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Friday, January 18, 2002 7:51 PM
Comments on Interim Rule
Kenneth L. Zwick, Director
Office of Management Programs
Civil Division
US Department of Justice
Main Building, Room 3140
950 Pennsylvania Ave
Washington DC 20530
This is response to the request for comments on the Interim Final Rule
(Rule) implementing Public Law 107-42.
Public law 107-42, the Air Transportation Safety and System Stabilization
Act (Act), is designed to provide Federal financial relief to the American
airline industry due to losses from management mistakes and potential losses
the airlines could sustain from their negligence in failing to maintain
reasonable security standards. It provides airlines Federal grants of $5
Billion, and loan guarantees of $10 billion. More importantly it ex post
facto limits damages that airlines are faced with from their negligence on
September 11th to their insurance coverage.
As part of the stabilization of the airline industry, as well as to protect
other potential business defendants, the government has agreed to a fast
track system for victim compensation. In exchange for giving up their right
to sue under various Federal statues and state tort or wrongful death laws
injured claimants or personal representatives of deceased claimants acting
on behalf of the decedents will be compensated by the Federal government.
Claimants are giving up a valuable right as judgements for damages resulting
from other terror attacks have been in the $100 million range.
The purpose of the victim compensation part of the Act is to compensate
those injured or killed on September 11th (Act, Sec 403.) Unfortunately the
Special Master has interpreted his mandate as not to compensate, that is to
make whole for the loss incurred, but rather to "bring some measure of
financial relief." From this misinterpretation, presumably deliberate in an
attempt to reduce Federal expenditures, flow many of the problems with the
Final Rule.
The first major problem with the Rule as written is that the Rule turns the
application for compensation into a crapshoot. Both the Act and Rule (as
well as ancillary documents developed by the Special Master) are vague as to
what will be considered in determining compensation as well as "collateral
compensation" (setoffs.) While a claimant has no idea what if any
compensation they will receive since economic loss is unclear as well as
setoffs, the claimant by the simple act of filing precludes other more
appropriate remedies (Rule, Sec 104.21 (d).) There is no methodology in the
Rule for a claimant to obtain an accurate assessment of whether it would be
more beneficial for them to pursue other remedies then file a claim under
the Act. The Rule should be amended to include a procedure for an assessment
to be given prior to a claim being considered filed. Such an initial
assessment is not precluded by the Act.
The second major problem (and related to the first) is that the Rule gives
no indication of how the Special Master decides the many issues or how
issues are settled as claims are paid. There are no prior legal decisions
providing precedent. A record of decisions needs to be created. As the Act
precludes judicial review such a record would assist claimants and assure
that there is no abuse of discretion. In particular, Rule, Sec 104.31 (b) 1,
should be amended to indicate that the Claims Evaluator will notify the
claimant of "... the amount of the presumed award, the basis for the
decision... "
In view of the above, Rule, Sec 104.33 (g), should be changed to read
"...the final amount of the award and a written decision of the basis of the
award. This document will be made available to the public." Damage awards
and other legal matters are generally public records. That the compensation
awards and decision making are public record infringes on no right to
privacy, provides transparency, and precludes abuse and safeguards equity in
the decision process.
The third major problem is the inherent conflicts between the Act and the
Rule. My comments will be based on the perspective of a personal
representative of a decedent as the claimant as they may differ from the
issues affecting an injured claimant.
The personal representative of the decedent has no legal authority over the
spouse, beneficiaries or dependents of the victim (decedent claimant.)
Spouses et. al. may have separate causes of action (e.g. intentional
infliction of emotional distress, loss of consortium or companionship)
arising out of state or federal law. Rule, Sec 104.21 (b) (1), should be
changed to eliminate all after "...of the Act." The claimant is the
"...personal representative of the decedent who files the claim on behalf of
the decedent." (Act, Sec 405 (c) (2) (C).) Under Act, 405 (c) (3) (B) (i),
only the "...claimant waives the right to file a civil action..." The
personal representative has no legal authority to demand that individuals
other than the claimant (dependents, spouse or beneficiary of the victim)
waive their rights.
Pensions, either as economic loss or as collateral compensation are not
discussed in any detail in any of the material provided by the Special
Master or in the Rule.
Almost twenty percent of those murdered by Moslem fundamentalists on
September 11th were rescue workers (firemen, police, paramedics) or
military. Their pension benefits are an essential and valuable part of their
compensation as the government has long recognized that the arduous and
dangerous nature of their occupations preclude long term employment.
Neither the Rule nor the Special Master?s Presumed Economic and Non-Economic
Loss Tables (Loss Tables) consider pension benefits in determining economic
loss. The Act broadly defines economic loss as "...any pecuniary loss
resulting from harm (including...other benefits resulting from
employment..." (Act, Sec 402 (5).) The Rule, however, narrows economic loss
to "...loss of earnings or other benefits related to employment..." and
confines itself to a table based on the individual's earnings in the last
three years (Rule, Sec 104.43 (a)) (Underlining added.) Further, the Loss
Tables are based on the anticipated working life (till age 65), whereas the
pension benefit is normally a lifetime benefit (and ceases on the death of
the recipient.)
