dojN002245.xml

dojN002245.xml

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2002-01-22

Tuesday, January 22, 2002 11:39 AM
Comments on Victim Cmpensation Fund Interim Final Rule

Kenneth L. Zwick, Director
Office of Management Programs
Civil Division
U.S. Department of Justice
Main Building, Room 3140
950 Pennsylvania Avenue
Washington, DC 20530

RE: Comments on Victim Cmpensation Fund Interim Final
Rule

My neighbor was killed at the Pentagon on September
11. I have been following the Victim's Compensation
Fund issue for that reason. I offer the following
comments:

The Interim Rule/Regulation describes the following
intent of Air Transportation Safety and System
Stabilization Act:

The Fund is designed to provide a no-fault
alternative to tort litigation for individuals who
were physically injured or killed as a result of the
aircraft hijackings and crashes on September 11, 2001
{Interim Rule/Regulation, Summary Paragraph A.1.}.

The attached regulations have two objectives: (1) To
provide fair, predictable and consistent compensation
to the victims of September 11 and their families
throughout the life of the program; and (2) to do so
in an expedited, efficient manner without unnecessary
bureaucracy and needless demands on the victims.
{Interim Rule/Regulation, Supplementary Information.}.


The Interim Final Rule fails to meet the intent of
Congress, however, because many victims families will
net nothing after collateral source funds are
subtracted from the already undervalued economic and
non-economic loss projections.

The Interim Final Rule understates economic loss by
underestimating the lifetime earning potential of
victims at all income levels. Noted economists at the
National Association of Forensic Economists showed
that the Interim Final Rule uses outdated statistics
and inappropriate methods to arrive at low estimates
of future earnings. An analysis done by one of these
economists showed that the actual earnings growth for
firefighters is 27% higher than the DOJ estimate, the
actual earnings growth of all college educated workers
is 30% higher than DOJ indicates, and actual earnings
growth for financial professionals is more than 100%
higher than the DOJ estimate.

The Interim Final Rule also falls short of Congresss
goals for non-economic loss. The figure for presumed
non-economic loss compensation of $250,000 plus an
additional $50,000 for the spouse and each dependent
is rationalized as being roughly equivalent to the
amounts received by public safety officers who were
killed while on duty, or members of the military who
are killed in the line of duty while serving our
nation. With all due respect to such public safety
officers and military personnel, they choose to go
into harms way and their loss is not the result of
corporate negligence. On the other hand, the
September 11 victims are theoretically victims of
negligent airline and airport security. The September
11 Victims Compensation Fund is supposed to provide a
no-fault alternative to tort litigation for
individuals who were physically injured or killed as a
result of the aircraft hijackings and crashes on
September 11, 2001. Perhaps more realistic guidance
as to the value of non-economic loss can be found in
other air crash disaster awards. For example,
non-economic losses recovered in other air crash and
terrorism cases commonly result in awards of between
$2 million and $5 million. Awards for non-economic
loss values under the Victim Compensation Fund should
probably fall somewhere between the current proposal
and a litigation result award.

The Interim Final Rule reduces any compensation
awards by the amount of funds received from collateral
sources, including life insurance. The Interim Final
Rule presumably does this because Congress included
such a provision in the Air Transportation Safety and
System Stabilization Act. That does not make it fair;
that does not make it right. In many states,
including my state of Virginia, the law on the
collateral source rule has been well settled for over
one hundred years. Under that rule, damages
recoverable for personal injury or death, caused by
the negligence of another, cannot be reduced because
of compensation received by proceeds of an insurance
policy. This is because the wrongdoer owes full
compensation for the injuries inflicted by them and
any payment by a collateral source in no way relieves
the wrongdoer of their obligation. In this instance,
the airlines and airports and others at fault owe full
compensation for the injuries resulting from their
negligence. Any payment by a collateral source in no
way relieves the airlines or airports and others at
fault of their obligation. This collateral source
rule, which has been a fundamental part of tort victim
compensation for over a hundred years, needs to be
incorporated into the September 11 Victim Compensation
Fund.

Finally, the Interim Final Rule improperly lumps
together economic loss with non-economic loss prior to
collateral source offsets. While allowing for
collateral source offsets is against the collateral
source rule, it might be justifiable if the offsets
were taken only against economic loss awards. In
theory, since things like social security, workers
compensation, salary continuation benefits and life
insurance are designed to replace lost income, such an
offset would prevent a double recovery of economic
loss. Non-economic loss, on the other hand, includes
loss of consortium, loss of companionship and other
intangible emotional losses due to the sudden and
untimely death of a loved one. Social security,
workers compensation, salary continuation benefits and
life insurance are not designed to compensate for such
loss. Deducting economic-based collateral source
funds from emotionally-based non-economic loss damages
is improper and should be changed. Families should
not be left empty handed merely because they planned
for their economic future. At a minimum, each family
should receive the non-economic award without
collateral source deductions.

Individual Comment
Manassas, VA

2002-01-22