[Federal Register: December 21, 2001 (Volume 66, Number 246)]
[Rules and Regulations]
[Page 66273-66291]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21de01-16]
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Part IX
Department of Justice
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Office of the Attorney General
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28 CFR Part 104
September 11th Victim Compensation Fund of 2001; Interim Final Rule
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DEPARTMENT OF JUSTICE
Office of the Attorney General
28 CFR Part 104
[CIV 104P; AG Order No. 2541-2001]
RIN 1105-AA79
September 11th Victim Compensation Fund of 2001
ACTION: Interim final rule with request for comments.
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SUMMARY: Shortly after the September 11, 2001 terrorist attacks, the
President signed the ``September 11 Victim Compensation Fund of 2001''
(the ``Fund'') into law as Title IV of Public Law 107-42 (``Air
Transportation Safety and System Stabilization Act'') (the ``Act'').
The Act authorizes compensation to any individual (or the personal
representative of a deceased individual) who was physically injured or
killed as a result of the terrorist-related aircraft crashes on that
day. The Act provides that the Fund will be administered by a Special
Master appointed by the Attorney General. On November 26, 2001, the
Attorney General appointed Kenneth R. Feinberg as Special Master.
The Department of Justice, in consultation with the Special Master,
is issuing certain procedural rules so the Special Master may commence
operations of the program as soon as practicable. In order to allow the
Special Master to begin distributing funds, the Department is issuing
this rule as an ``Interim Final Rule'' that will have the force and
effect of law immediately upon publication. This rule is designated
``interim,'' however, because the Department is also seeking further
comment for a period of 30 days as part of its further review and may
expand or adjust aspects of the rule after receiving additional
comments.
DATES: This interim rule takes effect on December 21, 2001. Comments in
response to this notice are due by January 22, 2002.
ADDRESSES: Comments on the interim rule should be submitted by e-mail
to: victimcomp.comments@usdoj.gov , or by telefax to 301-519-
5956. Telefaxes should be limited to 15 pages. Comments may also be
mailed to Kenneth L. Zwick, Director, Office of Management Programs,
Civil Division, U.S. Department of Justice, Main Building, Room 3140,
950 Pennsylvania Avenue NW, Washington, DC 20530. However, the
Department encourages commenters to submit their comments by e-mail or
telefax. Comments received are public records. The name and address of
the commenter should be included with all submissions. The comments
will be made available on the Victim Compensation Fund Web site,
www.usdoj.gov/victimcompensation. Comments will also be available for
public inspection at a reading room in Washington, DC. Arrangements to
visit the reading room must be made in advance by calling 888-714-3385
(TDD: 888-560-0844).
FOR FURTHER INFORMATION CONTACT: Kenneth L. Zwick, Director, Office of
Management Programs, Civil Division, U.S. Department of Justice, Main
Building, Room 3140, 950 Pennsylvania Avenue NW, Washington, DC 20530,
telephone 888-714-3385 (TDD 888-560-0844).
SUPPLEMENTARY INFORMATION:
Statement by the Special Master
The September 11th Victim Compensation Fund of 2001 is an
unprecedented expression of compassion on the part of the American
people to the victims and their families devastated by the horror and
tragedy of September 11. The Act itself (specifically Title IV--Victim
Compensation), and the attached regulations drafted and implemented
pursuant to the Act, are designed to bring some measure of financial
relief to those most devastated by the events of September 11. In one
important sense, the Fund symbolizes the commitment of the American
people to those most in need. It is an example of how Americans rally
around the less fortunate.
The attached regulations have two objectives: (1) To provide fair,
predictable and consistent compensation to the victims of September 11
and their families throughout the life of the program; and (2) to do so
in an expedited, efficient manner without unnecessary bureaucracy and
needless demands on the victims. The regulations highlight a fast track
administrative compensation program, eliminating the red tape, time and
expense of a traditional lawsuit. Quick payment to eligible claimants
characterizes this program.
The Fund offers the eligible claimant an alternative to litigation.
To succeed in the courtroom, a victim of the September 11 tragedy, or
his or her representative, would be compelled to litigate, probably for
many years at excessive cost, and with all the uncertainty of result
which is part of the litigation process. Among the hazards of such a
court proceeding are: Would liability be demonstrated? Against whom?
Would sufficient funds be available to pay in full any resulting tort
award? Would the verdict, even if favorable, withstand appellate
challenge?
Trade-offs are required in developing Fund procedures that are
different than those in the more conventional lawsuit. It is possible
to develop an alternative administrative scheme, providing speedy and
efficient compensation, which will help bring some closure to the
events of September 11. We should not require its victims to revisit
the tragic events of September 11 over and over again during the
pendency of a lawsuit in our courts.
In formulating the regulations, we heeded the instruction of the
Attorney General to help the neediest of victims as quickly as
possible. Accordingly, under these regulations, an eligible claimant
can receive an immediate advance payment of $50,000 in cases involving
death, or $25,000 in certain cases involving serious physical injury.
These payments are downpayments only, advanced to provide immediate
financial assistance to those in need.
We were required, of course, to adhere to the language which
Congress set out in the statute, including the provisions requiring
that awards be offset by all collateral source compensation such as
benefits from life insurance and other government programs. However, we
did find ambiguity in the statute as to gifts provided to victims and
their families by private charities. These regulations do not require
that awards be offset by such private charitable assistance.
