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
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
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
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