P000154
February 4, 2002
The Honorable Kenneth R. Feinberg
Special Master
United States Department of Justice
Victims Compensation Fund Program
950 Pennsylvania Avenue, N.W.
Main Building, Room 3136
Washington, D.C. 20530
Dear Special Master Feinberg:
Thank you again for coming to East Brunswick on January 16 to discuss the Victims Compensation Fund. Your outline of how the Fund works was very concise and the attendees to the meeting truly appreciated that you made yourself available to answer their questions.
As you well understood, some of the principal concerns about the Fund are the collateral source deductions, the calculations of economic and non-economic losses, and the question of whether or not the Fund or any award thereunder is capped. These concerns apply to all who may choose the Fund and go to the basic issues of fairness and clarity: will Fund participants receive something fair in return for waiving their right to sue and will they have a clear idea of what it is they will receive before they opt in. Below, I have set forth my understanding of your position on these points.
With respect to the issue of caps, my understanding from the meeting is that you plan to revise the regulations to clarify that there is no cap on the Fund as a whole and that there also are no caps on economic or non-economic losses. The "presumed" economic and non-economic loss amounts are "presumed", not limited. Further, with respect to the presumed economic loss tables, my understanding is that they were based on national average income figures, rather than New Jersey or New York Metropolitan area averages. Using national averages is not appropriate under these circumstances. With respect to the presumed non-economic loss figures, I believe that those were based on awards in cases of lost government or military personnel, who accepted the risks and dangers they faced. Using that basis is also not appropriate. Finally, national data tend to underestimate the earnings and future earnings potential of women and minorities. Therefore, I look forward to revised regulations which incorporate presumed economic and non-economic loss figures based on comparables and assumptions that more appropriately reflect the circumstances of all of the victims in this case. In addition, please clearly set forth in the regulations the methodology used to determine the presumed loss amounts.
With respect to the issue of collateral source deductions, as you may know, I have proposed legislation in the House of Representatives to repeal the Air Transportation Safety and System Stabilization Act to the extent that it requires collateral source deductions. In the event that such legislation does not pass, however, I understand that you mean to minimize the deduction of collateral source amounts in general. The regulations now state that charitable contributions will not be deducted (except within your discretion). I also understood you to say that you would not deduct Social Security benefits, workers compensation benefits and certain pensions, and that life insurance premiums would be netted out. Certainly, individuals should not be penalized for good financial planning and personal fiscal responsibility. Therefore, I look forward to revised regulations that more clearly express which collateral source amounts will not be deducted.
With respect to the issue of fundamental fairness and clarity, I wish to reiterate the first point I made in my letter to Kenneth Zwick dated November 19, 2001. In order for people to feel comfortable choosing to participate in the Victims Compensation Fund Program, they must have a reasonable certainty of what they would receive before they waive their right to sue. I am certain that you are of the same mind, since you said on more than one occasion that "nobody gets zero." Therefore, again, participation in the Fund would be encouraged if potential participants can expect a minimum payment upon their demonstrating basic eligibility. This must apply to the injured as well as the survivors filing on behalf of a deceased victim.
Aside from those fundamental issues, there are many other aspects of the regulations that are of concern to potential participants. I have listed these below, and, with some additions (and with some overlap to the fundamental issues raised above); this constitutes a summary of the comments raised in the January 16 meeting.
1. Some have expressed concern that parents are not accorded any standing to collect under the Fund, despite having suffered at least as grievous a loss as surviving spouses or children. We agreed that some creativity might be required, but that a way might be found to include parents as "beneficiaries" under the Fund without at the same time reducing the amounts otherwise payable to the surviving spouse and children.
2. Some have expressed concern that the definition of "spouse", and the regulations generally, will prohibit same-sex partners and fiancés from collecting under the Fund. Again, some creativity may be required, but I am hopeful that you will find a way to craft the regulations to incorporate same-sex partners and fiancés who may have suffered exactly the same economic and non-economic losses as those now explicitly included under the Fund.
