dojW000666.xml

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2001-11-26

Monday, November 26, 2001 5:23 PM
American Airlines' Comments to the Notice of Inquiry and
Advance Rulemaking

Attached please find the Response of American Airlines to Attorney General
Ashcroft's Notice of Inquiry and Advance Rulemaking with respect to the
promulgation of Regulations for the administration of claims under the
September 11th Victim Compensation Fund of 2001.

---------------------


Introduction

On November 5, 2001, Attorney General Ashcroft issued a Notice of Inquiry and Advance Rulemaking with respect to the promulgation of Regulations for the administration of claims under the September 11th Victim Compensation Fund of 2001 (the "VCF"). The following is the response of American Airlines (American) to General Ashcrofts request.
In its historic enactment of Title IV of the Air Transportation Safety and System Stabilization Act (Stabilization Act), Congress and the President clearly intended that the victims of the September 11, 2001 terrorist attacks (and their families) be afforded with full, fair and prompt compensation for their extraordinary personal losses. The Special Master Regulations for the Victim Compensation Fund must establish the framework by which these objectives can be realized. American recognizes that the task of meeting these goals and satisfying the publics high expectations presents a unique challenge to the United States and the Department of Justice. In an effort to assist the Department of Justice in this endeavor, American provides the following general observations:

The Regulations should establish a just and uniform process for the award of full, fair and consistent compensation to the victims of this tragedy. "Full and fair" compensation should provide the claimants with a compensatory remedy equivalent to the level of damages they would have received through the judicial process. American believes that Congress and the President intended this result and that the Regulations must take this objective into account when designing the Victim Compensation Fund system.

American is mindful of the tremendous demands that will be placed on the Department of Justice in administering the Fund within the deadline imposed by § 405(b)(3) of the Stabilization Act. Given these deadlines and the mandate of the Stabilization Act to provide claimants with an individualized remedy, the Department of Justice will need to commit substantial resources to establish and administer the Victim Compensation Fund system. This commitment of resources will not only involve the organization of a corps of qualified and experienced hearing officers, but also will require the establishment of an effective "gatekeeper" system to ensure that the original claim filings (and supporting documentation) are comprehensive and complete. American believes that if the Department of Justice devotes substantial resources to this gatekeeper function, the claims handling process will fairly and efficiently meet the challenge of the § 405(b)(3) deadline.

A sufficient commitment of resources by the Department of Justice and other government agencies also will be needed to ensure that claimants are aware of their rights and can avail themselves of experienced and reputable counsel to assist them in the compensation process, if so desired. This effort should include national and regional publicity about the Victim Compensation Fund and its Regulations, establishment of toll-free information lines, staffing of a "help center" and the creation of a dedicated website to ensure an adequate flow of information to the victims and their counsel.

Finally, American is mindful of the need for coordination between the Department of Justice and the Special Master appointed to administer the Victim Compensation Fund and the District Judge from the United States District Court of the Southern District of New York before whom all litigation arising out of the September 11th attacks will be consolidated. The purpose of this coordination is to ensure that the objectives of the Stabilization Act are satisfied and to reduce the number of duplicate filings between the Fund and Southern District litigation. At a minimum, the Special Master will need to put in place a system to share the names of the claimants (and the related decedents) who are seeking compensation under the VCF. This information should be put in an electronic database that is easily accessible and searchable by the federal court and the defendants in any federal court litigation.

The Department has raised a number of important issues with respect to the Special Master Regulations. Rather than responding to all of the issues, American restricts its response to the following specific issues identified in the Notice of Inquiry and Advance Rulemaking.

1. "The law generally provides that rules do not go into effect for at least 30 days after promulgation absent good cause to waive this requirement. 5 U.S.C. 553(d). The Department is seeking comment on an appropriate effective date for these rules, including whether good cause exists under 5 U.S.C. 553(d) to waive the 30-day requirement . . . The Department welcomes comments on this issue and on other alternatives."

Comment:

American suggests that the Department avoid taking any measures that would unnecessarily rush the process of establishing the VCF system and organizing the personnel who will administer and handle the VCF claims. In Americans view, a delay in getting the VCF program organized properly is clearly preferable to a flawed system that is operational at the earliest possible moment. The Special Masters responsibilities and time limits are extremely demanding. Given that the Special Master has not yet been selected, it would not be reasonable to expect the Special Master to implement a program in 30 days. The Department certainly has good cause to allow the Special Master the time that he or she will need put an infrastructure in place that will be capable of handling these demands.

