N002586
DATE: Jan. 22, 2001
TO: Kenneth Zwick, Director
PAGES INCLUDING COVER SHEET 13
US Dept of Justice
RE: Comments re: Interim Final Rules.
MESSAGE: Here is a copy of the letter that we faxed to Ken Feinberg.
Kenneth R. Feinberg, Esq.
January 21, 2002
In the meantime, we submit these comments with the hope that they will lead to
modifications of the announced interim regulations. We applaud Congress' intent to grant awards to the victims of September 11th. We agree that it would be in the victim's best interests to settle with the fund, rather than pursue years of litigation against the Airlines, Port Authorities and other potential culpable parties. However, we fear that the regulations as promulgated, and the accompanying tables, will not produce the desired result. We agree with that unless there are changes in the regulations and the way that you have indicated that they will be applied, there are effectively arbitrary limitations on recoveries of both economic and non-economic losses that will encourage victims to avoid the Fund. This was not Congress' intent. If the interim restrictions are applied, many families will opt out of the Fund and elect litigation.
Kindly consider the following suggested modifications:
1. Pensions: It is patently unfair to count 100% of a deceased or seriously injured firefighter's pension when computing net awards. Those pensions are assets which firefighters have earned. The City of New York lures young men to very dangerous jobs as firefighters paying them relatively low wages for years with the promise of a healthy pension after 20 years. after 10 years, 50% of the pension has been earned. It is deferred compensation. Why should this deferred compensation be considered any different than savings in a bank account?
Moreover, the statue does not require the collateral sources be offset against the entire award. A collateral source that provides an economic benefit should only offset economic loss. The regulations should be amended to provide that regardless of the label, payments which are in lieu of deferred compensation are not collateral sources. Any contribution by a victim or on behalf of a victim as part of this compensation package should not be deemed a collateral source when it is returned to the victim's family in the event of his death or inability to work due to permanent injuries.
I am sure that the Fund will be determining awards on behalf of business people who died who had not yet set up a pension for themselves. We have met with the widows of several
businessmen who died on September 11th who fall into this category. Instead, those men spent
their incomes on assets such as homes or expensive life styles that included live-in help and private schools. Instead of establishing a pension, these investment bankers saved substantial portions of their money in the bank and/or invested it in the stock market. We question how it could be fair that firefighters (who do not earn close to the income of an investment banker) be penalized for having a pension, while a business man is not penalized for having his assets (i.e., home stock portfolio or bank account) counted as a collateral source. To do so would be equally unfair. If the current regulations are used, an investment banker making $500,000 per year (who was short sighted by not purchasing life insurance or establishing a pension) will be rewarded for his fiscal choices while firefighter will be penalized.
If the Fund insists on counting a portion of a firefighter's pension as an offset, it should consider only counting a portion of the pension as an offset (and then again, only against the economic portion of the award). So, with regard to the economic component of your awards we respectfully suggest, that if you must use a portion of a firefighter's pension to offset the presumptive award, that you consider counting only that portion of a person's pension that has not yet been earned. For instance, if a firefighter had worked eight years prior to September 11th, the 8/20 (or 40%) of his pension should NOT be counted as a collateral source to reduce his award, while 12/20 (or 60%) of his pension may be counted as a set-off against economic portion of the award.
2. Non-economic losses to those who died: Again, collateral sources should not be used as offsets to non-economic awards. However, the Fund must recognize that the presumed awards for non-economic losses are a fraction of what juries typically award for those damages. This injustice must be remedied. While we appreciate the value of avoiding years of litigation, we cannot recommend awards of $250,000 for the pain and suffering sustained by those who died on September 11th. The suffering endured by firefighters who died is unspeakable. The suffering endured by their families continue. The presumed award of $50,000 for a decedent's spouse and each dependent is unconscionably low and fails to consider the decedent's true value to his family, including the spouse's loss of services and his children's loss of parental guidance. No recognition for loss of enjoyment of life is being made (i.e., those for "hedonic damages" which were part of the original VCF regulations). We respectfully suggest that a minimum award starting at $500,000 per decedent, plus $100,00 per spouse and child would fairer and have a greater chance to convince families to opt for the fund and not litigate. These amounts must be guaranteed - with no offsets.
3. Non-economic losses to those who suffered injuries: The Fund must recognize that many firefighters, police officers, sanitation workers, etc. who sustained respiratory illnesses during the first four days after September 11th did not seek medical attention for weeks or even month. They were not about to stop looking for their fallen brothers unless they were ordered off the site. They were not likely to complain about shortness of breath, vomiting, sinus conditions and persistent coughing, while going from funeral to funeral. Therefore, the regulations must do away with the requirement that the claimant sought medical attention within 24 hours. Any medical documentation that relates a claimant's injuries to September 11th should suffice.
4. Injured firefighters who sustained severe respiratory damage: Those firefighters who sustained severe respiratory damage (such as emphysema, acute and chronic asthma, "RADS" - Reactive Airways Dysfunction Syndrome [see Newsday article enclosed], loss of lung capacity and scarring of lungs) who make no claim for lost earnings to the Fund, should not have their pensions used as collateral sources to reduce their awards. As the New York Court of Appeals held in Iazzetti v. City of New York, 94 N.Y. 2d 183 (1999), firefighters' pension benefits cannot be used to offset jury awards for fortune lost earnings in cases against the City of New York. As we told you, we have filed nearly 1,000 Notices of Claim against the City of New York for its failure to timely provide respirators to rescue workers at ground zero. While the blood tests are not yet known, FDNY doctors suspect that inhalation of dangerous toxins during the rescue and recovery at ground zero
is responsible for over 25% of firefighters' developing asthma, emphysema and other pulmonary problems. We know that rescue workers t ground zero were exposed to dangerous levels of mercury, asbestos. lead, chromium, benzene, PCBs, dioxins and dibenzofurans. It may be years before the full extent of the respiratory damages and other disease sustained are known. It may be years before it is known which firefighters are forced to retire (and who will and will not receive line-of-duty pensions). To count pension awards only against firefighters who apply for and receive pension awards during the next two years, while the Victim Compensation Fund is in existence, would be short sighted and unfair. The VCF should not put itself in the position of trying to guess who will and will not get a pension. The pension should not be a factor considered by the Fund.
CONCLUSION
In conclusion, we are mindful of the nearly impossible task that the Department of Justice and Special Master have been given by Congress. The legislative intent to save the airlines from bankruptcy and to help the City of New York avoid lawsuits, while enabling victims and their families to avoid years of litigation, is admirable. However, the regulations must be modified to make them fairer to victims who were responsible in their fiscal choices, victims who took jobs that gave their families life insurance and pensions.
Very truly yours,
Individual Comment
MB:es
Enclosure
ATTACHMENT 1
Newsday, Trouble in the Air at Ground Zero, By Delthia Ricks
ATTACHMENT 2
94 N.Y.2d 183, *; 723 N.E.2d 81, **;
1999 N.Y. LEXIS 3750, ***; 701 N.Y.S.2d 332
Mario Iazzeti et al., Appellants, v. City of New York, Respondent.
No. 183
COURT OF APPEALS OF NEW YORK
94 N.Y.2d 183; 773 N.E.2d 81; 1999 N.Y. LEXIS 3750; N.Y.S.2d 332
October 20, 1999, Argued December 2, 1999, Decided