W000646

Monday, November 26, 2001 4:14 PM
Crowell & Moring Comments on Proposed September 11 Victims Compensation Regulations

To: Kenneth L. Zwick, Director, Office of Management Programs

Dear Mr. Zwick: Attached are the comments of Crowell & Moring LLP on the September 11, 2001 Victims Compensation Fund Regulations. I will also fax you a copy of the attached document. If you have any questions, please feel free to contact us.

Sincerely,

Crowell & Moring LLP
Washington, D.C.

Attachment 1:
Comments of Crowell & Moring LLP on the
September 11, 2001 Victims Compensation Fund Regulations

I. Introduction

Crowell & Moring LLP ("Crowell & Moring") is a law firm based in Washington, D.C. with offices in Southern California, London, and Brussels. It has developed a unique expertise in representing victims of terrorism, particularly in cases where the acts of terrorism at issue were sponsored by a foreign state. The Firm's representations have included seeking and obtaining compensation for its clients through the judicial, legislative, and administrative processes of the United States. Among the Firm's clients are , , and , each of whom were held hostage for several years in Lebanon by the Iranian-backed terrorist group Hizbollah.

Crowell & Moring thanks the United States Department of Justice for the opportunity to share its insights on the September 11 Victims Compensation Fund regulations via these comments. Based on our expertise and experience in the matters discussed above and in other cases, Crowell & Moring believes that it possesses unique insight into some of the issues the Department needs to address. More information about the Firm's expertise in this area can be obtained at our website, We have set forth below the Firm's comments on three particular issues. Should the Department seek additional information and input, or have questions, it can contact directly one of the three partners at Crowell & Moring who have participated in drafting and preparing these comments:

The Firm's address is:

Crowell & Moring LLP
Washington, D.C.

II. Discussion

I. Who Should Be Compensated By the Fund?

Crowell & Moring submits that the regulations under consideration generally should look and adhere to principles of law and precedent that have developed over the past few years in the cases decided against state sponsored terrorism. These cases have been decided almost exclusively by judges on the United States District Court for the District of Columbia and have been decided within the framework of 28 U.S.C. §1605(a)(7), a 1996 amendment to the Foreign Sovereign Immunities Act. They are particularly relevant to the regulations the Department is drafting because each of the cases involved acts of terrorism that variously caused death, personal injury, and other compensable torts. Because the judges that have considered these cases have carefully analyzed and considered the many legal issues presented in such cases and because many of these opinions are published, they should provide a logical source for the Department of Justice, and later the Special Master, in determining both the appropriate coverage of the September 11 Victims Compensation Fund as well as the appropriate judgment amounts to be awarded. In essence, a federal common law has evolved with respect to coverage and judgments in cases of state sponsored terrorism.

The Department should first determine the class of persons covered by the September 11 Victims legislation. The legislation speaks only to compensation sought by the victim or his or her personal representative. This language, however, does not take specific account for how, if at all, immediate family members are to be treated or compensated in the recovery process. One disincentive to a victim family choosing the Special Master process versus a Court proceeding will exist if recoveries under the September 11 Fund fail to account for the loss to each immediate family member. This is because in a court proceeding each immediate family member generally can sue for the loss of the family member. If the September 11 Fund fails to consider the loss of each immediate family member, we believe it likely that the prospect of a larger recovery in Court will drive many cases to that forum, thus defeating the purpose of having the speedier, no-fault Special Master process.

The state sponsored terrorism cases have specifically dealt with the issue of which family members are eligible for judgment under 28 U.S.C. §1605(a)(7). Recently, the Court in Jenco v. Islamic Republic of Iran, 154 F. Supp. 2d 27, 36 (D.D.C. 2001), specifically defined the "immediate family" entitled to judgment for state sponsored acts of terrorism as comprising (1) spouses; (2) children; (3) parents; and (4) siblings. Other cases had implicitly adopted that formulation in earlier decisions and made awards not only to the victim or his estate, but also to family members in one or more of the above four categories. See e.g. Flatow v. Islamic Republic of Iran, 999 F. Supp. 1 (D.D.C. 1998)(award to victim's estate, her parents and siblings; Anderson v. Islamic Republic of Iran, 90 F. Supp. 2d 107 (D.D.C. 2000) (award to victim, spouse and child); Sutherland v. Islamic Republic of Iran, 151 F. Supp. 2d 27 (D.D.C. 2001) (award to victim, spouse and children); Elahi v. Islamic Republic of Iran, 124 F. Supp. 2d 97 (D.D.C. 2000)(award to victim's estate and his brothers); Daliberti v. Republic of Iraq, 146 F. Supp. 2d 19 (D.D.C. 2000)(award to victims and spouses).

