W000738

November 26,2001

SENT VIA ELECTRONIC TRANSMISSION & FAX

Mr.Kenneth L. Zwick, Director
Office of Management Programs
Civil Division
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001

Re: September 11th Victim Compensation Fund of 2001- Notice of Inquiry and Advance Notice of Rulemaking for Comment

Dear Mr. Zwick:

Poorman-Douglas Corporation ("PD") appreciates the opportunity to respond to the Request for Comment on proposed regulations and processess for implementing the Victim Compensation Fund, which was published in the November 5, 2001 Federal Register by the Department of Justice.

Established in 1968 as a full-service data processing company, Poorman-Douglas is now expert in claims administration for large, complex class actions and bankruptcy cases. Poorman-Douglas has extensive experience in complex case administration and has a history of successful partnerships with special masters and monitors. We also are skilled in effectively yet sympathetically working on sensitive, humanitarian cases. While we are located in Portland, Oregon, our business is national, with strong ties in New York and Washington, D.C. We are ready to assist in this humanitarian effort for the victims of September 11th disaster in any way within our broad scope of capabilities.

In reviewing the Notice of Inquiry and the specific issues raised, PD, as an open market vendor of claims administration and mass litigation support services, will generally address the identified issues that fall into PD's areas of expertise. In addition to drawing from our experience and knowledge base, we have performed research on techniques to improve communications with claimants and have cited relevant sources with our comments.

First and foremost, any and all contemplated requirements and procedures should be developed and implemented with the claimants' best interests in mind and with consistent compliance with the intent of the Victim Compensation Fund. The claimants making claims against this Fund are involuntary claimants who have already suffered severe emotional, if not physical, circumstances and have been confused by uncoordinated relief efforts. To provide some measure of relief to these distressed claimants, claim procedures should be designed to maximize assistance and minimize the burden on these claimants. Our comments are directed toward this goal.

> Timing of Services

Several short deadlines impact the amount of time available to develop and implement claims procedures, including:



With these deadlines in mind, two key actions will impact the Fund's ability to provide effective, quality service to victims; efficiently resolve claims in a timely fashion; and control costs:

1. Designation of an experienced administrative service/support organization as soon as possible; and

2. Development of clear, straightforward Fund requirements and production guidelines with participation by all parties, including the administrative services/support organization as soon as possible after one is selected.

> Claim Form Design (with specific comments on making the form and its instructions readable and readily available)

Based on its wide experience in claims administration, PD recommends that the claim form package include a notice that is clear and descriptive. Special information should be highlighted, using a bolded font or a different color ink. Important information such as claims filing deadlines, toll-free numbers, administrator mailing addresses and Internet information should be well positioned within the instructions.

Any special calls to action (e.g. actions required of a claimant) should be boxed or highlighted. PD has reviewed human behavior studies to guide the form and content of the claim forms it designs. The flagship study done by behavioral researchers McClelland and Atkinson indicated that without knowledge of the perceived outcome, people are much less likely to act. A claim form should be designed so that the face of the form is easy to understand, telling claimants what they need to do, how they should do it, and in what timeframe.

Effective form design is also predicated on how key information is positioned on the claim form. Primacy-recency literature has established that the most effective positioning of messages or content of critical importance is at the beginning or end. The material placed in the middle is less likely to be remembered. "One research finding can be stated unequivocally: material presented in the middle of a message is relatively poorly remembered and has the least impact."[1]

> Claim Form Design for readablity

Plain language is the guiding principle in form design for readability. Plain language claim forms provide many benefits, including greater target audience participation; less overall confusion, which will reduce the potential expense of toll-free telephone support and a higher likelihood that the information submitted would be complete.

Plain language design is a concept embraced by the Federal Judicial Center.[2] In its discussion of proposed amendments to Federal Rule of Civil Procedure 23 (requiring plain language in class action notices) the Federal Judicial Center supports the amendments that would require that "the notice concisely and clearly describe in plain, easily understood language the nature of the action, the claims, and the potential consequences of a litigation." Focus group studies conducted by the Federal Judicial Center found that comprehension of legal notices is significantly improved through deliberate changes in language, organization, structure, formatting and presentation of the notice text. The use of a cover letter, captions, headings, font changes, and color increases reader comprehension and motivation.