We have concluded that the purpose of the Act is not simply to
examine economic and noneconomic harm, but also to provide compensation
that is just and appropriate in light of claimants' individual
circumstances. We have concluded that any methodology that does nothing
more than attempt to replicate a theoretically possible future income
stream would lead to awards that would be insufficient relative to the
needs of some victims' families, and excessive relative to the needs of
others. The statute specifies that individual circumstances beyond
economic and noneconomic harm should be taken into account. It is our
view that, absent extraordinary circumstances, awards in excess of $3
million, tax-free, will rarely be appropriate in light of individual
needs and resources. At the same time, we want to ensure that victims'
families are receiving at least a minimum level of resources to help
meet their needs and rebuild their lives. Thus, we have concluded that
the families of deceased victims should receive a combined total
[[Page 66275]]
of at least $500,000 from this program, other state and Federal
programs, life insurance policies and other sources of compensation.
Similarly, the baseline for single decedents should be $300,000. This
ensures that every needy claimant's total compensation from this
program and other sources will be at least equal to these threshold
amounts.
In sum, the September 11th Victim Compensation Fund of 2001 is an
attempt by the American people to demonstrate their solidarity with,
and generosity for, those injured by the terrible September 11 attack
on our country. It provides an alternative compensation scheme to the
traditional tort system, a method of providing substantial and quick
compensation to those who elect to participate.
Neither this Fund nor any monetary compensation can possibly
provide a full measure of relief to those who have suffered as a result
of September 11. But the Fund will provide appropriate compensation and
some measure of comfort to those whose lives have been torn asunder by
the events of September 11.
Background
The following discussion provides background information and
explanation of the regulations promulgated herein. Section A describes
the statutory backdrop for the regulations; Section B discusses the
Department's rulemaking procedures to date; Section C addresses
Eligibility; Section D pertains to Advance Benefits; Section E
discusses Final Awards made by the Fund; Section F describes the
Special Master's claims evaluation process; and Section G relates to
Assistance to Claimants. The text of the regulations is set forth
following these explanatory sections. A catalog of public commentary is
set forth thereafter as an Appendix. More detailed information
regarding the program, including a flow chart of applicable procedures
and a table of estimated or ``presumed'' awards, will be available on
the Victims Compensation Fund Web site at www.usdoj.gov/
victimcompensation.
A. The Statute
The President signed the ``September 11th Victim Compensation Fund
of 2001'' (the ``Fund'') into law on September 22, 2001, as Title IV of
Public Law 107-42 (``Air Transportation Safety and System Stabilization
Act'') (``the Act''). The purpose of this Fund is to provide
compensation to eligible individuals who were physically injured as a
result of the terrorist-related aircraft crashes of September 11, 2001,
and compensation through a ``personal representative'' for those who
died as a result of the crashes. Generally, eligibility is limited to:
(1) Individuals on the planes at the time of the crashes (other than
the terrorists); and (2) individuals present at the World Trade Center,
the Pentagon or the site of the crash in Pennsylvania at the time of
the crashes or in the immediate aftermath of the crashes.
The Fund is designed to provide a no-fault alternative to tort
litigation for individuals who were physically injured or killed as a
result of the aircraft hijackings and crashes on September 11, 2001.
Others who may have suffered losses as a result of those events (e.g.,
those without identifiable physical injuries but who lost employment)
are not included in this special program. Indeed, compensation will be
provided only for losses caused on account of personal physical
injuries or death, even though the victims may have suffered other
losses, such as property loss. For this reason, the Department and the
Special Master anticipate that all awards from the Fund will be free of
federal taxation. See I.R.C. Sec. 104(a)(2) (stating that damages
received ``on account of personal physical injuries or physical
sickness'' are excludable from gross income for purposes of federal
income taxation).
A claimant who files for compensation waives any right to file a
civil action (or to be a party to an action) in any federal or state
court for damages sustained as a result of the terrorist-related
aircraft crashes of September 11, 2001, except for actions to recover
collateral source obligations.
Determinations on eligibility and the amount of compensation are to
be made by the Special Master. After determining whether an individual
is an eligible claimant under the Act, the Special Master is to
determine the amount of compensation to be awarded based upon the harm
to the claimant, the facts of the claim, and the individual
circumstances of the claimant.
The law also provides that the Special Master is to make a final
determination on any claim within 120 days from when the claim was
filed and, if an award is made, to authorize payment within 20 days
thereafter. The determinations of the Special Master are final and are
not reviewable by any court. Claims with the Fund must be filed on or
before two years after the effective date of these regulations, i.e.
December 22, 2003. Payments from the Fund are made by the United States
Government, which in turn obtains the right of subrogation to each
award.
Pursuant to the Act, regulations addressing certain administrative
matters must be issued within 90 days of enactment. Section 407 of the
Act provides that the Department, in consultation with the Special
Master, promulgate regulations on four matters by December 21, 2001:
(1) Forms to be used in submitting claims;
(2) The information to be included in such forms;
(3) Procedures for hearing and the presentation of evidence; and
(4) Procedures to assist an individual in filing and pursuing
claims under this title.