Congress arguably has endorsed this definition of "immediate family" in those cases. In 2000, Congress enacted legislation that funded thirteen cases where anti-terrorism judgments had been obtained or were in the process of being obtained against Iran by drawing against a pool of frozen Iranian assets. See section 2002 of Public Law 106-386 (Victims of Trafficking and Violence Protection Act of 2000). At the time of that enactment Congress specifically authorized the payment of judgments to victims and immediate family members knowing full-well that then existing judgments against Iran covered by that legislation included payments to family members in one or more of the four categories discussed above. As one Court recently held, the fact that Congress enacted a compensation mechanism with court precedents already extant evinces tacit approval on the part of Congress to validate the methods and scope of those judgments. See Sutherland v. Islamic Republic of Iran, 151 F. Supp. 2d 27, 51 (D.D.C. 2001); Jenco v. Islamic Republic of Iran, 154 F. Supp. 2d 27, 37 (D.D.C. 2001).

We recommend, therefore, in light of the state sponsored terrorism cases, that compensation awards include amounts for immediate family members who have suffered a loss and that "immediate family" be defined as the Jenco and other cases have defined that term. The language in the September 11 Victims statute supports this result since it reposes in the Special Master the duty to base award decisions on "the harm to the claimant, the facts of the claim, and the individual circumstances of the claimant." Likewise, the fact that Congress effectively endorsed the "immediate family" concept of compensation in the 2000 legislation demonstrates that Congress had the same concepts in mind in seeking to compensate September 11 victims. In fairness and in fidelity to precedent, this broad language should be construed to cover compensation for victims and their immediate family members.

II. Define What Constitutes Filing.

One issue that appears to us to be of the utmost importance for the program to function fairly and efficiently is that the Department of Justice take care to define with particularity each and every step necessary to constitute the complete "filing" of a claim. This definition should specifically set forth details such as the forms and all supporting documentation necessary to constitute a proper filing. For example, is an official court document naming a person as the personal representative of a deceased victim a necessary perquisite for that representative to file a claim? If the Department contemplates that requirement it should take into consideration widespread reports about the significant delays being experienced by victim families in obtaining death certificates for the victims. In that regard, especially considering the Department's request for comments on how it should address the "personal representative" issue, we believe that whatever approach the Department takes, it should be an approach that is as flexible as possible for the victim families.

In any event, the regulations should also set forth in detail where the claim is to be filed, how the claim can be filed, the requisite number of copies, and all other items that will provide both the Special Master and the applicants with sufficient certainty as to what will constitute a proper filing.

III. What Amounts Should Be Awarded?

Following on our discussion in section I above, we submit that the Department should look to existing terrorism judgments in fashioning appropriate award amounts. Although the judgments vary in some instances given particularized case facts, such as whether the conduct of the terrorism was particularly inhumane, the judgments are generally consistent from case to case and have evolved into something of a grid. We believe that the Special Master should, in practice or otherwise, develop compensation awards that generally follow that grid. Variations of awards likely will hinge on individual circumstances and individualized lost income determinations. Otherwise, a grid system seems to be the only fair and consistent system to apply in compensating an event that generally affected so many victims in roughly the same way. As an aid to the Department, we include below charts of the state sponsored terrorism judgments categorized by five classes: (1) victim or estate; (2) spouses; (3) children; (4) parents; and (5) siblings. Case citations from which these judgments were obtained are also listed.

These Charts seek to illustrate the awards in state sponsored terrorism cases by status. They only address compensatory damage awards. The information is derived from: (1) Cicippio v. Islamic Republic of Iran, 18 F. Supp. 2d 62 (D.D.C. 1998)(Cicippio, Reed and Jacobsen families); (2) Anderson v. Islamic Republic of Iran, 90 F. Supp. 2d 107 (D.D.C. 2000); (3) Higgins v. Islamic Republic of Iran, C.A. No. 99-377-CKK (D.D.C. Sept. 21, 2000); (4) Flatow v. Islamic Republic of Iran, 999 F. Supp. 1 (D.D.C. 1998); (5) Eisenfeld v. Islamic Republic of Iran, 2000 U.S. Dist. LEXIS 9545 (D.D.C. July 11, 2000)(Eisenfeld and Duker families); (6) Elahi v. Islamic Republic of Iran, 124 F. Supp. 2d 97 (D.D.C. 2000); (7) Alejandre v. Republic of Cuba, 996 F. Supp. 1239 (S.D. Fla. 1997)(Alejandre, Costa and De la Pena families); (8) Daliberti v. Republic of Iraq, 146 F. Supp. 2d 19 (D.D.C. 2001) (Daliberti, Hall, Beaty and Barloon families); (9) Sutherland v. Islamic Republic of Iran, 151 F. Supp. 2d 27 (D.D.C. 2001); (10) Jenco v. Islamic Republic of Iran, 154 F. Supp. 2d 27 (D.D.C. 2001); (11) Polhill v. Islamic Republic of Iran, 2001 U.S. Dist. LEXIS 15322 (D.D.C. August 23, 2001); (12) Mousa v. Islamic Republic of Iran, Civil Action No. 00-2096-WBB (September 19, 2001); and (13) Wagner v. Islamic Republic of Iran, 2001 U.S. Dist. LEXIS 18424 (D.D.C. November 6, 2001).