Additionally the RAND Institute for Civil Justice conducted an extensive review of damage class actions in the United States Court systems. RAND review the texts of several high-profile class action notices and found that the readability and content varied dramatically. On one end of the spectrum, was a notice that Poortman-Douglas and Huntington Legal Advertising designed: In re: Louisiana-Pacific Inner-Seal Litigation (a copy of which is attached hereto as Attachment 1). The RAND researchers suggest that the plain language text from the Louisiana-Pacific notice was more likely than other notices to attract the attention of class members.

> Design for Accessibility

The claim package should be readily available via any means reasonable and possible, which should include the Internet, first class mail, and established centers for victims. Although a direct mail program will get the materials in the hands of a number of potential claimants, requests for information will also come from the toll- free support, fax and mail.

Documents provided via the Internet should be in a format that is readily viewable, free of charge. We recommend .PDF format (Adobe), which is currently the industry standard.

> Claim Form/Instruction Content

In order to facilitate the ease and orderly filing of claims for all parties concerned, at a minimum, the claim package should contain the following items:

1. Registration form (w/instructions for filling out and filing);
2. Compensation form (w/instructions for filling out and filing);
3. A claimant information package with details and guidelines for filing, as well as any grids or charts deemed appropriate
4. A "Question and Answer" document or "FAQ" which covers the key issues and procedures in the above-referenced documents, formatted in such a way that a claimant can easily spot information on a particular subject matter that may have been overlooked when the claimant was reviewing the other information.

Guidance for the content of an effective claim form and information packet can be found in the Manual for Complex Litigation.[3] In particular, a good notice of settlement (to which the Fund forms would be equivalent) should include:

> Claim Acceptance/"Filing"

As mentioned above, consistent with other complex, mass personal injury settlements, the Victim Compensation Fund claim process would benefit from the use of two forms to be filed by each claimant: an initial registration form and a compensation form.

At the time of registration, the only documentation that should be required is basic proof of 1) eligibility; and 2) (if the victim is deceased) legal status of contacting party (e.g. legal guardian, personal representative). When proper proof of eligibility and legal status (if necessary) has been received, a claim can be deemed "filed." A compensation form can be submitted concurrently with the registration form, but is not required. The two-step process would allow claimants to file quickly while the details of the full claims package and claims process are defined.

Upon submission of the compensation form along with the required proof, the 120- day processing window would begin. Not only would this reduce the burden placed upon claimants to submit enormous amounts of materials to have their claim deemed "filed" but it would also give DOJ a full 120 days to evaluate a substantially complete claims (except for whatever defects may still exist).

> Claim Defect/Dismissal

In keeping with the goal of maximizing assistance for and minimizing the frustrations of the claimants, a claim should not be dismissed outright if a claim is determined to be defective for some reason or another (e.g. lack of adequate supporting information). Instead, procedures should be implmeneted which allow a claimant to cure the defects (in eligibility and entitlement) in a reasonable timeframe. While a formal notification of the reasons a claim is considered incomplete is required, it is helpful to claimants to have someone call and coach them through what needs to be supplied to make the claim complete and valid.

>Presentation of Claim/Evidence

In similiar circumstances, having all claims initially filed on paper has been found to be quite effective. If the claim is deemed defective or the claimant is dissatisfied with the result, he or she can appeal the Special Master's decision; the appeals procedures could then allow for oral hearings under limited circumstances. Accordingly, the 120-day statutory claim-processing deadline would be satisfied while allowing for additional procedural safeguards.

A second option is a two or more track approach that gives to the claimants the choice of which procedures they would like to follow. For example, in the African American Farmers Discrimination case,[4] the class members could elect to participate under Track A, where the claim was submitted on paper and the class member recieved a fixed payout based upon a pre-determined payment grid, or Track B, where class members filed a claim for the amount they believed due and owing, but were required to present evidence at an arbitration.

Although there might be some concern that having an oral hearing option might unreasonably increase the work and cost of administering the Fund, experience shows that this is not typically the case. In the African American Farmers Discrimination case, out of approximately 23,000 claims, only 150 class members opted to pursue Track B.