In addition, section 407 authorizes, but does not require, the
Department to issue additional rules to implement the program. This
Interim Final Rule addresses issues beyond the four specifically
required by the Act in order to create a program that will be
efficient, will treat similarly situated claimants alike, and will
allow potential claimants to make informed decisions regarding whether
to file claims with the Fund. Nonetheless, the Department recognizes
that it cannot anticipate all of the issues that will arise over the
course of the program and that there will inevitably be many difficult
issues that the Special Master will have to resolve in the course of
making determinations on individual claims.
B. Rulemaking History to Date
On November 5, 2001, the Department requested public input on a
number of issues. 66 FR 55901. The Department noted that, at that time,
the Special Master had not yet been appointed, but that it wanted as
much public comment as feasible before issuing the regulations by
December 21, 2001. On November 26, 2001, the Attorney General appointed
Kenneth R. Feinberg as Special Master. As called for by the Act, this
interim final rule is promulgated in consultation with the Special
Master.
The Department received more than 800 comments in response to the
Department's Notice of Inquiry. Some were very brief and only spoke to
a single issue; others responded to the Department's questions on a
point by point basis. Still others contained detailed analyses,
recommendations and even proposed regulatory language.
The range of commenters was very broad. Some commenters identified
themselves as citizens, taxpayers or law professors, and many
identified themselves as individuals who had contributed to charities
for those impacted by the terrorist crashes. Many other commenters
identified themselves as members of victims' families, partners or
close friends, including some from organizations and groups of
[[Page 66276]]
survivors. Several commenters identified themselves as employers who
lost a significant number of employees in the crashes. A number of
commenters identified themselves as residents of housing near ``Ground
Zero'' in New York.
In addition, the Department received comments from many
organizations including the American Insurance Association, the
American Arbitration Association, the American Bar Association, Trial
Lawyers Care, New York Trial Lawyers' Association, New York City Bar
Association, Massachusetts Bar Association, National Center for Victims
of Crime, National Association of Crime Victim Compensation Boards, the
Oklahoma Crime Victim Compensation Board, Consumers Union, Public
Citizen, the National Right To Life Committee, the Lamda Legal Defense
& Education Fund, the American Civil Liberties Union, the Association
of Flight Attendants, the Council on Foundations, the Nonprofit
Coordinating Committee of New York, Independent Sector, the Alternative
Dispute Resolution of the Federal Bar Association, the Alliance of
Fiduciary Consultants, and the Foreign Claims Settlement Commission.
Individual members of Congress, groups of members, and members of
the Senate leadership also provided comments. Further, joint comments
were submitted on behalf of the New York City Mayor, the New York
Governor, and the New York Attorney General, by members of the New York
Assembly, and by the Attorney General of Connecticut.
Comments were also submitted by United Airlines and American
Airlines, and from various individuals and companies who identified
themselves as having expertise or experience in the administration of
claims programs.
The Department has read every submission it received in response to
this notice, from handwritten notes to scholarly discussions. The
Department wants to express its appreciation for the time and careful
thought reflected in those submissions.
While the Department has reviewed every submission it received, it
will not regulate on every topic addressed in those comments. Over 70
separate topics were identified; almost two dozen full size notebooks
are necessary to organize all of the comments by topic. All of the
comments will be retained by the Department for subsequent
consideration when it reviews comments on this interim final rule, and
the comments will remain posted on the Department's web site where they
may be reviewed by the public. The Department was pleased to see that
some comments responded to others placed on the web site, and hopes
this facility will continue to be of interest to the public.
It is not feasible to repeat here all of the suggestions received
in the comments, let alone directly respond to each. The Appendix to
this interim final rulemaking highlights some of the points raised by
commenters in order to indicate the range of views received on how
various issues should be approached.
C. Eligibility
Section 405(b) of the Act requires the Special Master to determine
whether a claimant is an ``eligible individual'' under section 405(c).
``Eligibility,'' in turn, is defined by the Act to include: (1)
individuals (other than the terrorists) aboard American Airlines
flights 11 and 77 and United Airlines flights 93 and 175; (2)
individuals who were ``present at'' the World Trade Center, the
Pentagon, or the site of the aircraft crash at Shanksville,
Pennsylvania at the time or in the immediate aftermath of the crashes;
or (3) personal representatives of deceased individuals who would
otherwise be eligible. Moreover, to be eligible for an award, an
individual must have suffered physical harm or death as a result of one
of the terrorist-related air crashes. This interim final rule addresses
eligibility by defining the terms ``present at the site,'' ``immediate
aftermath,'' ``physical harm,'' and ``personal representative.''
``Present at the site'': This rule defines the term ``present at
the site'' (i.e. the World Trade Center, Pentagon, or Shanksville site)
to mean physically present at the time of the crashes or immediate
aftermath:
(1) In the buildings or portions of buildings that were destroyed
as a result of the airplane crashes; or
(2) In any area contiguous to the crash sites that the Special
Master determines was sufficiently close to the site that there was a
demonstrable risk of physical harm resulting from the impact of the
aircraft or any subsequent fire, explosions, or collapse of buildings
(generally, the immediate area in which the impact occurred, fire
occurred, portions of buildings fell, or debris fell upon and injured
persons).
