battle for New York

    PS: Discovered the blog via your book…I’m hooked and literally telling everyone I know about this website.

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