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2002-01-18

Friday, January 18, 2002 7:58 PM
Comments to Interim Regulations for September 11 Fund.DOC



Please find herewith comments to the interim regulations concerning victim
compensation under the September 11 Fund. These are also being sent by fax
and by federal express. The federal express copy includes includes as
attachments the materials referenced in the text.




Attachment 1:

January 18, 2002


By Federal Express with Attachments
By Fax and E-mail without Attachments

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

Comments on the Interim Regulations for the September 11 2001 Federal Fund:
The Case for Recognition of "Common Law" Spouses

Dear Mr. Zwick:
In response to your request for comments from the public regarding the interim regulations for the federal compensation scheme, we write to propose that the regulations be modified to recognize as encompassed in the term "spouse," what many states recognize as a "common law" spouse.

A. Background to this Submission

By letter dated December 18, 2001,1 we submitted to the Special Master our suggestion that the regulations governing the September 11 Fund recognize and protect the interests of so-called common law spouses. By common law spouses, we mean domestic partners who have lived in a spousal relationship, but have not been ceremonially married. A number of states recognize common law marriage.2 Although they differ in their detail, broadly speaking, the laws of such states typically require that there be no impediment to marriage (such as another spouse) and that there be evidence of an agreement to live together as husband and wife. Such agreement is normally evidenced by actual cohabitation and a variety of other factors including, most importantly, the reputation of the couple amongst their friends and colleagues as being husband and wife.3 Unfortunately, New York is not one of those jurisdictions that recognize common law marriages.4 This places common law spouses of September 11 victims who were domiciled in New York in an extremely precarious position.

Our concern is epitomized by the situation of a particular victim of the World Trade Center attacks, . Ms. had lived with a victim of the attacks, , for over ten years. They had two children together, a boy aged six and another son who has just turned one, whom they were raising together as a family. They jointly owned their apartment and both their names were on the mortgage. In the only surviving documentation identifying beneficiaries of Mr. s benefits, a stock option grant, he identified Ms. as the beneficiary and described her as his wife. 5 Moreover, his friends and business colleagues viewed her as his wife. For all practical purposes she was his wife.

Unfortunately, as noted, New York law does not recognize relationships such as that between Mr. and Ms. to be marriages. Equally unfortunately, as did so many September 11 victims, Mr. died intestate. The combined result is that Ms. has no legal claim to any portion of Mr. s estate.6 Although, under New Yorks law of intestacy, Ms. s two infant children will be among the beneficiaries of their fathers estate,7 Ms. will have to administer their money as guardian of their property. In this fiduciary position, Ms. s management of such funds will be supervised by the Surrogates Court and she will only be able to use the funds for the support and education of the children as approved by the court.8 In a very real way, she will not be free to bring up her children in the best way she judges, but will be subject to judicial oversight. And when they attain their majority, she will be left with no financial resources other than whatever savings she can make on her own income, currently $20,000 a year. Prior to his death, Mr. had been the familys primary financial provider, earning approximately $70,000 a year, before bonuses and tax. In light of the drastic reduction in her familys income upon his death and her very real concerns for her own financial future without her husbands support, Ms. will be obliged to continue working notwithstanding the needs of her children as a result of their fathers tragic and untimely demise.

In making our December 18 submission, it was our hope that the regulations promulgated for the September 11 Victim Compensation Fund would permit common law spouses in the position of Ms. some recovery. Regrettably, we do not believe that they do so.

B. The Purpose of the September 11 Legislation9

The stated purpose of Title IV of the September 11 Legislation, which created the September 11 Victim Compensation Fund of 2001, is "to provide compensation to any individual (or relatives of a deceased individual) who was physically injured or killed as a result of the terrorist-related aircraft crashes of September 11, 2001."10

In releasing the Interim Regulations, Special Master Kenneth Feinberg eloquently described the Fund as "an unprecedented expression of compassion on the part of the American people to the victims and their families devastated by the horror and tragedy of September 11. ... In one important sense, the Fund symbolizes the commitment of the American people to those most in need."11 He stated that the goal of the regulations is, "in an expedited and efficient manner," to "provide fair, predictable and consistent compensation to the victims of September 11 and their families."12

C. The Provisions of the Statute

The statute sets up a procedure whereby a claimant who is an "eligible individual" may file a claim for compensation under the Fund. A claimant is an "eligible individual" if he or she was on board one of the crashed planes or was present at the site of the World Trade Center, the Pennsylvania crash site, or the Pentagon at the time of, or in the immediate aftermath of, the crashes, and suffered personal injury or death as a result. In the case of an eligible individual who is dead, the personal representative of the decedent shall be deemed eligible to make the claim on the deceased claimants behalf.13

