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2002-01-16

January 16, 2002



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

Re: Response to DOJ Request to Comment

Dear Mr. Zwick:

Trial Lawyers Care takes this opportunity to comment on certain aspects of the "Interim Final
Rule" for the September I 1 Victim Compensation Fund. As you know, we previously submitted
comments and recommendations for regulations. Please accept this letter as a supplement to
those submissions for the purpose of conunenting on the following specific points:

I . Section 104.44, Non-Economic Compensation. This section states that in death
cases the presumed non-economic award shall be $250,000 for decedents and $50,000 for a
spouse and each dependent. Section 104.46 additionally authorizes the Special Master to rely on
these amounts in determining the non-economic losses for claimants who suffered physical
harm. These amounts are arbitrary, unreasonably unfair and contrary to the Act

The Act establishing the September I I Victim Compensation Fund expressly authorized
non-economic compensation for a wide range of harms. As defined by the Act,

"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 natare.

The severely limited presumed non-economic compensation does not begin to adequately
address any of those elements much less all such losses "of any kind or nature".

80 Centre Street, New York, NY 10013-4306

Trial Lawyers Care, Inc. is the non-profit corporation set up by volunteer trial lawyers across the nation to provide free legal services
to the September 1 ith terrorist attack victims,who choose to make claims under the federal September 1 @ Victim Compensation Fund.





As explained in the Statement of the Special Master which accompanied the Interim Final
Rule, the presumed award of $250,000 for decedents is based upon existing federal programs
providing death benefits for survivors of public safety officers or military personnel killed in the
line of duty. Those programs, one of which includes a cost of living increase since 1988, were
not, however, intended as compensation for a decedent's pre-death suffering. If those programs
provide a guide for anything - a highly questionable premise in view of the non-economic losses
specifically authorized by the Act - it would be for a surviving spouse or dependent's losses, not
the pre-death suffering of the decedent.

No rationale was provided for the presumed award of only $50,000 to a spouse or
dependent. By any known standard, such sums are woefully inadequate.

These presumed awards seem more a product of arbitrariness and refusal to address
individual circumstances than an effort to fulfill the spirit and intent of the Act. Family members
and other loved ones instantly learned of the attacks and had to watch in horror as their loved
ones died, only to see those deaths endlessly repeated in the following days. A few were able to
share last words. Most can only imagine the horror of their loved one's death. Many deaths
were concentrated and connected in ways that destroyed or rendered normal support groups
dysfimctional, which has compounded the families' losses. Those that escaped death on
September 1 1 have been engulfed in survivor's guilt, and emotional damage, including PTSD,
will be common. Spouses and children have and will continue to suffer and relive September 1 1
for the rest of their lives. These losses are very real and will vary among victims.

Spouses have also lost the companionship, comfort and protection of their husbands and
wives. Children have lost the comfort and parental guidance of their parent(s). It will be years
before the full magnitude of these losses will be finally known. But, whatever the extent, these
losses can be established on a case-by-case basis. And, under no circumstances, will these
presumed awards be fair or fulfill the mandate of the Act.

There is also no rationale for using these amounts in personal injury claims. Part of the
reason for a uniform value for all decedents was that the circumstances of death in most cases
was '@owable". Quite the contrary is trlic in all injury claims. The circumstances of the
injury and its effect on the claimant and family members is or can be known and established on a
case-by-case basis. Furthermore, federal death benefits for surviving family members, on which
the $250,000 value is based, have no relevance to the non-economic losses arising by reason of a
personal injury.

It was not the intent of Congress to both effectively eliminate rights to litigation and at
the same time provide essentially no noneconomic compensation. That is, however, the
effective result of a presumptive award of only $50,000 to spouses and children and the
presumption award for decedents is also unreasonably low. Trial Lawyers Care objects to these





"presumed" awards and request that they be stricken from the regulations. Instead, non-
economic damages should be established based on the facts and circumstances of each claim.

2. Section 104.43 (a) and 104.45(a), Loss of Earnings Compensation and the
Presumed Loss Tables. These sections authorize the development of a methodology for the
determination of loss of earnings and other employment benefits. Based on that authority
Presumed Loss Tables have been published for various ages, family composition and earnings
categories. While the accompanying text provides some description of the methodology, much
remains undisclosed and it is not possible to discem, much less critique, the various assumptions,
values and calculations underlying the tables.