In fact, when the procedural requirements are more demanding, when given the option, class members overwhelmingly choose the option with the more simple procedure, even when choosing the less onerous procedure will give them less compensation in the end. The MDL-926 National Breast Implant Settlement is a good example.[5]

After the original global settlement fell through in 1994 and notwithstanding the fact that the new settlement amounts offered to those who wanted to pursue the less onerous procedures in the 1995 settlement,[6] were substantially smaller than what was 1) offered in the 1994 settlement; and 2) what could be obtained following Option 2 of the new settlement (the option with more demanding procedures), approximately 92% of the class members who registered for the first settlement [7] chose to receive less money under Option 1.

In conclusion, the value in additional procedural safeguards for the claimants will far outweigh the potential increase in cost in administering these procedural safeguards.

>Claimant Assistance

In keeping with the goal of maximizing assistance for and minimizing the frustrations of the claimants, claimant support and assistance needs special and immediate attention. Assistance should be available via toll-free telephone (supporting multiple languages and the hearing impaired), the Internet and first class mail (as requested). During times of peak activity, consideration should be given to opening local assistance office(s). In the Swiss Banks[8] case, for the filing of "Initial Questionnaires" and claim forms, local organizations were called upon to assist in providing local assistances to claimants and, in some areas, specific claimant support offices were opened. Either having local help center(s) in New York and in Washington or educating staff in existing centers on the claims process for the Fund would be helpful to claimants. Regional information/assistance meetings would also be helpful in the early stages of the claims process. If claims processing specialists could be made available at these meetings, claimants could receive personal assistance without having to travel long distances to an established office.

Coordination with other Victim Support programs and organizations will further victim support and assistance goals without adding significant cost to the administration of the Victim Compensation Fund. For example, coordination with Trial Lawyers Care, Inc. [9] would give victims access to attorneys who are willing and available to give free legal services and other assistance to claimants who wish to file a claim against the Victim Compensation Fund.

In certain circumstances, coordination with other Victim Support programs could reduce Fund administration costs. Compilation of a mailing list of potential claimants is a perfect example. Since a comprehensive address list of victims and next of kin does not currently exist (to our knowledge), data may need to come from a number of sources. Depending on the source of the address data, and the inherent difficulties in identifying the appropriate claimants for those victims who are missing or dead, the level of undeliverable mail could be as high as 20-30%. By getting lists from other support programs that contain current addresses, less mail would be undeliverable, saving the costs of mailing and postage.

A number of organizations have collected data in connection with their outreach and victims assistance programs.[10] Coordination with these groups could give the DOJ access to current contact information, which would reduce costs associated with locating potential claimants and increase the effectiveness of the direct mail program.

>Eligibility and proof of identity requirements for missing (and presumed deceased) victims and for representative claimants who are filing claims

In order to reduce the incidence of fraud, a claimant should be required to submit proof of eligibility and identity at the time of registration. If the eligible victim is missing and presumed deceased, the person filing the claim should be required to provide proof of his or her legal status as the representative claimant. In addition each claimant should be required to sign a certification that the contents of their claim are true and valid.

>Proof of death for "missing" victims.

Although the rules for obtaining a death certificate have been modified to assist those trying to obtain death certificates for missing and presumed dead victims,[11] many may not yet have obtained a death certificate for their missing family member(s). Accordingly, a death certificate should not be required at the time of registration for the Fund. A copy of the petition for the death certificate and the affidavit filed with the New York Country Supreme Court by the next of kin (attesting to personal information about the missing victim) should be considered sufficient for Fund registration. However, the death certificate may be required before a claim is settled.

>Proof of legal status as "Representative Claimant"

Typically, the only person who can file is the actual claimant or an individual who legally represents the claimant or the claimant's estate e.g., personal representative, administrator, other legal representative, heir or beneficiary). As with the death certificate, if the representative claimant does not have an official copy of letters of administration or probate or surrogate certificate at the time of registration, following New York City's "next of kin" proof rules should be sufficient to prevent fraud.[12]

It is important that a balance be achieved between having sound fraud prevention procedures and not having claims filing requirements that are onerous for the victims or their next of kin.

Below is suggested language to be included in the registration form for representative claimants.

