N002135
Sunday, January 20, 2002 5:38 PM
Public Law 107-42
Attachment 1:
January 18, 2002
Kenneth L. Zwick, Director
Office of Management Programs, Civil Division
U.S. Department of Justice
Main Building Room 3140
950 Pennsylvania Avenue
Washington, D.C. 20530
Dear Mr. Zwick:
Pursuant to the directive on the Department of Justice website, we are forwarding these comments on the interim final rule implementing Public Law 107-42. We currently represent one of the decedents who perished on American Airlines flight 11 on September 11, 2001.
Initially, we commend the expeditious passage of the law and the prompt promulgation of the regulations and rules. The process involves a detailed analysis of the applicable laws and statutes, and provides the foundation for expediting recovery on behalf of many of the victims and their families.
In reviewing the "interim final rule," we did note several subject areas that warranted comment and/or question in order to assist the practical implementation of the provisions of the Act:
· There appears to be some ambiguity in specifying when a hearing can be requested before the Special Master. In some sections, it appears that there is a presumptive right to a hearing, whereas others state that there may be a hearing, if requested. Please verify at what stages the hearing process shall take place.
· Based on the current rules, it appears that the filing of a claim constitutes a waiver of the right to bring a civil action. For the benefit of the Special Masters and the victims, it would be helpful to provide a preliminary screening hearing for the victim or a personal representative. This will enable them to properly evaluate the viability of their claim under the Act prior to waiving the opportunity for a third party action.
· The collateral source rule has come under serious scrutiny. Collateral sources now include life insurance, pension funds, death benefit programs and other government payments. Based on the financial circumstances of many victims and their families, this provision will substantially reduce and/or eliminate their eligibility for any recovery under the Act. We suggest that the collateral source rule be amended so as to provide that the first $1 million recovered from a collateral source by a victim or his/her family be immune from deduction from the overall award. Only those amounts which exceed $1 million in funds from collateral sources shall offset the award.
· The subject of federal and/or estate tax is not covered under the rule. The rules do state that, similar to personal injury recoveries, amounts recovered under the Act will not be subject to IRS income tax provisions. However, in order to determine the viability of filing a claim, applicants need to know whether the award they receive shall be subject to estate tax or shall be provided directly to the appropriate beneficiaries.
· Numerous tables were prepared with the proposed rules, including the amount of recovery for individuals who are married, with or without dependents, etc. These estimates were provided in 5-year intervals and larger intervals for annual income. There needs to be a clarification as to the treatment for those whose age falls between the 5-year intervals and income is between the included intervals.
Hopefully, these comments, questions and answers shall be useful, not only for us, but for your department in amending, where appropriate, the current rules prior to commencing the filing of claims.
If either of us can be of assistance to you in this regard, please feel free to contact us.
Very truly yours,
Individual Comment
Wellesley Hills, MA