According to the Special Master's explanation which accompanied the tables, the tables
are based on nationwide averages. Nationwide averages are not relevant to the vast majority of
victims who worked in the New York marketplace. Overall averages also ignore education and
occupation, forcing all victims into a "one size fits all" matrix. It is widely known, for example,
that in New York at least I 000 victims worked in the field of Securities and Financial Services,
and approximately 375 of the victims were firefighters, police, port authority and other
government employees. This is approximately 45 percent of the New York victims and for both
there is New York-specific, occupation-specific data available. It is unfair and improper to
ignore such data.

In addition, the use of nationwide averages is inconsistent with the deduction of a
decedent domicile's local taxes. Furthermore, it also appears that the data may be out-of-date or
gender biased which would be improper and unfair. Finally, it is unclear what are the bases or
rationale for "wage growth" and "consumption factors".

There is also a great deal of confusion as to whether the tables express "caps" on
economic losses. If they do, that is directly contrary to the Act. While there is no such explicit
statement, the Statement of the Special Master which accompanied the Interim Final Rule notes
that awards in excess of $3 million "will rarely be appropriate" and the tables contain a footnote
to the effect that awards will only be computed on compensation levels up to $23 1,000.
Arbitrarily "capping" wage loss compensation is directly contrary to the Act which neither
contains nor authorizes any such "caps". It is also inconsistent with Section 104.33(b) which
states that claimants can present a wide range of evidence. On the other hand, Section 104.33(c)
seems to require that it must generally be done in two hours.

These rules not only create confusion but at least the appearance of arbitrariness and
unfairness. The final rules should make it clear that there is no fixed ceiling on awards, that
awards will be based on the best evidence available and that each claimant shall have an
adequate amount of time to present their claims. I





3. Section 104.41 and 104.47. These sections require that the amount of
compensation shall be reduced by all collateral source compensation. As presently set forth in
the regulations, collateral sources are to be deducted from the entire award - from both economic
and non-economic losses. This can result in unfair and inequitable results such that the meager
non-economic awards contemplated by the regulations could be completely eliminated by
collateral source deductions. Trial Lawyers Care submits that this is contrary to the spirit and
intent of the Victim Compensation Act and that the regulations should provide, instead, that
collateral sources only be deducted from economic losses.

4. Section 104.3(b) and (c). These subsections define a spouse and dependents,
subject to a few minor exceptions, as being the persons so identified on the victim's 2000 federal
tax returns. These rules are inflexible and will create inequities whereby spouses and children
will be excluded because of the narrowness and rigidity of these definitions. For example, some
spouses file separate returns - indeed the tax code forces that result in certain cases - so that
neither is listed as a dependent on the other's return. Frequently in divorces, as part of a
settlement agreement, the divorcing parents agree that the dependency deduction for children
will be taken by one of the parents (usually the lower wage eamer or the unemployed parent). In
addition, many individuals undertake to support others, such as parents, siblings and step-
children, who are not listed by them as dependents on their tax returns. In all those cases, real
spouses, real children and real dependents would be arbitrarily excluded by the regulation
definitions.

It should make no difference in claims under the Fund how a decedent elected to use or
allocate his or her earnings. Once the economic losses have been determined, the victim's pre-
death actual allocations and expenditures should be respected.

Trial Lawyers Care therefore recommends that there be a flexible definition tied to actual
facts. Specifically, Trial Lawyers Care proposes the following definitions.

Spouse. The term, "spouse," shall mean the person who is deemed
by the laws of the state in which the claimant resides to be legally
married to the claimant at the time of his or her death; or is deemed
to be the claimant's spouse under the laws of the state in which the
claimant resided that would apply in determining the devolution of
the claimant's intestate personal property or would have the right
of a spouse to share in the claimant's intestate personal property
under such laws.

Child: The term, "child," shall mean any natural, adopted child or
step-child of the claimant or decedent on whose behalf a claim is
brought under the Act.





Dependent. The term, "dependent." shall mean any person to
whom the claimant or decedent contributed support or services.

5. Section 104.2(c)(1). This subsection defines physical harm as requiring treatment
within 24 hours of injury. This is a very inflexible rule that will unfairly exclude injured victims,
especially in New York where everything was very chaotic for the first 24 hours and especially
in the case of rescuers, many of whom continued to work notwithstanding their injuries.
Consider, for example, a person with a broken ankle who thought the ankle was only sprained
and treated it at home with ice for over 24 hours, only to find out several days later that x-rays
showed it was fractured. Or consider the person who received a latent injury or internal injuries
on September I I which did not manifest until days or weeks later. Those cases would all be
excluded from compensation.