If you are representing a deceased's estate, please attach

1. An official copy of the death certificate and a copy of any letters of administration or probate or surrogate certificate,

2. A copy of the petition for death certificate and supporting affidavit; or

3. Complete the following:
Date of Death:

Reason for lack of death certificate:

If you are representing any other person as a Representative Claimant, please attach a copy of any order or other document appointing you the person's legal representative.

> Use of schedules or statistical methodologies to create an entitlement grid or matrix

In a complex mass tort settlement, a combination of settlement options is used. For more frequent, readily definable claims, entitlement grids are often used. In the cases of serious injury or death, where the proofs are more complex, review and calculation of an award on a case-by-case basis is more appropriate.

In re Unocal Refinery Litigation is an example of a mass tort personal injury settlement where entitlement was based upon a geocoded exposure grid.[13] If a claimant could prove that he or she either worked or lived within the defined zones of exposure (determined by geo-coding) and was present during the relevant time periods, the claimant was deemed to be a class member. Once eligibility was determined, three settlement options existed in the Unocal settlement:


Consideration should also be given to payouts in multiple stages, if part of the claim is straightforward and part requires research, legal ruling, or is dependent on the resolution of other payments, such as insurance. This will provide claimants with complex claims a balance between gaining immediate relief and due consideration of their claim.

> Publication of schedules or hypothetical or presumptive awards

Although published grids and/or schedules can be helpful to a claimant when deciding whether or not to participate in a settlement, DOJ will want to ensure that claims are not being created or inflated based upon DOJ's published injury categories and compensation numbers. This can be prevented, in part, if the guidelines for eligibility and damage elements are not subjective in nature or are otherwise objectively verifiable.

Presumptive awards, like the Unocal cash-out option, should be published. But publishing hypothetical awards can lead to claim creation/inflation. Publishing settlement ranges for each of the settlement options would give potential claimants adequare information to determine whether to file.

> Administrative Appeal Procedures

With experience supporting adminstrative appeals processes in several cases, including the complex Louisiana-Pacific siding class action, PD has found that certain procedures that can expedite the appeals process. In Louisiana-Pacific, a rejected claim appeals process was developed that separated procedural and substantive appeals. Appeals based on a procedural or calculation error were resolved by the Claims Administrator, while those that required a legal opinon were forwarded to the Special Master.[14]

By having this system of administrative appeal, the Special Master's office or a third party arbitration/mediation vendor is only burdened with appeals that require a legal opinion.

> FRAUD PREVENTION

In PD's experience, although fraud does occur, it occurs infrequently. If it does occur, it usually occurs at the time disbursement is to be made (e.g. request for payee change on check). With proper proof of claimant status and strict adherence to claim change rules, fraud can be prevented. Examples of deterrents include requiring proofs of claim, signing a certification, independent review of claims, having an audit process, adding approval levels based on the size of the claim. Controls for fraud prevention should be considered as the claims and disbursement processes are defined.

> Additional Comments

>Notice Considerations - greater overall response is achieved through the use of direct mail, paid advertising and public relations programming

Central to the design and implementation of a successful legal notice program is a clear understanding of how target audiences learn and understand new messages. Direct mail is only one method of communication important information to target audiences. Although DOJ may have access to mailing lists of potential victims (from e.g., the IRS), these lists will not be complete nor will they always contain information on next of kin and/or the current legal representative for a victim. Accordingly, a successful legal notice program includes not only a direct mail component, but also includes a well designed paid advertising and public relations program.

Because Americans are saturated daily with marketing messages (the victims and friends and families of victims of the events of September 11th are no exception), legal notice programs with proper consideration to notice process increasingly need to correctly target audiences by defining them demographically and psychographically.

Demography is the study of the characteristics of populations related to size, growth, density, distribution and vital statistics. Although demographic studies are important to the planning process, they are usually considered of secondary importance to psychographic studies that define media usage habits of individuals based on their values and lifestyle habits. With this information, legal noticing experts can develop highly targeted media plans based on media preferences of target groups. This is especially important in relation to the events of September 11th as many of the victims were not legal residents of the United States or were visiting nationals from other countries, which wouldn't allow DOJ to readily come up with a comprehensive list of these individuals.

