Thursday, January 17, 2002 4:35 AM
Victims Compensation Fund

Dear Sir or Madam,

My name is     and my son was murdered in the terrorist attack on the World Trade Center. His name is     and he worked for     on the     floor in WTC1. He only lived to be 25 years old. His career prospects could not have been any brighter and the scope for promotions and earnings potential was phenomenal; but that was before September 11.

I am writing to express my serious concerns and objections to the Department of Justice's (DOJ) "Interim Final Regulations Governing Payments Under the September 11th Victim Compensation Fund."

The airline bailout act gave the airlines $15 billion in cash and loan guarantees and capped the airlines' liability for the September 11 crashes at the limits of their insurance coverage. Because of this cap, the damage caused by the crashes greatly exceeds the private fund available to compensate victims and their families. Thus for the vast majority of victims and families, the cap has the effect of eliminating the right that they would otherwise have to sue the airlines.

Congress set up the fund to ensure that the airline bailout would not come at the expense of the victims' families. The act mandates full and fair compensation to victims and their families for their actual economic and non-economic damages. DOJ has ignored this mandate and instead has written arbitrary regulations that will result in compensation levels far below the losses actual suffered by the victims and their families. In fact, many families' total compensation from the fund and all collateral sources combined will not even fully replace lost income. In effect, these families will not receive any of the non-economic compensation required by the statute.

After collateral sources are deducted, as required by the statute, some families would receive nothing from the fund under the interim final regulations. DOJ's formula allows for non-economic awards at only one-tenth the level paid in comparable cases, even though Congress explicitly enumerated a broader range of non-economic damages than could be recovered in any single jurisdiction.

DOJ's formula for non-economic damages is $250,000 for the person killed and $50,000 for the spouse and each dependent. In a wide variety of air crash and terrorism cases, however, judges, juries, and mediators commonly have provided non-economic damage awards well into the seven-figure range. Independent economists have found serious flaws in DOJ's method of calculating economic damages, including use of outdated and inapplicable worklife and life-cycle earnings data.

DOJ greatly underestimates promotions and other increases in earnings for victims. It relies on civil service and military retirement system actuarial data that track federal worker incomes and pension requirements, not the higher-paying private sector career paths followed by the vast majority of the victims. The interim final regulations also arbitrarily cap a victim's income at $231,000 a year. Combined with the faulty methodology described above, the income cap would result in some families receiving compensation for less than 25% of their actual economic losses.

Under DOJ's rules, a family's award may be increased above the "presumptive" award only by a showing of "extraordinary circumstances" -- beyond those suffered by other victims or victims' families. This high burden of proof makes a charade of the right to a hearing provided by the statute.

DOJ should fulfill the act's intent by revising the rules to compensate victims and their families for the types of damages specified by Congress, at levels comparable to those provided in the tort system the fund was designed to replace.

While DOJ has shown flexibility on some aspects of the rules, it is resisting the victims' and families' requests for significant changes. If the proposed regulations are not changed significantly, victims' widows will have to sell their homes, deplete their children's college funds, and give up their plans of being full-time parents while their children are young. Many families, anticipating little relief from the fund, will decide to sue the airlines and others, despite the handicap of the liability limits. We do not believe these are the outcomes Congress intended.

Please contact Attorney General John D. Ashcroft and Special Master Kenneth R. Feinberg and tell them of your concern that the interim final regulations fail to conform to the language and intent of the act. With the regulations soon to become final, I believe that only the swift and strong support of Congress can avert unnecessary financial and emotional damage. Thank you for giving this matter your immediate attention.

Yours truly,

Individual Comment
Gothenburg, Sweden

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