N002419
FAX TRANSMISSION
DATE: 1/21/2002
TO: Mr. Kenneth Zwick, Department of Justice
Re: Interim Final Regulations Governing Payments Under the
September 11 Victims Compensation Fund
Dear Mr. Zwick:
Attached are copies of letters sent today to Senators Clinton and
Schumer.
Thank you for your consideration.
Sincerely,
Individual Comment
Attachment 1 of 2:
January 19, 2001
Senator Hilary Clinton
Dear Senator Clinton,
My sister's husband , and father of two little girls was aboard American Airlines
flight 11 when it was slammed into the World Trade Center on September 11, 2001.
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 the 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 victim's 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 actually 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 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 far 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 victim's families. This high burden of proof makes a charade of the right to a
hearing provided by the statute. DOJ should fulfill that 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 provide 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 finds, 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.
Attachment 2 of 2:
January 19, 2001
Senator Charles Schumer
Dear Senator Schumer,
My sister's husband , and father of two little girls was aboard American Airlines
flight 11 when it was slammed into the World Trade Center on September 11, 2001.
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 the 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 victim's 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 actually 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 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 far 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 victim's families. This high burden of proof makes a charade of the right to a
hearing provided by the statute. DOJ should fulfill that 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 provide 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 finds, 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.
Sincerely,
Individual Comment
Selkirk, NY