dojN002180.xml

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2002-01-21

Monday, January 21, 2002 2:30 PM
September 11th Victim Compensation Fund of 2001





January 20, 2002

President George W. Bush, Vice President Richard Cheney, Mr. John Ashcroft,
Senator Edward Kennedy,
and Mr. Kenneth Feinberg,

Special Master of the September 11th Victim Compensation Fund of 2001

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


Re: Comments on the Interim Rule of the September 11th Victim
Compensation Fund of 2001

Dear Esteemed Gentlemen:

I am writing to ask for your help to correct two inequities in the
Department of Justice's Interim Final Rule for the September 11th Victim
Compensation Fund of 2001 that will result in many families receiving no
compensation from the fund. This is because (1) the projected economic and
non-economic loss figures are unrealistically low; and (2) the Fund reduces
any award by the amount of money a victim family receives from a "collateral
source."

When Congress passed the Air Transportation Safety and System Stabilization
Act on September 22, 2001, it severely restricted September 11 victims'
right to sue the airlines, which bear ultimate responsibility for the
tragedy because of lax security procedures. In exchange for denying victims
the right to sue, Congress provided the September 11th Victim Compensation
Fund of 2001. The Fund is supposed to compensate the victims' families for
the types of losses that would have been recoverable in a lawsuit, but
without the burden and delay of litigation.

The Interim Rule/Regulation also describes the intention of the law:

"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 our loved one's 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 Congress's 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 harm's way and their loss is not the result of corporate
negligence. On the other hand, the September 11 victims are victims of
negligent airline security. 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. A
more reasonable projection of non-economic loss is probably somewhere
between the current proposal and the historical litigation result.

The Interim Final Rule reduces any compensation awards by the amount of any
funds received from collateral sources, including life insurance. The
Interim Final Rule 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, 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 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 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.

The Interim Final Rule needs to be adjusted to provide fair, balanced and
acceptable economic and non-economic loss projections. The economic loss
charts need to be increased and expanded depending upon the deceased's job
field. The non-economic loss amounts also need to be increased into a range
that accounts for the tragic way in which these innocent victims died and
the shattered lives they left behind. Collateral source recoveries need to
be excluded from consideration by the Fund. Without these changes, the
intent of Congress will not be fulfilled because there will be no reason for
many of the September 11 victim families to participate in the Fund. Without
these changes, it will be better for many victim families to take a chance
at litigation rather than sign on to a Fund through which they will receive
nothing but a waiver of their right to sue.
Please rectify these inequities. Give the victim families a reason to
participate in this Fund rather than litigate. Change the Interim Final
Rule to provide economic and non-economic amounts at fair, balanced and
acceptable levels; do not offset Fund awards by collateral source
recoveries; establish a fair appeal process. Finally, please include the
specific calculation formulas, statistics and assumptions within the rule or
the explanatory materials.


Sincerely,
Individual Comment
Berkeley, CA

2002-01-21