Section 553 of the APA, by it express terms, does not apply to "(1) a military or foreign affairs function of the United States; or (2) a matter relating to agency management or personnel or to public property, loans, grants, benefits, or contracts." 5 U.S.C. § 553(a). The Victims Compensation Fund (VCF) sets up a system of benefits (or grants) and, therefore, is free from the strictures of § 553. "The exceptions for grants and benefits have been justified on the ground that the recipients have no "right" to the grants or benefit." Vigil v. Andrus, 667 F.2d 931, 935-936 (10th Cir. 1982). "If the government wishes to impose restrictions, the recipients can avoid the restrictions by not accepting the grant or benefit; and if the government wishes to terminate the grant or benefit, the recipient had no right to it and thus is not entitled to a voice in whether it is terminated." Vigil, 667 F.2d at 936.

Courts have held that although exemptions from APA procedural requirements should be interpreted narrowly, "section 553(a)(2) cuts a wide swath through the safeguards generally imposed on agency action." Humana of South Carolina, Inc. v. Califano, 590 F.2d 1070, 1082 (D.C. Cir. 1978). The only limit on the exemptions is that the challenged regulations must clearly and directly relate to the exemption. Califano, 590 F.2d at 1082; National Wildlife Fed. v. Snow, 561 F.2d 227, 232 (D.C. Cir. 1976); Good Samaritan Hospital, Corvallis v. Mathews, 609 F.2d 949, 953 (9th Cir. 1979). In this case, procedures for the distribution of benefits "clearly and directly relate" to benefits. Therefore, § 553 of the APA should not apply.

Even if § 553 did apply to the regulations called for by the Stabilization Act, the date on which the rules become effective is within the discretion of the Attorney General. Section 553 states that "the required publication or service of a substantive rule shall be made not less than 30 days before its effective date except . . . (3) as otherwise provided by the agency for good cause found and published with the rule." The phrase "as otherwise provided by the agency" indicates that the decision to make rules effective before the 30 day minimum is the agencys alone. Only the agency promulgating the rule can invoke the good cause exception. No other entity can force the Attorney General to make a rule effective before 30 days after publication.

The Stabilization Act only mandates that the Attorney General "promulgate regulations" within 90 days, the statute says nothing about the effective date of those regulations. Because the 30-day period mentioned in § 553(d) is the minimum time ("not less than 30 days") between promulgation and effectiveness, the Attorney General may make the effective date of Regulations later than 30 days after promulgation.

American recommends that the Attorney General make the Regulations effective no earlier than sixty days after promulgation. Sixty days should strike a balance between the desire of Congress for the speedy implementation of the Victims Compensation Fund and the need of the Attorney General to complete the time consuming and difficult tasks of developing forms, hiring officials, training officials, preparing a website, putting information technology into place, hiring support staff, etc.

2. "The Department believes that the number of individuals who already have filed a civil claim, or who have irrevocably committed to doing so in the next few months, may well be very small. The Department would welcome information on this point."

Comment:

At present, American is not aware of any personal injury or wrongful death litigation arising out of the events of September 11, 2001, with the exception of three actions commenced against Osama Bin Laden, al-Qaida, the Taliban, and the Government of Afghanistan.

3. "The Department also would welcome comment as to whether the statutory requirement that a claimant withdraw from such action by 90 days after the date the initial rules are promulgated was intended to preclude such a claimant from refiling or rejoining a civil action: a) should the claimant ultimately elect not to file a compensation claim under the federal program; or b) if the claimant is determined by the Special Master not to be eligible to file a claim."

Comment:

If a claimant is determined by the Special Master not to be an eligible claimant under § 405(c)(2)(A), (B) or (C) of the Stabilization Act, the submission of any claim that failed for that reason should not be treated as a waiver of the right to sue pursuant to § 405(c)(3)(B)(i). Once a proper claim has been deemed filed, the Stabilization Act makes it clear that waiver attaches. The events of September 11 will put a tremendous burden on both the Special Master and the courts. That burden would only be made worse if resources are diverted to claims that are later voluntarily dismissed simply because the claimant wants start over in a new forum.