The claim shall be for economic and non-economic losses that the claimant suffered as a result of the crashes.14 The statute provides that "economic loss" shall mean "any pecuniary loss resulting from harm ... to the extent recovery for such loss is allowed under applicable State law."15 In the case of someone killed at the World Trade Center, this will entail determining what forms of economic loss can be recovered on behalf of that deceased person under New York law.16 The statute does not look to state law to define non-economic loss, but rather sets forth its own very broad definition.17

Save for the general statement that the legislations purpose is "to provide compensation to any individual (or relatives of a deceased individual) who was physically injured or killed as a result of [September 11]," the statute is silent as to who may be deemed a beneficiary of an award made to a deceased person from the September 11 Fund and the manner in which such an award should be distributed.18 The statute does not define "relatives." The statute does not specify that state law shall govern either the determination of who may be the beneficiary of an award made to a deceased person under the Fund or the definition of "relatives." Such determinations accordingly fall within the general power of the Special Master to "promulgate all procedural and substantive rules for the administration of this title."19

D. The Interim Regulations

The Interim Regulations contain the following provision regarding the distribution of an award to a decedents beneficiaries.
Section 104.52. Distribution of award to decedents beneficiaries
The Personal Representative shall distribute the award in a manner consistent with the law of the decedents domicile or any applicable rulings made by a court of competent jurisdiction. The Personal Representative shall, before payment is authorized, provide to the Special Master a plan for distribution of any award received from the Fund. Notwithstanding any other provision of these regulations or any other provision of state law, in the event that the Special Master concludes that the Personal Representatives plan for distribution does not appropriately compensate the victims spouse, children or other relatives, the Special Master may direct the Personal Representative [that] all or part of the award be distributed to such spouse, children or other relatives.20

The Interim Regulations do not define "relative." They do, however, define a "spouse" (subject to certain qualifications) as meaning a "person reported as spouse on the victims federal tax return for the year 2000,"21 define "dependents" (subject to certain qualifications) to mean "those persons so identified by the victim on his or her federal tax return for the year 2000,"22 and define "beneficiary" to mean "a person entitled under the laws of the state of the decedents domicile to receive payments or benefits from the estate of or on behalf of the decedent on whose behalf the claim to the Fund was filed."23

As such, the Interim Regulations do not protect the interests of "common law" spouses, such as Ms. whose husband, , was domiciled in New York. If the distribution plan is to be made in accordance with New York law, Ms. will not be entitled to recover any amount from the award made from the Fund in respect of Mr. , since New York law does not recognize common law marriages. Moreover, in light of (i) the fact that the definition of "spouse" under the Interim Regulations would exclude Ms. 24 and (ii) the fact that the Interim Regulations fail to define the term "relative," it is wholly unclear whether Ms. would even have recourse to ask the Special Master to modify any plan of distribution that, following New York law, excludes her as a beneficiary.

E. Why the Regulations Should be Changed

As they stand, the above provisions of the Interim Regulations are fundamentally unfair and lead to arbitrary and inconsistent results.

First, the failure of the Interim Regulations to deal with common law spouses in the position of Ms. is fundamentally unfair. Ms. has suffered the same emotional loss as any ceremonially married spouse of a victim of the terrorist attacks - the loss of the man with whom she had lived for more than ten years and the father of her two children. She has to explain the loss of their father to her children and to deal with her own grief just like any other spouse. She also has to face the same financial insecurities due to the loss of her familys main source of income as any other spouse. In short, she has to face a future financially and emotionally on her own just like any other widowed spouse.

Second, the Interim Regulations discriminate against common law spouses of New York domiciled victims since the laws of a number of other states recognize common law marriages. The victims of September 11 were domiciled all over the United States; any common law spouses of victims domiciled in states recognizing this form of marriage would be entitled to recover from an award under the Fund. Similarly, Washington D.C., the site of the Pentagon crash, recognizes common law marriages.25 Thus, a common law spouse of a victim who was domiciled in Washington, D.C., would be entitled to receive compensation from the Funds award to the victim. This is a federal fund - what people whose loved ones have been killed receive under it should not depend on the vagaries of the laws of individual states, particularly where the application of such laws will result in two people in otherwise identical circumstances being treated wholly differently - the common law spouse of, for example, a Texas, Pennsylvania or D.C. domiciled victim being permitted compensation as a spouse, the common law spouse of a New York domiciled victim being denied any compensation at all.