There are several reasons for this geographic limitation. First,
this geographic limitation comports with the plain meaning of the
statutory term ``present at.'' Second, this geographic limitation is
consistent with the further statutory requirement of physical injury or
death, because the zone designated is that in which there was a
demonstrable risk of physical harm from falling debris, explosions, or
fire.
``Immediate aftermath'': This rule defines the term ``immediate
aftermath'' of the crashes to mean, for purposes of all claimants other
than rescue workers, the period of time from the crashes until 12 hours
after the crashes. This time frame appears to cover all of those who
suffered physical injury or death, with the exception of rescue
workers.
With respect to rescue workers who assisted in efforts to search
for and recover victims, the regulations define ``the immediate
aftermath'' to include the period from the crashes until 96 hours after
the crashes. The regulations provide for this longer time period for
rescue workers in recognition of their heroic efforts and their
selfless reasons for being at the sites, and responds to a request by
the Mayor of New York City that the program recognize the high level of
danger and difficulty during the first four days of rescue operations.
``Physical harm'': This rule defines the term ``physical harm'' to
mean an objectively verifiable physical injury that was treated by a
medical professional within 24 hours of the injury having been
sustained or within 24 hours of rescue and either required
hospitalization as an in-patient for at least 24 hours or caused,
either temporarily or permanently, partial or total physical
disability, incapacity, or disfigurement.
There are several reasons for this definition. The statutory term
``physical harm'' indicates that Congress did not intend for this Fund
to compensate those who suffered only emotional harm or property
damage. The statutory term ``physical harm'' also indicates that
Congress did not intend for this Fund to cover those who face only a
risk of future injury (i.e. latent harm that does not fully manifest
itself within the statutory time period for this Fund). Indeed, because
participation in this Fund precludes claimants from recovering through
tort litigation, those with latent injuries that later became manifest
would likely be undercompensated if they sought compensation now from
the Fund before the injuries became manifest. Conversely, those who
recovered for latent injuries that did not later become manifest could
be overcompensated if they recovered from the Fund. While Congress
might later consider whether an administrative program for latent harm
caused by the September 11, 2001 terrorist-related aircraft crashes may
be appropriate, the language of the statute that created this Fund does
not contemplate awards for that purpose.
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``Personal Representative'': Section 405(c)(2)(C) provides that in
the case of an individual who is deceased but who otherwise meets the
other criteria for eligibility, a claim can be filed by the Personal
Representative of the decedent. Section 405(c)(3)(A) provides that no
more than one claim may be submitted by an individual or on behalf of a
deceased individual.
In many or most cases, the identity of the ``Personal
Representative'' will not be in dispute. Where there are disputes, two
issues arise: (1) What are the rules for determining who is the
Personal Representative?; and (2) who should apply the rules and
resolve the dispute?
As to the first issue, the regulations rely on state law. Subject
to certain contingencies, this rule defines the term ``Personal
Representative'' to mean an individual appointed by a court of
competent jurisdiction as the Personal Representative of the decedent
or as the executor or administrator of the decedent's will or estate.
In the event that no Personal Representative or executor or
administrator has been appointed by any court of competent
jurisdiction, and such issue is not the subject of pending litigation
or other dispute, the Special Master may, in his discretion, determine
that the Personal Representative is the person named by the decedent in
the decedent's will as the executor or administrator. In the event no
will exists, the Special Master may, in his discretion, determine that
the Personal Representative is the first person in the line of
succession established by the laws of the state of the decedent's
domicile governing intestacy.
Reliance on state law is necessary in part because those who file
for recovery under the Fund waive their rights to recover through
litigation, in which state law would determine the identity of the
appropriate representatives of the decedent, or the decedent's estate,
to bring suit. Thus, if the identity of Personal Representatives for
purposes of this Fund were determined by federal regulation, there
could be many situations in which the representative as defined by
state law would choose litigation while the Personal Representative as
defined by federal regulation would seek to recover from the Fund.
The second issue raises questions of program administration.
Disputes between relatives, former spouses and other interested parties
can be exceptionally fact-intensive and time-consuming. Indeed, state
courts often spend considerable time and resources resolving such
matters. The Special Master cannot accomplish his statutory duties if
bogged down with these types of complex disputes. Nor would it be
advisable for the Special Master to attempt to step in and supplant
state court practice or the testamentary intent of decedents.
Consequently, the rule provides that the Special Master has no
obligation to arbitrate, litigate or otherwise resolve disputes as to
the identity of the Personal Representative. Instead, to ensure that
funds are not needlessly tied up due to disputes regarding the identity
of the Personal Representative, the regulations provide that the
disputing parties may agree in writing to the identity of a Personal
Representative to act on their behalf, who may seek and accept payment
from the Fund while those disputing parties work to settle their
dispute. In appropriate cases, the Special Master may determine an
award, but place the payment in escrow until the dispute regarding the
Personal Representative is finally resolved.