4. "It would appear that [the Section 405(a)] requirements, combined with the statutory time frame for the Special Master to reach a decision once a claim is filed, contemplate a detailed form and filing, including submission by the claimant of supporting documents and relevant medical records. Accordingly, the Department invites comment on whether the Special Master should determine that a claim has not been filed in those circumstances in which the Special Master determines that there is insufficient information submitted to permit a reasonably informed determination to be made.

Comment:

American agrees that the Stabilization Act contemplates the filing of a detailed claim form and the simultaneous submission of supporting documentation. (Under § 405(a)(1), a claim "shall state the factual basis for eligibility for compensation and the amount of compensation sought.") Accordingly, a comprehensive "gatekeeper" function should require that sufficiency of claims determinations are made before the claim reaches the Special Master. The Regulations should establish a formal acceptance procedure for purposes of triggering the 120-day decision period. American suggests that a claim which lacks sufficient information be considered "not filed" and that the claimant receive written notification of the claim status. The written notice must identify specifically any missing or incomplete information and provide guidance to the claimant on how to correct the deficiencies.

5. "The Department welcomes comment on the design and content of the claim forms in light of the statutory requirements. Specific comments on making the form and its instructions readable and readily available are welcome."

Comment:

The Department is empowered to specify the particular information that must be provided in the claim form and the supporting documents that must be furnished with the form. The initial claim submission, particularly the claim form itself, should be sufficiently detailed so as to satisfy the gatekeeper function and to subsequently allow the hearing officer to make an informed and fair award. The claim form should be flexible enough to permit the submission of additional information and documents as the claimant believes appropriate. In addition, the Regulations should require the simultaneous submission of documents that support the claim presented as fully as possible.

The claim form may need to be available in several languages. The Department could establish "help centers" where prospective claimants can go for assistance (including access to computers, properly trained staff, and an electronic version of the claim form).
As noted above, we believe that all claimants should consider obtaining the advice of experienced, competent counsel. The claim form should conspicuously advise claimants of their right to retain counsel and inform them of available pro bono legal assistance.

The claim form should be signed under oath by the claimant, and if the party is represented by an attorney, the attorney should separately sign subject to the obligations of good faith that attach to filing a complaint in federal court.

If a claimant is acting as the personal representative of a decedent, the claimant should have a will or an order from a court of competent jurisdiction appointing the claimant as the personal representative.

6. "Section 405(b)(3) of the [Stabilization Act] provides that the Special Master must make final decisions on claims within 120 days of the date of filing. Comments as to whether the [Stabilization Act] permits the Special Master to temporarily halt or toll the running of this clock, at the initiative of the claimant or otherwise, are welcomed."

Comment:

American suggests that a claimant have the option to toll the running of the 120 day decision deadline but only after a claim has been deemed filed. In addition, the hearing officer should be vested with the authority to toll the time limit for good cause when additional information is required. We believe that a comprehensive gatekeeper structure at the initial submission stage should reduce the need for tolling.

7. "In addition, the Department invites comment on whether the Special Master should be permitted to dismiss a claim as not properly filed for lack of adequate supporting information and, if so, whether an individual should thereafter be permitted to refile the claim."

Comment:

American suggests that a formal acceptance procedure involving a thorough review of the initial claim submission should reduce the number of inadequate filings. If a submission is deemed to lack sufficient information, the gatekeeper should provide a written notice of the claims status which details exactly why the claim has been deemed insufficient and explains the steps necessary to remedy the deficiency. The claim should not be deemed "filed" until any deficiency has been cured and eligibility has been established.

8. "[T]he Department welcomes any and all suggestions as to how it can assist claimants, including suggestions for office locations, toll-free phone lines, outreach meetings, and newsletters."

Comment:

In order to create an accessible system that provides full and fair compensation, the Department of Justice should commit sufficient resources to informing victims and their families of their rights under the VCF. American suggests that the Department extensively publicize the existence of the VCF, establish toll-free telephone service centers staffed 24 hours per day, seven days per week by informed individuals who can direct potential claimants to all sources of assistance.

