N002466
January 18, 2002
Kenneth L. Zwick, Director
Office of Management Programs
Civil Division
United States Department of Justice
Main Building, Room 3140
950 Pennsylvania Avenue NW
Washington, D.C. 20530
Dear Director Zwick:
I am submitting the following comments on the proposed Interim Rule concerning the
September 11th Victim Compensation Fund of 2001.
I appreciate the significant challenges faced by the Department of Justice in drafting the
Interim Rule concerning the implementation of the September 11the Victim Compensation Fund
of
2001. Although I am in general agreement with many of the provisions of the Interim Rule, I
believe that in fairness to all victims fo the September 11th attack, and in accordance of the intent
of Public Law 107-42, some of the provisions should be changed.
Section 104.2 of the Interim Rule establishes certain criteria for determining who may be
eligible for compensation from the Fund. One criterion requires that the victim suffer physical
harm in the attack. Physical harm is defined as: "a physical injury to the body that was treated by
a medical professional within 24 hours of the injury having been sustained or within 24 hours of
rescue; and (i) Required hospitalization as an impatient for at least 24 hours; or (ii) Caused,
either
temporarily or permanently, partial or total physical disability, incapacity or disfigurement."
While
I recognized the difficulty of defining "physical injury" for the purposes of recovery form the
Fund,
I believe that the definition chosen is too narrow and would fail to account for those who suffered
physical injuries deserving compensation but are unable to satisfy the temporal threshold. There
may be circumstances where a person was not treated within 24 hours of rescue or injury due to
the confusion existing at that time, and yet required a 24 hour hospitalization or incurred a
documentd disability, incapacity or disfigurement. I urge you to amend this section to give a
claimant an opportunity to provide evidence of physical injury regardless of when the initial
treatment occurred, provided medical documentation can be provided. Establishment of a
documented physical injury caused by the attack, and the provisions linking the amount of
compensation to the seriousness of injury, ensures a just, equitable award regardless of when the
initial treatment was given.
Section 104.41 of the Interim Rule establishes the minimum level of compensation from
the Fund to be no less than $500,000 for a decedent with a spouse and/or children and $300,000
for a decedent with no family prior to set-offs. I appreciate the difficulty in determining a just
level of minimum award. However, there was significant, persuasive public comment concerning
the minimum level of compensation. I urge you to reconsider and raise these levels in light of the
concerns expressed by victims and victim families, and make them at least commensurate with
existing tort awards for serious injury of death.
I also urge you to consider establishing a minimum award net of all collateral sources. I
understand the statutory language requires an offset of collateral sources including life insurance,
pension funds and death benefit programs. However, such collateral should not
completely offset an entire award. It is unfair for family members of a decadent or a seriously
injured individual to be completely uncompensated from the Fund for their loss. It is very rare
for a tort judgment to be completely offset by an insurance award, as it is unjust for the negligent
party to escape liability for damages simply because the victim was astute enough to carry
significant life or health insurance. In this instance, the Fund stands in the shoes of the negligent
party-because the victim foregoes the right to seek compensation in a civil action against
potentially liable parties-and so the Fund should provide some minimum benefit where collateral
sources will completely offset the award.
There are two other issues concerning collateral sources that should be clarified in the
final
rule. First, if a collateral source such as life insurance is used as an offset, the offset amount
should
be reduced by any premiums paid by the decedent. Second, the final rule should ensure that a
collateral source such as life insurance is only used as an offset if the eligible claimant is a
beneficiary of the collateral source. For example, the decedent may have a life insurance policy
where the spouse is the beneficiary but the eligible claimant si the mother of the decedent. In this
example, the mother's claim should not be offset by the life insurance carried by the decedent.
Section 104.47 of the Interim Rule, which concerns donations from private charities, is
vague, confusing and, depending upon how it is applied, will potentially frustrate the purpose of
the Fund.
Section 104.47 (b)(2) begins with the broad statement that donations distributed to claim-
ants by private charitable entities do not constitute collateral source compensation. However, it
then goes on to provide "that the Special Master may determine that funds provided to victims or
their families through a private charitable entity constitute, in substance, a [collateral source
compensation]." On its face, the rule seems self-contradictory and arbitrary, that is, distributions
from charities will not be considered collateral compensation unless the Special Master thinks
otherwise. There are two potential devastating consequences to such a rule.
First, as Part E of the Statement of the Special Master acknowledges (66 Fed. Reg.
66279), the rule will have the perverse effect of encouraging charities to withhold their distribu-
tions until after claimants have received their award for the Fund. Some charities have been
criticized for not distributing quickly enough the donations made by millions of compassionate
Americans. The Rule should not exacerbate, or indeed encourage, this already unfortunate
situation.
Second, the Rule provides no guidance as to when a distribution from a charity will or
will
not be considered a collateral source payment. This lack of a clear, bright line test could lead to
arbitrary decisions, in which victims and their families will be treated differently even though
their
factual circumstances are similar.
If, contrary to the above interpretation of 104.47 (b)(2), the intent of the Rule is that only
pension funds and death benefits received by virtue of the claimant's employment with a charity
will be considered as collateral source compensation, then the Rule should be amended to so
state that precisely. In its present form, such an intent is far from clear.
In short, the Rule should
clearly, completely and definitively exclude voluntary, charitable contributions from being
considered as collateral source compensation. This rule would be consistant with the collateral
source law in many other states, including Connecticut, New York, California, and
Massachusetts, to name a few, that do not include charitable funds form offsetting civil awards.
Section 104.52 provides that the distribution of the award should be in the manner
consistent with the law of the state of the decedent's domicile. The Rule's comments seem to
leave the decision on distribution to the personal representative of the victim. However, the Rule
also provides for the Special Master to direct payments when the Special Master does not feel the
Personal Representatives's plan "appropriately compensates the victim's spouse, children or other
relatives." The Rule should clarify that eligible dependents are defined in accordance with state
law. The Rule should delete the reference to "spouse, children or other relatives" and insert
"eligible dependents under state law." The current reference seems to limit those eligible for an
Award to a spouse, children or blood relative. Over the years, our concept of family has been
extended to include not only spouses and blood relatives. In some instances, there is a person
whose relationship with the victim has not been consummated by marriage but may be
recognized
under state law as being eligible for an award. The Rule should not exclude these individuals.
Very truly yours,
Comment by:
Richard Blumenthal
Attorney General for the
State of Connecticut