Trial Lawyers Care recommends that there be a flexible definition and that injury and
treatment not be tied together in a fashion that will exclude legitimate injuries. Specifically,
Trial Lawyers Care proposes that the requirement for treatment be linked to the diagnosis of the
injury and that the period be expanded to at least 96 hours after diagnosis. That definition,
coupled to the requirements of CFR104.2(c)(1)(i) and (c)(1)(ii) is sufficient to serve the purpose
of eliminating phantom injuries while preserving the right to compensation for legitimate harm.

6. Section 104.43(c) and 104.45(c). These are identical sections, one for death
claims and the other for injury claims. Both are entitled "Replacement service loss" but neither
deals with the very real losses that occur when a decedent or injured person can no longer
perform services and those services have to be replaced. Rather than cover such losses, the
content of both sections deal with the method by which economic loss can be calculated for part-
time or unemployed workers.

The losses resulting from having to replace services that were performed by a decedent or
injured person are very real and can be substantial. Like medical expenses, they have to be
determined on a case-by-case basis. And, their calculation is a standard economic analysis that
is done in every case involving decedents or injured persons. Trial Lawyers Care therefore
recommends that in each of these sections, the following subsection be added.

( ) Loss due to Replacement of Services. This loss equals the
value of the services performed or provided by the victim and
which can no longer be performed or provided due to physical
harm suffered by or the death of the victim.

In addition, Sections 104.43(c) and 104.45(c) should be retitled as "Economic Loss of
Part-time or Unemployed Workers".





7. Structured Awards. There is presently no regulation authorizing structured
awards. Trial Lawyers Care recommends that such an option be offered to claimants and
understands that the Special Master is taking steps to do so. However, Trial Lawyers Care
believes that a regulation is necessary to protect the tax-free status of such awards and therefore
recommends the adoption of the following provision:

Periodic Payments. At the election of any Claimant or beneficiary,
amounts payable to said Claimant or beneficiary pursuant to a
decision under the Act may be received as a periodic payment
described in 26 U.S.C. 104(a)(2), funded by an annuity the cost of
which shall be such amount. Any such election shall be made by
providing notice thereof to the Hearing Officer within 7 days after
the decision. If an amount is payable in periodic payments ftmded
by an annuity, then the Special Master may transfer, in a qualified
assignment, the obligation to make such periodic payments, See 26
U.S.C., 130. The claimant or beneficiary shall provide to the
Special Master or the Hearing Officer, within 60 days following
issuance of the written notice under section 405(b)(3), the name of
the assignee to whom a qualified assignment is to be made and the
documents required to make the qualified assignment in a form
acceptable to the Special Master.

8. Undocumented Workers. There is presently no regulation protecting
undocumented workers who make claims from retribution. Undocumented workers were victims
of these attacks and their families should be able to make claims free from fear of the
consequences. For that purpose, Trial Lawyers Care recommends that at least the following
provision be added to the regulations:

Immigration Status Information - Any information concerning the
immigration status of a Claimant or a dependent of a Claimant
shall not be disclosed to the Immigration and Naturalization
Service.

Many victims are very confused and concerned about the fairness of the Compensation Fund.
On the one hand, they understand that to benefit from the Fund, they have to give up all rights to
sue defendants who may share some responsibility for the loss of life and injuries which
occurred on September I 1. On the other hand, there is no adequate assurance that they will be
treated fairly under the existing regulations. Indeed, many presently believe that they could
receive virtually nothing from the Fund. Over the past three months, as more information has
come available, the total number of victims has been able to be drastically reduced. If the
numbers of victims played any role in the drafting of the "Interim Final rule", such consideration




should not be allowed to influence the final regulations. The goal should be solely to provide
compensation in keeping with the spirit and intent of the Act and the individual circumstances of
the victims. We therefore asked on behalf of these innocent families that the regulations be
amended to clearly reflect the intent of Congress and provide the victims with confidence that
they will be treated fairly.

As was the case before, we stand ready to meet with you, the Special Master or the Department
to assist in any way in finalizing the regulations.

Very truly yours,




Comment by:
Trial Lawyers Care

New York, NY

2002-01-16