Finally, the determination of the Personal Representative is not
the same question as the determination of who ultimately will receive
the award. In that regard, this rule provides that the Personal
Representative shall distribute the award in a manner consistent with
the law of the decedent's domicile or any applicable rulings made by a
court of competent jurisdiction. However, in order to assure that the
families of needy victims receive adequate compensation, the
regulations further provide that the Personal Representative shall,
before payment is authorized, provide to the Special Master a plan for
distribution of any award received from the Fund. Notwithstanding any
other provision of these regulations or any other provision of state
law, in the event that the Special Master concludes that the Personal
Representative's plan for distribution does not appropriately
compensate the victim's spouse, children, or other relatives, the
Special Master may direct the personal representative to distribute all
or part of the award be distributed to such spouse, children, or other
relatives.
D. Advance Benefits
In order to comply with the Attorney General's November 26, 2001
instructions to the Special Master to pay benefits to eligible
claimants as quickly as possible, these regulations permit claimants to
seek immediate ``Advance Benefits'' in the fixed amount of $50,000 in
the case of deceased individuals and $25,000 in the case of severely
injured individuals who required hospitalization for one week or more.
To qualify for advance benefits, applicants must complete a short
form (the ``Eligibility Form'') identifying basic eligibility and
indicating that advance benefits would assist them in confronting
current or immediate financial hardships. Such forms will be made
available at claims intake centers as they are established, in response
to telephone requests (888-714-3385, 202-305-1352, TDD: 888-560-0844),
and on the Victims Compensation Fund Web site at www.usdoj.gov/
victimcompensation.
Eligible claimants may apply for and receive advance benefits and
then file their lengthier ``Personal Injury Compensation Form'' or
``Death Compensation Form'' at any time within the two-year time frame
for filing claims under the program. This will allow needy eligible
claimants to obtain prompt advance payments even though they may need
more time to collect full information regarding the amount of
compensation they seek. The 120-day period for determination of
compensation will be stayed or tolled until the claimant files the
completed ``Personal Injury Compensation Form'' or ``Death Compensation
Form'' needed to allow the Special Master to determine the amount of
the final award. However, once a claimant applies for Advance Benefits,
the claimant will be deemed to have waived the right to file a civil
action in state or federal court for damages sustained as a result of
the September 11 attacks.
Advance benefits will be treated as advance payments on ultimate
awards from the Fund. Thus, the amount of any advance benefits received
will be deducted from the claimant's subsequent award.
E. Final Awards Made by the Fund
Section 405(b) of the Act provides that the Special Master shall
compensate eligible claimants based on the harm to the claimant
(including both economic loss and noneconomic losses), the facts of the
claim, and the individual circumstances of the claimant. The Act
further provides that the Special Master shall determine the claimant's
eligibility and the amount of compensation within 120 days.
The Special Master and the Department have studied the language of
the Act, the varying public comments, evidence and data about the many
victims of the September 11 attacks, and economic and demographic
studies and data in fashioning the interim final rule. After this
careful consideration, the Special Master and the Department have
concluded that the following principal objectives should guide any
determination of economic and noneconomic losses.
[[Page 66278]]
The first objective is that the process should be efficient,
straightforward, and understandable to the claimants. This objective is
based in part upon the statutory requirement that the Special Master
review each claim and make an award determination within 120 days of
filing. More important, however, is that claimants be able to enter the
program--or choose not to enter the program--with an understanding of
how their claims will be treated. This is especially important because
the Act provides that, upon submission of a claim, a claimant waives
the right to file a civil action for damages sustained as a result of
the September 11 attacks. For claimants to make an informed decision
regarding this waiver, they should have some understanding of how their
award will be calculated and how much they would receive from the Fund
should they decide to file a claim.
The second objective is that each claimant should, to the greatest
extent possible, be treated fairly based on the claimant's own
individual circumstances and relative to other claimants. While the
circumstances of death for many victims will differ, those
circumstances will in many cases be unknowable. In principle, similarly
situated claimants should not receive dramatically differing treatment.
After careful consideration, the Special Master and the Department
have concluded that, in order best to achieve these principal
objectives, the Special Master should develop a methodology for
calculating presumed economic and noneconomic losses that is based on
readily identifiable individual circumstances for each claimant, such
as age, prior income levels, marital status, and the number and ages of
the victim's dependents. A methodology for determining presumed
economic and noneconomic losses will also assist the Special Master in
making fair and appropriate compensation determinations swiftly and
efficiently within the time frame permitted by the Act.
In order to enable claimants to make informed decisions regarding
whether to submit a claim under the Fund and, if so, whether to submit
evidence of extraordinary individual circumstances that could justify
departure from the presumed awards, the interim final rule directs the
Special Master to publish schedules, tables, or charts of presumed
determinations for economic and noneconomic losses. While these
schedules, tables, or charts cannot cover every possible claimant
(e.g., injured claimants), they are extensive and detailed enough to
provide the majority of potential claimants with a general dollar range
into which their awards may fall.
Nonetheless, the Special Master and the Department recognize that
it will be impossible to fashion a presumptive methodology that will
take into account all of the individual facts and circumstances for
every claimant. Rather, some claimants may have extraordinary
individual circumstances that justify departure from the presumed
awards. Thus, the interim final rule provides that claimants may
request that the Special Master depart from the presumed economic and
noneconomic losses based upon a demonstration of extraordinary
circumstances that the presumed award methodology does not adequately
address.