The Rule and Loss Tables severely distorts to their detriment the actual
economic loss sustained by rescue worker and military decedent claimants.
For example, a military retiree working at the Pentagon would receive both
civil service pay and a military pension. On the day of death, both his pay
and pension ceased. There is no pension benefit for the spouse of a military
retiree. The military retiree decedent claimant?s economic loss is his
lifetime pension plus loss wages. Based on the Rule and Loss Tables,
however, the only economic loss is the loss civil service wages, a mere
pittance of the actual economic loss.
Many of the rescue workers had vested pensions; others had anticipatory
rights to pensions. Valuation is not an issue as Courts have long dealt with
such valuations in damage awards and divorce cases.
Pensions as economic loss need to be addressed in the Loss Tables and Rule.
The words in Rule, Sec 104.43 (a), stating "related to employment" should be
changed to read "resulting from employment." All after that should be
totally revised to include consideration of pensions as economic loss. The
Loss Tables need to be revised to include lifetime pension benefits.
Non economic loss is based on the decedent claimants loss, not damages
suffered by others who have there own separate causes of action. Why,
therefore, does a decedent claimant with a spouse and dependents receive
more? The non economic loss of all decedent claimants is hard to measure;
the value of their life experiences should be the same for all. Rule, Sec
104.44, should be changed to read "The presumed non economic losses for all
decedents shall be $250,000" (or whatever amount may be more appropriate.)
All after should be deleted.
The issue of what payments are collateral sources considered as collateral
compensation is not clarified by the Rule, Loss Tables and the Special
Master?s Frequently Asked Questions (FAQ). A review of the responses to date
to the Rule indicates this is a major sore point. Perhaps if the Special
Master issued his Death Compensation Form clarification as to his intent
would be forthcoming.
The Act identifies collateral sources. It also specifically states that
compensation received by the claimant is reduced by the collateral source
compensation "...the claimant has received or is entitled to receive as a
result of the terrorist-related crashes..." (Act, Sec 405 (b) (6).) The
Rule, Sec 104.47 (a), however, deletes that portion of the above that states
collateral compensation are payments to the claimant. The Rule should be
changed to read "...reduced by all collateral source compensation the
claimant has received or entitled to receive, including..." This would
conform to the Act.
Failure to designate who is the recipient of collateral sources considered
may result in grave miscarriages. For example, a partnership may have a
substantial policy on a decedent claimant. That payment goes to the
partnership, not to the decedent?s survivors. To reduce compensation to the
claimants estate for this policy would be unconscionable.
The tenor of the comments from the Special Master, though not stated
directly, is that benefits paid to others than the claimant will be deducted
from the compensation award. Yet exceptions are made. The FAQ at 1.11
indicates that the Special Master will not subtract from the award amount
collateral sources where "...the contribution to the plan were deductions
from the the victim?s compensation." Does this mean all plans where the
contribution was from compensation? For example, a military retiree?s
pension ceases on his death; there is no benefit for the spouse. If the
retiree so chooses, however, the retiree could contribute 14% of his monthly
retirement compensation to purchase a Survivors Benefit Plan that pays a
surviving spouse 55% of the retiree?s retirement benefit. This is a
voluntary plan purchased by the retiree. Other retirement plans may have
similar survivor benefit provisions. None of these plans make payments to
the claimant or the claimant?s estate or the personal representative of the
decedent acting on behalf of the decedent as claimant. The Rule should be
rewritten to eliminate all the ambiguity regarding the issue of collateral
compensation particularly in light of the lack of judicial review and the
amount of discretion provided the Special Master.
The fundamental flaw with the Rule is the discrepancy between the Act as
written and the Special Masters intent to limit compensation. This was not
the congressional intent. When the Act was enacted the Government was aware
that its prior lack of action made the Moslem fundamentalist attack on the
United States so successful.
The United States was under constant attack by Moslem fundamentalist
beginning with their bombing on the World Trade Center in 1993. In response
all our government did was issue proclamations, make speeches, and fire a
couple of missals in the air, landing God knows where. The government?s
impotence supported the Moslem fundamentalist perception that America was
morally weak.
President Clinton reinforced this perception by his own degenerate personal
behavior as well as his often publicly proven tendency to lie to achieve his
ends. Retaining Clinton in office made us a joke to the world. It also
bolstered the perception in this country that laws need not be enforced if
inconvenient, making the terror attacks easier to carry out.
Needless to say Clinton was not totally alone in being responsible for his
eight years in office. Our members of Congress from both parties failed to
demand Clinton take responsible action. Mesmerized by greed and the good
times that globalization was supposedly accomplishing; no one wanted to
force Clinton to take real action that would require hard decisions.
When Congress passed this Act it was their attempt to assuage their
conscience for their failure to protect the citizens of this country. A
liberal interpretation as to what is just compensation under the Act is
required.
Thank you for your consideration. I realize many of these comments have been
made before, however, the vagueness of the proposed rule and the lack of
response to the prior comments by others compel me to respond as I have.
Individual Comment
San Francisco, CA