Finally, even within the group of "common law spouses" of New York domiciled victims, there will be little consistency. Recognizing the inherent equity of claims brought by common law spouses, New York courts have, in the words of one commentator, "bent over backwards to find common law marriages when a couple has spent the briefest of periods together in jurisdictions that continue to recognize the doctrine."26 Thus, persons in similar positions to that of Ms. , but who have been fortunate enough to have spent as few as a couple of weekends in such a jurisdiction, would, under New York law, be treated as a spouse.27 Such arbitrary matters as where a couple has spent a vacation should not be determinative of whether the surviving partner of a familial relationship can receive compensation from a federal fund designed to provide for the victims of this nations worst terrorist attack.

In short, the Interim Regulations, as they pertain to the ability of a common law spouse to be a beneficiary of a deceased claimants award from the Fund, fail in their primary mission to provide "fair, predictable and consistent" compensation to the victims of the September 11 terrorist attacks.

F. Proposed Revisions

We propose accordingly five relatively simple amendments to the Interim Regulations:

First, we propose that the definition of "beneficiary" in regulation 104.3(a) be amended as follows (amended language is in italics):

(a) Beneficiary. The term beneficiary shall include:
(1) a dependent as defined in subsection (b) of this section, and
(2) a spouse as defined in subsection (c) of this section, and
(3) a relative as defined in subsection (d) of this section, and
(4) a person entitled under the laws of the decedents domicile to receive payments or benefits from the estate of or on behalf of the decedent on whose behalf the claim to the Fund was filed.

Second, we propose that the definition of "spouse" in regulation 104.3(c) be amended as follows:
(c) Spouse. The Special Master shall identify as the spouse of a victim:
(1) The person reported as spouse on the victims federal tax return for the year 2000 unless:
(i) The victim was married or divorced in accordance with applicable state law on or after January 1, 2001; or
(ii) The victim was not required by law to file a federal income tax return, 28
or

(2) In the event that no spouse is identified pursuant to subsection (c)(1) of this section, the person who is the spouse of a victim under the laws of the state of domicile of the victim, or

(3) In the event that no spouse is identified pursuant to subsections (c)(1) or (c)(2) of this section, the person who cohabited with the victim under such circumstances that the victim and the person held themselves out to be one anothers spouse. The existence of such a relationship may be evidenced by a nexus of factors, including but not limited to, whether the victim and such person lived together, the length of the relationship between such person and the victim, whether the victim ever described or referred to such person as his or her spouse, whether friends, neighbors and business colleagues viewed the victim and such person as spouses, in the event that the victim and such person had children whether they lived together with such children in a familial relationship, and such factors as common ownership of property, common householding and shared budgeting.29

Third, we propose that the definition of "dependents" in section 104.3(b) of the Interim Regulations be amended as follows:
(b) Dependents. The Special Master shall identify as dependents:
(1) Those persons so identified by the victim on his or her federal tax return for the year 2000 unless:
(i) The claimant demonstrates that a minor of the victim was born or adopted on or after January 1, 2000; or
(ii) Another person became a dependent in accordance with then applicable law on or after January 1, 2001; or
(iii) The victim was not required by law to file a federal income tax return for the year 2000;
and

(2) Persons who make a showing of unilateral dependence or interdependence upon the victim, which may be evidenced by a nexus of factors, including but not limited to, common ownership of property, common householding, shared budgeting, and the length of relationship between such person and the victim.

Fourth, we propose adding to section 104.3 of the Interim Regulations a definition of the word "relative" as follows:
(f) Relative. For the purposes of these regulations, the term relative of a victim shall be construed in its broadest possible sense and specifically shall include, but not be limited to, dependents as defined in these regulations.30

Fifth, and finally, we would propose amending regulation 104.52 as follows:

The Personal Representative shall distribute the award in a manner consistent with the law of the decedents domicile or any applicable rulings made by a court of competent jurisdiction, save that for the purposes of determining whether a person was the victims spouse, the definition of "spouse" set forth in these regulations shall be applied.31

Together we believe that these relatively simple amendments will afford fairness and consistency to the regulations and permit common law spouses to be recognized as spouses, relatives and beneficiaries of deceased victims of the September 11 attacks regardless of the vagaries of the laws of individual states and arbitrary circumstances such as where a couple spent their vacations.