Economic loss: Determination of economic loss requires a prediction
about each claimant's future. This assessment will be, by its nature,
somewhat speculative. While the determination of economic loss should
be based upon facts regarding the individual victim where those facts
are available, some facts cannot be predicted on an individualized
basis.
The regulations also provide that the Special Master's schedules,
tables, or charts should identify presumed determinations of economic
loss up to a salary level commensurate with the 98th percentile of
individual income in the United States. The Department recognizes that
projecting earnings over worklife for people with extraordinary annual
incomes is a very complex exercise, often requiring a detailed
evaluation of variable and often complex formulae for nonvariable
income, differing work life expectations, often highly volatile
industries or markets, and other factors that are not often subject to
easy generalization. We have also concluded that the purpose of the Act
is not simply to examine economic and noneconomic harm, but also to
provide compensation that is just and appropriate in light of the
financial needs and resources of claimants. Any methodology that does
nothing more than attempt to replicate a theoretically possible future
income stream would lead to awards that would be insufficient relative
to the needs of some victims' families, and excessive relative to the
needs of others. Therefore, a claimant should not assume that he or she
will receive an award greater than the presumed award simply because
the victim had an income that exceeded the income for the 98th
percentile. Indeed, the Act's requirement that the Special Master
consider ``the individual circumstances of the claimant'' indicates
that the Special Master may consider a particular claimant's financial
needs and resources, just as the Department and the Special Master
considered the needs of the claimants in concluding that no claimant
bringing a claim on behalf of a deceased victim should receive less
than $500,000 or $300,000 before collateral source offsets.
If a claimant seeks review of a presumed award, the Special Master
may consider a range of information, including demographic information
on retirement trends for high wage earners, the individual's historical
expenses, savings, and any other factors he deems relevant, including
economic trends, information available from the Bureau of Labor
Statistics, the Census Bureau and other entities on average income and
retirement age for the victim's profession or even for the victim's
former employer. Claimants should not expect awards grossly in excess
of the highest awards listed on the Special Master's presumed award
chart, as the individual circumstances of the wealthiest and highest-
income claimants will often indicate that multi-million dollar awards
out of the public coffers are not necessary to provide them with a
strong economic foundation from which to rebuild their lives.
The Special Master and the Department recognize that the extent of
physical injury for those victims who survived the September 11 attacks
may vary to a degree that does not lend itself to a schedule, table, or
chart. If the claimant's injury causes only a temporary disability, the
Special Master may consider evidence regarding the length of time the
claimant was absent from his employment in determining the appropriate
compensation for economic loss. For those victims who suffered
permanent physical disability, the Special Master may rely upon his
economic loss methodology, but adjust the award based upon the extent
of the physical disability. In evaluating claims of disability, the
Special Master will, in general, make a determination regarding whether
the claimant is capable of performing his or her usual profession in
light of the injuries.
With respect to claims of total permanent disability, the Special
Master may accept a determination of disability made by the Social
Security Administration as evidence of disability without any further
medical evidence or review. The Special Master may also consider
determinations of permanent total disability made by other governmental
agencies or private insurers in evaluating the claim. The Special
Master may require an evaluation of the claimant's disability and
ability to perform his or her occupation from medical experts.
[[Page 66279]]
With respect to claims of partial disability, the Special Master
may consider evidence of the effect of the partial disability on the
claimant's ability to perform his or her usual occupation as well as
the effect of the partial disability on the claimant's ability to
participate in usual daily activities.
Noneconomic losses: Each person who was killed or injured in the
September 11 attacks suffered grievous harm, and each person
experienced the unspeakable events of that day in a unique way. Some
victims experienced terror for many minutes, as they were held hostage
by terrorists on an airplane or trapped in a burning building. Some
victims had no warning of what was coming and died within seconds of a
plane hitting the building in which they worked. While these
circumstances may be knowable in a few extraordinary circumstances, for
the vast majority of victims these circumstances are unknowable.
After extensive fact finding, public outreach, and review of public
comments, the Special Master and the Department have concluded that the
most rational and just way to approach the imponderable task of placing
a dollar amount upon the pain, emotional suffering, loss of enjoyment
of life, and mental anguish suffered by the thousands of victims of the
September 11 attacks is to assess the noneconomic losses for categories
of claimants. The most obvious distinction is between those who died
and those who suffered physical injury but survived.
The regulations therefore set a presumed award for noneconomic
losses sustained. For those victims who died as a result of the
September 11 aircraft crashes, the presumed noneconomic losses will be
$250,000, plus an additional $50,000 for the spouse and each dependent
of the deceased victim. That $250,000 figure is roughly equivalent to
the amounts received under existing federal programs by public safety
officers who are killed while on duty, or members of our military who
are killed in the line of duty while serving our nation. See 38 U.S.C.
1967 (military personnel); 42 U.S.C. 3796 (Public Safety Officers
Benefit Program). The latter figures--$50,000 for the spouse and each
dependent--include a noneconomic component of ``replacement services
loss.''
For those victims who suffered physical injury but survived the
September 11 attacks, the Special Master may establish a methodology
for estimating their noneconomic losses. The Special Master may
determine that it is appropriate to give some percentage of the
noneconomic loss award given for victims who died, based upon the
extent of the injury.
