dojA004531.xml

dojA004531.xml

born-digital

email

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2001-12-21

December 21,2001

Special Master Kenneth R. Feinberg
C/O Kenneth L. Zwick, Director
Office of Management Programs
Civil Division, U.S. Department of Justice
Main Building, Room 3140
950 Pennsylvania Avenue NW
Washington, DC 20530

Dear Mr. Feinberg:

As a forensic economist who has often testified on the economic eonsequences of wrongful death, I
applaud your efforts to find a distribution formula that is both fast and fair. Unfortunately these two
noble objectives are on a collision course.

Your distribution formula is badly flawed because your assumed rates of compensation growth are
much too high. The effect of this mistake is twofold. First, of the funds available for distribution, too
much is allocated to economic loss and too little to non-economic loss. Second, although the faulty
formula proportionately "overcompensates" everyone for economic loss, more of the actual dollar
amount is allocated to the highly compensated, at the expense of the less highly compensated. Both of these consequences tend to favor the rich expense of the poor. This is true despite your
passionately and eloquently stated reluctance to play the role of Kind Solomon by deciding that some
lives are worth more than others.

The appended spreadsheet documents my argument using one hypothetical worker, age 25, who earns
$18,000 a year, and a counterpart earning ten times that amount. The excessive compensation growth
assumptions in this admittedly extreme case result om a misallocation to the more highly paid individual
of $1,538,723.

At the very least, I urge you to revise your growth assumptions so that they are in better accord with
economic reality, and with customery courtroom practice. In today's environment, a generalized growth
rate of 3.5% is probably appropriate, rather than the rates of up to 6.6% in your current formula.

It would be better still, I think, to de-emphasize compensation for economic loss, and to
correspondingly increase your allocation for "pain and suffering," hewing to your established principle
of compensating everyone, rich or poor alike, by an equal but now presumably much higher amount.

I note that you are performing this service to your country without compensation, and if I can be helpful
to you, I will gladly contribute my services as well.


Sincerely,

Individual Comment
Rapid City, SD

2001-12-21