G. Conclusion

If the Fund is to "symbolize the commitment of the American people to those most in need," it should not permit victims of the September 11 terrorist attacks to slip through the cracks. If its objective is to provide "fair, predictable and consistent compensation" to victims of September 11, it should treat like cases in a like fashion and should not permit arbitrary factors, such as where a victim is domiciled or where a victim and his partner spent a few days or weeks in the long history of their relationship, to determine the right of someone who built a life with the victim to be compensated for their tragic loss. We strongly urge that the Special Master consider and adopt our proposed amendments to permit common law spouses of deceased victims of September 11 to be compensated from those victims awards under the Fund.

Naturally should you have any questions or wish us to provide further assistance, we shall be more than happy to provide such answers and help as you may need.

Sincerely,
Individual Comment
New York, NY

___________________________________________

1. A copy of this letter is attached at tab 1 hereto.
2. These are Alabama, Colorado, Iowa, Kansas, Montana, New Hampshire (for inheritance purposes only), Oklahoma, Pennsylvania, Rhode Island, South Carolina, Texas, and Utah. Washington, D.C. also recognizes common law marriages. See tab 2 hereto.
3. See, e.g., Waller v. Waller, 567 So. 2d 869, 869 (Ala. Civ. App. 1990) (common law marriage exists where there is capacity to enter into marriage, present consent to be husband and wife, public recognition of the marriage and consummation; no specific words of assent required; present intention inferred from cohabitation and public recognition); Graham v. Graham, 274 P.2d 605, 606 (Colo. 1954) (existence of common law marriage may be proved and presumed from parties cohabitation and general repute as husband and wife; "cohabitation" means dwelling together in the same place; "general reputation or repute" means understanding among neighbors and acquaintances that couple are living together as husband and wife); Russell v. Russell, 865 S.W.2d 929, 931-33 (Tex. 1993) (common law marriage proven by evidence of agreement followed by cohabitation and public representation; facts of cohabitation and holding out may be viewed as circumstantial evidence of tacit agreement); In re Manfredi, 159 A.2d 697, 700 (Pa. 1960) (rebuttable presumption of common law marriage where there is constant cohabitation plus a broad and general reputation of marriage); Matthews v. Britton, 303 F.2d 408, 409 (D.C. Cir. 1961) (common law marriage established by agreement to be husband and wife consummated by cohabitation). Cases cited in this submission are included at tab 3 hereto, ordered alphabetically by case name.
4. N.Y. Dom. Rel. Law § 11 (McKinney 2001). See tab 4 hereto.
5. Although Mr. told Ms. that she was the beneficiary of his insurance policies and his retirement plan, his employer has advised her that all documentation concerning his beneficiary designations other than the stock option grant was destroyed with the World Trade Center.
6. Moreover, due to the destruction of the records of Mr. insurance and benefits beneficiary designations, whether Ms. will receive any proceeds from his insurance and retirement benefits is uncertain.
7. Mr. had one additional son, now aged 17, by an earlier relationship.
8. N.Y. Surr. Ct. Proc. Act § 1713 (McKinney 2001). See tab 5 hereto. See also In re C., 410 N.Y.S.2d 51 (N.Y. Surr. Ct. 1978) (withdrawal of infants funds from a guardianship account should be authorized only if it is necessary to provide for necessities or education that cannot otherwise be met by a person responsible for the infants support). See tab 3 hereto.
9. The Air Transportation Safety and System Stabilization Act (the "September 11 Legislation"), Pub. L. No. 107-42, 115 Stat. 230. See tab 6 hereto.
10. September 11 Legislation, § 404. See tab 6 hereto.
11. Sept. 11th Victim Compensation Fund of 2001, 66 Fed. Reg. 66,273, 66,274 (Dec. 21, 2001) (the "Interim Regulations"). See tab 7 hereto.
12. Id.
13. September 11 Legislation, § 405(c). See tab 6 hereto.
14. Id. at § 405(a)(2). See tab 6 hereto.
15. Id. at § 402(5). See tab 6 hereto.
16. See Interim Regulations at § 104.2, noting that § 402(5) of this provision is interpreted to mean that categories of economic loss not recognized under applicable state law cannot be compensated out of the Fund. See tab 7 hereto.
17. Sept. 11 Legislation. section 402(7) provides: "The term noneconomic losses means losses for physical and emotional pain, suffering, inconvenience, physical impairment, mental anguish, disfigurement, loss of enjoyment of life, loss of society and companionship, loss of consortium (other than loss of domestic service), hedonic damages, injury to reputation, and all other nonpecuniary losses of any kind or nature." See tab 6 hereto.
18. Id. at § 403. See tab 6 hereto.
19. Id. at § 404(a)(2). See tab 6 hereto.
20. Interim Regs. § 104.52. See tab 7 hereto.
21. Id. at § 104.3(c). See tab 7 hereto.
