Once the Secretary of Treasury certifies an act of terrorism, any negligence claim or other tort claim for property damage, injury, or death can be pursued only under federal law. Indeed, the Act creates an exclusive federal cause of action for such damages. All State law causes of action of any kind for property damage, personal injury, or death arising out of or resulting from an act of terrorism are preempted by this exclusive federal cause of action.
Although State law is preempted, the substance of this exclusive federal cause of action will draw from the law of the State where the act of terrorism occurred, unless that law is inconsistent with or otherwise preempted by federal law.
Importantly, the federal cause of action will be based on the laws of the State where the act of terrorism occurred even if the breach of duty or injury occurred in a different State. For example, one could suppose an act of terrorism in New Jersey results in a mandatory evacuation of an airport in New York. During the evacuation, an airport patron is negligently struck and injured by an emergency response vehicle. On the assumption that this injury “arose out of an act of terrorism,” the claimant would pursue recovery under an exclusive federal cause of action based on New Jersey law, although the duty of care was breached and injury was sustained in New York.
This federal cause of action does not in any way:
- Limit the liability of any government, organization, or person who knowingly participates in, conspires to commit, aids and abets, or commits any act of terrorism;
- Affect any party’s contractual right to arbitration; or
- Affect any provision of the Air Transportation Safety and System Stabilization Act.
 Terrorism Risk Insurance Act, Sec. 107(a)(1); 31 C.F.R. § 50.100(a).
 Terrorism Risk Insurance Act, Sec. 107(a)(2).
 Terrorism Risk Insurance Act, Sec. 107(a)(3).
 31 C.F.R. § 50.100(d).