Further, American recommends the adoption of § 411 of the proposed regulations forwarded to Attorney General Ashcroft on October 25, 2001 by Senators Tom Daschle and Patrick J. Leahy and Representatives Richard A. Gephardt and John Conyers, Jr. ("Daschle Proposed Regulations"), which provides:

The Special Master shall immediately develop and implement a comprehensive program to inform the public about the VCF and their rights thereto.

In developing and implementing this program, the Special Master shall produce printed informational material for use by potential claimants. This material will explain to the public their rights to compensation under the program and advise as to the procedures necessary to file a claim. The informational material shall also inform potential claimants of any available pro bono programs.

The Special Master shall send written notice immediately to all persons and/or the families of persons identified as injured, missing or dead by the Attorney General as a result of the September 11, 2001 airline crashes. This notice shall inform persons as to their rights to compensation under the VCF and the procedures necessary to file a claim. The Special Master shall send to each of these persons copies of all informational materials on the program immediately upon availability.

The Special Master shall move immediately to establish a "1-800" telephone number and website to receive requests from potential claimants for informational material and claim forms.

The Special Master shall purchase sufficient advertising in both print and media in the New York, New Jersey, Boston, Los Angeles, Chicago, Dallas and Washington, D.C. media markets to inform the public about the availability of compensation and the process for filing a claim.

9. "The Department seeks comment on whether a Departmental regulation or a statement of policy by the Special Master would be appropriate to clarify questions concerning personal representatives, for example:"

a. "Whether the Special Master should require that all those who consider themselves to be survivors of someone lost in the crashes be notified of a claim by a personal representative."

Comment:

A personal representative should notify all presumptive and named beneficiaries of a deceased victims estate that a claim has been filed, and should be required to inform all such persons that filing a claim with the VCF waives such survivors right to bring a civil action. The Regulations should require the personal representative to certify that he or she has made these disclosures to all beneficiaries when the claim is filed.

b. "Whether the Special Master should require that the personal representative identify all those who consider themselves to be survivors of someone lost in the crashes and obtain from each a signed statement waiving the right to litigation prior to the acceptance of a claim."

Comment:


The personal representative should identify and, if possible, obtain such a waiver from all persons who consider themselves to be survivors of a victim lost in the attacks, as well as a waiver of any claimed right to serve as the personal representative. In the event that some survivors refuse to sign a waiver, the hearing officer should proceed to hear the presented claim and refer the dispute concerning the personal representative to a court of appropriate jurisdiction.

c. "Whether the Special Master can, within the brief statutory period identified by the statute, determine who among different claimants is the appropriate personal representative."
Comment:

As suggested in the Daschle Proposed Regulation § 402(7), a decedents "personal representative" should be "a person duly qualified or appointed under an applicable state law" (i.e. the person appointed by the states appropriate surrogate or probate court to administer the decedents estate). The question of who is the correct personal representative should be resolved before the filing of any claim. Therefore, the Special Master and the hearing officer should have no role in resolving a dispute over who is the appropriate personal representative for a particular decedent.

d. "Whether the Special Master should, in any matter involving a dispute as to the identity of the personal representative, require prior adjudication and judgment by a state court of competent jurisdiction."

Comment:

American believes that the Special Master and hearing officers should focus on determining just compensation for the claimants in the limited time allowed, and, therefore, any dispute as to the appropriateness of the personal representative should be remanded to a court of proper jurisdiction. Moreover, if the term "personal representative" is interpreted to mean a person appointed in accordance with applicable state law, conflict about who is the proper personal representative should be limited.

e. "Whether the Special Master should make determinations of compensation for claimants and escrow payment until disputes regarding the identity of the personal representative can be resolved by a court of competent jurisdiction."

Comment:

Because the personal representative brings the claim for the benefit of the survivors under the Stabilization Act § 405(c)(2)(C), the survivors should be able to receive the compensation awarded by a hearing officer while a dispute concerning the personal representative is determined. The hearing officer should be permitted to fashion a just compensation award and consider suggestions from the claimants as to a proper distribution of the award. Additionally, the hearing officer should be given sufficient discretion to escrow some or all of a potential award pending resolution of such a dispute.

Comment By:
American Airlines
Fort Worth, Texas

2001-11-26