22. Id. at § 104.3(b). The definitions of "spouse" and "dependents" are significant in determining the amount of non-economic loss to be awarded a deceased victim. Section 104.44 of the Interim Regulations provides that an additional $50,000 shall be awarded for the spouse and each dependent of the deceased victim. See tab 7.
23. Interim Regs. at § 104.3(a). See tab 7 hereto.
24. Because the IRS looks to state law to determine whether or not to recognize a common law marriage for federal tax purposes, Mr. as a New York domiciliary was precluded from reporting Ms. as his spouse. See tab 8 hereto.
25. See supra at notes 2 and 3.
26. Cynthia Grant Bowman, A Feminist Proposal to Bring Back Common Law Marriage, 5 Or. L. Rev. 709, 716-17 (Fall, 1996) (citing cases). A copy of this article is attached at tab 9 hereto. It is beyond the purpose of this submission to consider whether common law marriages should be recognized by state law. Nonetheless, it is a pertinent observation that the abolition earlier this century of common law marriages in many states served unduly to prejudice women and, in particular, minority women, who were by far the most frequent persons seeking compensation as common law spouses. See discussion in Grant Bowman article.
27. For example, in a recent decision in a divorce case, New Yorks Appellate Division found that "as a result of the parties sojourns in Pennsylvania and family vacations, in Georgia, a valid common-law marriage existed under the laws of those states which was deserving of recognition under the principles of comity in New York." Katebi v. Hooshiari, 732 N.Y.S.2d 382 (App. Div. 2d Dept 2001). See also Carpenter v. Carpenter, 617 N.Y.S.2d 903 (App. Div. 2d Dept 1994) (plaintiff established that during "two brief sojourns in Pennsylvania - for a week in 1969 and for four days in 1989 - a common law marriage valid under the laws of Pennsylvania came into existence"). In Ram v. Ramharack, 571 N.Y.S.2d 190, 192 (N.Y. Sup. Ct. 1991), a New York court found that a couples two or three visits each year to relatives in the District of Columbia, sufficed to establish a common law marriage that New York courts would recognize. A three-day Thanksgiving holiday spent with relatives in Atlanta (a common law marriage jurisdiction) sufficed to establish marriage for a woman seeking workers compensation benefits in the case of Coney v. R.S.R. Corp., 563 N.Y.S.2d 211, 211-12 (App. Div. 2d Dept 1990). See tab 3 hereto.
28. We have preserved the Interim Regulations existing definition of "spouse" and added on two alternative definitions. It might be simpler and more consistent to abandon the existing definition and simply have the proposed amendments. In order to ensure that there not be competing spouses under each definition, we have made them sequential - that is you only go to subsection (c)(2) if subsection (c)(1) does not identify a spouse, and to subsection (c)(3) if neither subsection (c)(1) nor (c)(2) identifies a spouse.
29. Our definition in subsection (c)(3) which captures common law spouses combines elements from the laws of a number of jurisdictions, as well as language from Governor George Patakis Executive Order No. 113.30, dated October 10, 2001, concerning the suspension of provisions relating to crime victims awards for persons dependent upon victims of the World Trade Center attack. See following footnote.
30. Our third and fourth proposed amendments are perhaps not strictly necessary to address the situation of common law spouses. Rather, they attempt to address the situation where the victim was still ceremonially married (not divorced) but had lived in a familial relationship with another person for a long period of time. In this event, the ceremonially married spouse will likely be deemed the spouse under our proposed amendment to section 104.3(c)(2) of the Interim Regulations. Ensuring, however, that, as a dependent, such other person will be deemed a relative for the purposes of the regulations will explicitly preserve that persons right to make a claim to the Special Master to modify the proposed distribution under section 104.52 of the Interim Regulations. Moreover, defining such other person as a dependent will enable their pain and suffering to count towards the award to the decedent for non-economic losses. We have modeled our definition of dependent upon the language of Governor George Patakis Executive Order No. 113.30, dated October 10, 2001, concerning the suspension of provisions relating to crime victims awards for persons dependent upon victims of the World Trade Center attack. See tab 10 hereto. By this order, the Governor ensured that persons in non-traditional family relationships with victims of the World Trade Center attack could gain emergency assistance.
31. The purpose of this provision is to ensure that this federal fund will be uniformly administered and that notwithstanding any state law to the contrary, common law spouses, as uniformly defined for the purposes of the Funds regulations, will be recognized as entitled to receive distributions from an award to a deceased victim under the Fund.

2002-01-18