The Special Master and the Department recognize, however, that no
presumed award can take into account all of the unique individual
circumstances of each claimant. Accordingly, as noted above, claimants
may either accept the presumed award or instead attempt to demonstrate
in a hearing before the Special Master extraordinary circumstances that
justify departure from the presumed award.
Collateral Sources: Section 405(b)(6) of the Act provides that the
Special Master shall reduce the amount of compensation by the amount of
the collateral source compensation ``a claimant has received or is
entitled to receive'' as a result of the terrorist-related aircraft
crashes of September 11, 2001. The interim final rule provides that
collateral sources will include life insurance, pension funds, death
benefit programs, and payments by federal, state, or local governments
related to the terrorist-related aircraft crashes of September 11,
2001. While many public commenters voiced strong opposition to the
inclusion of some or all of these as collateral source compensation,
the Act expressly includes each one within the definition of
``collateral sources.''
At the same time, the Act does not address whether certain other
types of payments constitute collateral source compensation. The
interim final rule provides that the following are not collateral
source compensation:
(1) The value of services or in-kind charitable gifts such as
provision of emergency housing, food, or clothing; and
(2) Charitable donations distributed to the beneficiaries of the
decedent, to the injured claimant, or to the beneficiaries of the
injured claimant by private charitable entities; provided, however,
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 as described above.
The Department has concluded that charitable contributions should
not be considered collateral source compensation within the meaning of
the Act because, among other reasons, such charitable contributions are
different in kind from the collateral sources listed in the Act.
Moreover, because the collateral offset only applies to collateral
source compensation that the claimant has received or is entitled to
receive, deducting charitable awards from the amount of compensation
would have the perverse effect of encouraging potential donors to
withhold their giving until after claimants have received their awards
from the Fund.
F. The Claims Evaluation Process
Section 405(b)(4) of the Act provides that a claimant, after the
filing of the claim, has the right to present evidence to the Office of
the Special Master. The statute specifically provides that the claimant
has the right to present witness statements and documents, the right to
obtain legal counsel, and such other due process rights as are
determined to be appropriate by the Special Master.
The interim final regulations provide claimants with a choice of
two Procedural Options--Track A or Track B. If a claimant selects Track
A, the Claims Evaluator will determine eligibility and the claimant's
presumed award and, within 45 days of the date the claim was deemed
filed, notify the claimant in writing of the eligibility determination,
the amount of the presumed award, and the right to request a hearing
before the Special Master or his designee under Sec. 104.33 of these
regulations. After an eligible claimant has been notified of the
presumed award, the claimant may either accept the presumed
compensation determination as the final determination and request
payment, or may instead request a review before the Special Master or
his designee pursuant to Sec. 104.33. If a claimant opts for a review,
the claimant may make supplemental submissions. The Special Master may
alter or modify the award if the presumed award was calculated
erroneously, or if the claimant demonstrates extraordinary
circumstances indicating that the presumed award does not adequately
address the claimant's injury. There will be no further review or
appeal from this determination.
If the claimant selects Track B, a Claims Evaluator will determine
eligibility within 45 days of the date the claim was deemed filed, but
shall not determine the claimant's presumed award. The Claims Evaluator
will then notify the claimant in writing of the eligibility
determination. Upon notification of eligibility, the claimant will
proceed to a hearing pursuant to Sec. 104.33. At such hearing, the
Special Master or his designee will utilize the presumed award
methodology, but may modify or vary the award if the claimant presents
extraordinary circumstances not adequately addressed by the presumed
award methodology. There shall be no review or appeal from this
determination.
[[Page 66280]]
Hearings, when sought, will be held by the Special Master or his
designee. These hearings shall be conducted in a nonadversarial manner,
the objective of which will be to permit the claimant to present
information or evidence that the claimant believes is necessary to a
full understanding of the claim. Claimants will be permitted, but not
required, to present witnesses, including expert witnesses. The hearing
officer shall be permitted to examine the credentials of experts.
The hearings shall be limited in length to a time period determined
by the Special Master or the relevant hearing officer, but generally
not to exceed two hours. The hearings shall, to the extent practicable,
be scheduled at times and in locations convenient to the claimant or
his or her representative. The claimant shall be entitled to be
represented by an attorney in good standing, but it is not necessary
that the claimant be represented by an attorney.
G. Assistance to Claimants
In its November 5, 2001 Notice of Inquiry, the Department noted
that section 405(a) of the Act establishes some specific requirements
with respect to the claim form and the information to be included. The
law requires the Special Master to develop a claim form to use in
filing claims for compensation under this program. The Special Master
is to ensure that the form can be filed electronically if it is
determined to be practicable. Moreover, by law, the form must include a
statement of the factual basis for eligibility and information
regarding income in recent years. In addition, the form is to request
information from the claimant as to: (1) The physical harm suffered by
a victim, or information confirming the death of the victim, as a
result of the terrorist-related aircraft crashes of September 11, 2001;
(2) income tax returns for recent years and other records; and (3)
documentation regarding collateral source compensation including life
insurance policies and government or employment-related programs which
have or may provide funds or benefits to the claimant.
The Department believes that it is important that this Fund be
accessible to potential claimants who have limited resources and who
are not trained in the law. Rather than attempt to address in detail
the means by which the Special Master should provide assistance to
claimants, these regulations leave the Special Master with discretion
to implement steps to provide assistance to claimants and to make this
Fund accessible to them.
