N002019
Friday, January 18, 2002 8:01 PM
Comments on Interim Regulations
The interim regulations (28 CFR Part 104) relating to the Victims
Compensation Fund (the Fund), in part, do not comport with the enabling
statute (Public Law 107-42, Title IV). Specifically, Mr. Feinberg's matrix
scheme for determining compensation to applicants of the Fund violates the
letter and spirit of the purpose of the Fund, i.e. to provide fair and just
compensation to the victims of the horrific events of 9/11 in proportion to
their particularized loss, what ever that may prove to be, without
limitation.
Public Law 107-42, Section 405(b)(1)(B)(ii) of the "Air Transportation
Safety and System Stabilization Act" (the Act) provides that the
compensation to which a claimant is ENTITLED must be based upon the harm to
the claimant, the facts of the claim and the INDIVIDUAL CIRCUMSTANCES of the
claimant.
The matrix formulated by Mr. Feinberg treats every claimant the same, as to
non-economic damages, in a completely arbitrary manner, setting a cap of
$250,000 per decedent, plus $50,000 each for certain family members. Such a
scheme is a clear violation of the statute, as it ignores the actual harm to
a claimant, the particular facts of the claim and utterly fails to account
for the individual circumstances of the claimant. Also, the Act provides no
authorization for Mr. Feinberg to set caps on these claims. The fact that
the Act requires a particularized analysis for each claim and claimant
strongly implies that Congress intended no caps. Had caps been intended,
Congress would have set forth such caps in the statutes.
As to economic damages, Mr. Feinberg's matrix scheme caps annual earnings
for any given individual suffering death at approximately $230,000 as a
basis for determining loss of expected lifetime earnings and earning
capacity. He arbitrarily uses an earnings scale up to the top 98%
(approximately $230,000 annual earnings) of the workforce. In using this
scale, Mr. Feinberg ignores the individual circumstances attending the
economic loss of individuals earning in the top 2% of earners in America.
For example, a young 30 year old bond trader at Cantor Fitzgerald earning
$2,000,000 annually will be offered a loss based upon the arbitrary
assumption that her earnings are not now, nor will ever be, more than
$230,000 annually. This is arbitrary, egregiously inadequate and in no way
represents fair and just compensation for such a person, as the Act
requires.
As to the non-economic damages, $250,000 does not reflect fair and just
compensation. Hedonic damages alone has been valued by the United States
Department of Transportation to be $2,700,000, over 10 times what Mr.
Feinberg has set for all non-economic damages, not just hedonic damages.
That analysis was made in 1993 and if adjusted for present value would be
even more.
In conclusion, the Act requires that Mr. Feinberg abandon this
cookie-cutter, arbitrary matrix scheme that arbitrarily and inadequately
treats every claimant the same for non-economic damages and economic damages
of those earning in the top 2% of wage earners.
Individual Comment
Los Angeles, CA