Using a mixture of both paid and earned media creates greater effectiveness in a legal notice program. Here, potential claimants have an increased opportunity to see the message and then take action on the message. Integration helps to: 1) reach people not reached with the first vehicle; 2) create higher overall reach and a greater opportunity to see the message; and 3) provide additional repeat exposure in a less expensive secondary vehicle after a maximum reach is achieved in the first vehicle.

Public relations must be used in concert with paid media in order to support reach into a demographic target. Results from a public relations campaign are indirect and should not be used to supplant advertising. Public Relations are dependent on a host of factors that are difficult to control; ultimately an editor, reporter or special interest group will process the message and interpret it. However, in spite of its limitations, public relations work is an essential component in any effort to achieve effective public outreach. Studies show that information conveyed through editorials is generally more believable and acted upon more readily than conventional advertising. Both advertising and public relations must work hand-in-glove in order to achieve the goals of this plan.

> Disbursement Considerations

Either before a claim is adjudicated, after it is adjudicated or in tandern with the adjudication process, any other payment sources (insurance, other funds, etc.) that qualify to be considered as a deduction from payment by Victim Compensation Fund will need to be identified and researched.

Since these payments may be made before, during or even after the Fund's payment is calculated, this could be a lengthy process. If other payments must be deducted from the Fund's payment and it is likely that it will be some time before the other payments are made, then the Fund may want to consider a two-stage settlement. The first stage will give a base amount to claimants to provide near term relief. Then the final amount of the Fund settlement will be determined as the other payments are made.

> Technology Considerations

The DOJ should endeavor to utilize current computer technology, which will increase speed and efficiency while decreasing processing costs and choose an administrator that is technologically advanced and able to use technology innovatively to reduce cost, without incurrig risk.

Services to be considered by JOJ should include:



Sincerely,

Comments by
Poorman-Douglas Corporation


___________________
[1] Mowen and Minor, CONSUMER BEHAVIOR 334 (Prentice-Hall, 5th ed., 1998).

[2] Http://www.fjc.gov.

[3] MANUAL FOR COMPLEX LITIGATION THIRD 227 (3RD Ed., 1995).

[4] A summary of the African American Farmers Discrimination case administration procedures and PD's work with the case Special Masters is attached hereto as Attachment 2.

[5] The history of this litigation can be traced on the MDL-926 court's website, located at http://www.fjc.gov/BREIMLIT/mdl926.htm.

[6] MDL-926 Order No. 27, et. seq.

[7] Excluding the Dow Corning class members who were ineligible for the second settlement after Dow Corning filed for bankruptcy mid-1995.

[8] A summary of the Swiss Banks case notice procedures is attached hereto as Attachment 3.

[9] Trial Lawyers Care, Inc. is the non-profit corporation set up by volunteer trial lawyers across the nation to provide access to free legal services to the September 11th terrorist attack victims who are eligible and choose to make claims under the federal September 11th Victim Compensation Fund.

[10] Groups that have been collecting victim information include the Family Assistance Center, located at Pier 94 in New York City, and Trial Lawyers Care, Inc.

[11] Procedures can be found on the official New York City website at http:/www.nyc.gov/html/cm/dth_cert.html.

[12] From Appendix B to the Procedure for Issuance of Death Certifications for Individuals Currently Missing at the World Trade Center:

In order to prevent fraud, next of kin making an application for a declaration of death should provide the following:




  • a document or documents establishing the relationship between the affiant and the missing person; this proof may take a variety of forms, depending on the relationship between the next of kin and the missing person, but examples include:


    •     1. for spouse, a marriage certificate.
        2. for registered domestic partner, the domestic partnership registration.

        3. for a child 18 years of age or older, or a parent, a birth certificate showing the missing person's relationship to such child or parent.

        4. for a brother or sister, birth certificates of the missing person and such sibling showing common parents.

    [13] Class members were exposed to allegedly toxic or hazardous substances that were released from a Unocal refinery incident to several tank fire incidents.

    [14] Additional information on Louisiana-Pacific procedures can be obtained from the case Special Master and former Oregon State Supreme Court Judge, the Honorable Richard L. Unis, (503) 669-7286.

    [15] See the Swiss Bank website as an example, located at http://www.swissbankclaims.com/.

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