3. The injured are concerned that they may not be able to recover anything under the fund if they did not receive medical treatment within 24 hours of the incidents in question or within 24 hours of being rescued. I have already heard from one such survivor who was completely unable to get herself to a hospital and who only received medical treatment three days later, when her friends came from three states away, picked her up and took her back to a hospital there. Due to the chaos of the situation, it would seem appropriate to define "physical harm" without reference to the time period in which one received medical attention, but rather only with reference to whether or not one received the physical harm as a direct result of the September 11 attacks and their aftermath.
4. Some are concerned that the definition of "immediate aftermath", although extended under the interim final rule to 96 hours, does not in fact recognize the ongoing dangers and health hazards the rescue workers have been facing. I am hopeful that you will revise the regulations to appropriately address the ongoing risks rescue workers have faced in serving their nation and fellow citizens in the wake of these tragic events.
5. Some are concerned that, in the case of deceased claimants, the compensation from the Fund is payable to the estate of the deceased, rather than to the surviving claimant. In some cases, this will subject the compensation to schemes of distribution (in accordance with State-based estate laws) beyond that contemplated in the award. It will also tend to treat the injured (who receive the compensation themselves) differently under the Fund than the deceased, and will treat the deceased in one State differently under the Fund than the deceased in another State. It would seem to be more fair, and more orderly, to structure the regulations to make payments to the claimants under the fund directly, and to circumvent matters of differing State law to the greatest extent possible.
6. Some have expressed concern that the period used to establish one’s lost income potential (an average of the income earned over the years 1998, 1999 and 2000) is unfair because it is too old and because it does not incorporate factors such as an increasing growth curve in income. My understanding is that you were inclined to use the three-year period ending September 11, 2001, and that you were amenable to incorporating factors such as an increasing growth curve in income.
7. The Act states that collateral source compensation that "the claimant has received or is entitled to receive" will be deducted, and the Interim Final Rule does not appear to set time limits with respect to future entitlements. The question of what one "is entitled to receive" seems to be wide open and some are concerned that calculations with respect to collateral sources to which one is entitled in the future will be vague, confusing and potentially unfair and unreasonable. Perhaps it would be more fair if the regulations specify that collateral source amounts, in order to be deducted, must be amounts as to which the claimant has a fully vested interest at the time the final determination under the Fund is made.
8. Some are concerned about who will have the final word with respect to their claims. Although the Act specified that there would be no appeal from the final determination of the Special Master, it would appear to be fair that claimants be entitled to appeal to the Special Master if they feel that the determination made upon the record of their Hearing is unjustifiable. Therefore, I would request that the regulations require all hearings to be fully documented, and to allow a claimant to appeal a determination to the Special Master, who will review the decision with reference to the record of the hearing.
9. Some have requested that trial cases and determinations be made available to the public, so that potential filers can gauge how the process is working. It would be helpful if you would clarify whether and to what extent information about claims, hearings and awards will be available to the public.
10. Some understand that, although the Act requires one to waive the right to participate in any civil litigation for damages pertaining to the September 11 events, lawsuits against the Taliban are still permitted. It would be helpful if you would clarify what, if any, sorts of litigation claimants may still participate in if they participate in the Fund.
11. Your introduction to the Interim Final Rule states that "the Department and the Special Master anticipate that all awards from the fund will be free of federal taxation", and it then cites Section 104(a)(2) of the Internal Revenue Code. Because it appears to be your understanding, and the understanding of the Department of Justice, that the awards will be excludable from gross income under I.R.C. 104(a)(2), please incorporate a statement to that effect directly in the regulations.
12. Some are concerned that, despite being otherwise entitled, they will not be able to file a claim under the Fund without jeopardizing themselves from an immigration perspective. Perhaps the regulations could expressly state that information concerning immigration status that is included in any claim filed under the Fund not be disclosed to the Immigration and Naturalization Service.
13. Some are concerned that unborn children, which will require support once born and who will suffer the loss of not knowing their deceased parent, may not be considered "dependents." Please clarify this in the regulations.
Thank you again for coming to the 12th District of New Jersey. I appreciate your willingness to listen to the concerns of the very many people in this are affected by the events of September 11, and the time and effort you expended in explaining the regulations to them. You have my support in developing a compassionate and fair set of regulations by which to administer the Victims Compensation Fund.
Sincerely,
RUSH HOLT
Member of Congress
RH/mpm