CASE	STATUS	AWARD
Cicippio (Hostage held in Lebanon by Iran group)	Self	$20 million (1,908 days held hostage)
Reed (Hostage held in Lebanon by Iran group)	Self	$16 million (1,330 days held hostage)
Jacobsen (Hostage held in Lebanon by Iran group)	Self	$9 million (532 days held hostage)
Anderson (Hostage held in Lebanon by Iran group)	Self	$24.54 million (2,454 days held hostage)
Higgins (Hostage held, tortured & murdered in Lebanon by Iran group)	Estate	$31.43 million ($30 M pain/suffering; $1.43 M future income)
Flatow (US student killed in Israel by Iran funded suicide bomber)	Estate	$2.51 million ($1 M pain/ suffering; $1.51 M loss of accretion/funeral expense)
Eisenfeld (US student killed in Israel by Iran funded suicide bomber)	Estate	$2.42 million ($1 M pain/ suffering; $1.42 M loss of accretion/funeral expense)
Duker (US student killed in Israel by Iran funded suicide bomber)	Estate	$2.25 million ($1 M pain/ suffering; $1.25 M loss of accretion/funeral expense)
Elahi (US citizen Iranian dissident killed in Paris by Iran assassins)	Estate	$1.74 million ($1 M pain/ suffering; $740,000 loss of accretion/funeral expense)
Alejandre (Plane shot down by Cuba while rescuing escapees)	Estate	$1.53 million (loss of future income & household services)
Costa (Plane shot down by Cuba while rescuing escapees)	Estate	$5.13 million (loss of future income)
De la Pena (Plane shot down by Cuba while rescuing escapees)	Estate	$5.26 million (loss of future income)
Daliberti (Kidnapped by and held hostage in Iraq)	Self	$3.85 million ($2.59 M loss of income; $1.26 M for 126 days held hostage)
Hall (Kidnapped by and held hostage in Iraq)	Self	$1.8 million ($1.75 M loss of income; $50,000 for 5 days held hostage)
Beaty (Kidnapped by and held hostage in Iraq)	Self	$4.23 million ($2.18 M loss of income; $2.05 M for 205 days held hostage)
Barloon (Kidnapped by and held hostage in Iraq)	Self	$2.94 million ($1.68 M loss of income; $1.26 M for 126 days held hostage)
Sutherland (Hostage held in Lebanon by Iran group)	Self	$23.54 million (2,354 days held hostage)
Jenco (Hostage held in Lebanon by Iran group)	Estate	$5.64 million (564 days held hostage)
Polhill (Hostage held in Lebanon by Iran group)	Estate	$15 million (1,185 days held hostage)
Mousa (Serious injuries from 1996 bus bombing)	Self	$15 million (1,185 days held hostage)
Wagner (1984 Embassy Annex bombing in Beirut)	Estate	$3.28 million (wrongful death/future income)

Similarly, as the charts below reflect, plaintiffs related to the victim of state-sponsored terrorism have received awards based in large measure on the status or relationship of that person to the primary victim. Generally speaking, spouses received the largest awards, followed in decreasing amounts by children of the primary victim, then parents, and then siblings. The four "Daliberti spouses" (Daliberti, Hall, Beaty and Barloon) received awards of a degree different (and less) from the other hostage spouses cases due to the significantly shorter period their husbands were held hostage (between 5 and 205 days versus several years). No monetary compensation was awarded to family members beyond the relationships set forth below.

CASE	STATUS	AWARD
Higgins	Spouse	$12 million
Alejandre	Spouse	$8 million
Cicippio	Spouse	$10 million
Reed	Spouse	$10 million
Anderson	Spouse	$10 million
Daliberti	Spouse	$1.5 million
Hall	Spouse	$1.5 million
Beaty	Spouse	$1.5 million
Barloon	Spouse	$1.5 million
Sutherland	Spouse	$10 million
Polhill	Spouse	$10 million

CASE	STATUS	AWARD
Higgins	Daughter	$12 million
Alejandre	Daughter	$8 million
Anderson	Daughter	$6.7 million
Sutherland	Daughters	$6.5 million to each of 3
Polhill	Sons	$3.25 million to each of 2

CASE	STATUS	AWARD
Flatow	Father/Mother	$5 million to each
Eisenfeld	Father/Mother	$5 million to each
Duker	Mother	$5 million
Costa (Alejandre)	Father/Mother	$5.5 million to each
De la Pena (Alejandre)	Father/Mother	$5.5 million to each
Wagner	Father	$5 million
Wagner	Mother	$3 million to estate

CASE	STATUS	AWARD
Flatow	Siblings	$2.5 million to each of 4
Eisenfeld	Sister	$2.5 million
Duker	Sisters	$2.5 million to each of 2
Elahi	Brothers	$5 million to each of 2
Jenco	Siblings	$1.5 million to each of 6
Wagner	Siblings	$2.5 million to each of 2

Conclusion We hope these comments have been useful in assisting the Department in its establishment of the victims compensation program pursuant to the Special Master procedures established by Congress. If we can be of further assistance please feel free to contact one of the attorneys previously listed.
November 26, 2001
Comments by Crowell & Moring LLP Washington, DC

Previous		Next		Back to Comments by Date		Back to Comments by Date
				(Graphical Version)		(Text Only Version)