Because the Act does not provide for payment of legal or other fees
by the Fund, these regulations do not impose any limits on the types or
amount of fees that claimants may pay their attorneys or others
providing assistance. Although the Department's regulations do not set
specific limits on attorneys fees separate from those existing in state
law or attorney ethical standards, the Department believes that
contingency arrangements exceeding 5% of a claimant's recovery from the
Fund would not be in the best interest of the claimants.
The Department contemplates that the Special Master will have
discretion to inform potential claimants of the nature of the Fund so
that they may make informed decisions regarding the types or amount of
fees that they pay for legal or other assistance. For example, the
Special Master may notify claimants and potential claimants of the
availability of free legal services. Likewise, the Special Master may
inform claimants and potential claimants that the Fund is a no-fault,
administrative scheme that should not involve the kind of risks and
expense that would justify any significant contingency fees.
These regulations similarly do not address the manner in which
claimants may use funds that they receive from the Fund, except that
the Personal Representatives must agree in an acknowledgment and
release form to distribute the award to the beneficiaries of the
decedent in accordance with the decedent's will or applicable state law
or ruling by a court of competent jurisdiction. While the Department
does not believe that it is appropriate for the Special Master to place
further legal restrictions on the claimants' or beneficiaries' use of
payments from the Fund, the Department does contemplate that the
Special Master will have discretion to provide claimants with
information regarding annuities or other financial planning devices or
to offer structured awards with periodic payments.
Application of Various Laws and Executive Orders to This Rulemaking
Administrative Procedure Act, 5 U.S.C. 553
This rule provides for compensation to eligible individuals who
were physically injured and to the personal representatives of those
who were killed as a result of the terrorist-related aircraft crashes
of September 11, 2001. In order to provide compensation to eligible
claimants as expeditiously as possible, Congress set a short 90-day
deadline for the issuance of these regulations. The Department did seek
public input on the issues, but it was not possible for the Department
to prepare and publish a proposed rule for notice and comment within
that very short time period.
The APA provides that an agency need not go through proposed
rulemaking and comment before issuing rules to implement benefits
programs. 5 U.S.C. 553(a)(2). Moreover, the Department, in consultation
with the Special Master, determined that taking the time to draft and
publish a proposed rule for notice and comment before this rule took
effect would have been impracticable in light of the short time between
the enactment of the statute and the deadline for rulemaking, and also
would have been contrary to the public interest, which strongly favors
prompt disbursement of benefits. Accordingly, the Department has
determined that there is ``good cause'' for exempting this rule from
the provision of the Administrative Procedure Act that requires a
notice of proposed rulemaking and the opportunity for public comment. 5
U.S.C. 553(b)(B).
For the same reasons, the Department also finds ``good cause'' for
exempting this rule from the provision of the Administrative Procedure
Act providing for a delayed effective date. 5 U.S.C. 553(d). Delaying
the opportunity for eligible claimants to seek Advance Benefits or to
file claims under the Act would be contrary to the public interest.
Congressional Review Act
The Administrator of the Office of Information and Regulatory
Affairs of the Office of Management and Budget has designated this
interim final rule as a ``major rule'' as that term is defined by the
Congressional Review Act (``CRA''), 5 U.S.C. 801 et. seq. Pursuant to
section 808(2) of the CRA, the Department finds that ``good cause''
exists for establishing an effective date for this rule upon
publication because delay would be impracticable in light of the short
time between the enactment of the statute and the deadline for
rulemaking, and also would be contrary to the public interest favoring
prompt disbursement of benefits.
Paperwork Reduction Act of 1995
The Department of Justice, Civil Division, has submitted the
following information collection request to the Office of Management
and Budget (OMB) for review and clearance in accordance with the
emergency review procedures of the Paperwork Reduction Act of 1995. OMB
approval has been granted, and this information collection
[[Page 66281]]
has been assigned OMB control number 1105-0073. The proposed
information collection is published to obtain comments from the public
and affected agencies. The emergency approval is only valid for 180
days. Comments should be directed to OMB, Office of Information and
Regulatory Affairs, Attention: Department of Justice Desk Officer,
Washington, DC 20530.
During the first 60 days of this same review period, a regular
review of this information collection will be undertaken. All comments
and suggestions, or questions regarding additional information,
including obtaining a copy of the proposed information collection
instrument with instructions, should be directed to Office of the
Special Master, U.S. Department of Justice, 950 Pennsylvania Avenue,
NW., Washington, DC 20530. We request written comments and suggestions
from the public and affected agencies concerning the proposed emergency
collection of information.
Your comments should address one or more of the following four
points:
(1) Evaluate whether the proposed collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of
the proposed collection of information, including the validity of the
methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to
be collected; and
(4) Minimize the burden of the collection of information on those
who are to respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology, e.g., permitting electronic
submission of responses.
Overview of This Information Collection
(1) Type of Information Collection: New Collection.
(2) Title of the Form/Collection: Registration/Eligibility Form and
Application for Emergency Benefits from the Victim Compensation Fund.
(3) Agency form number, if any, and the applicable component of the
Department of Justice sponsoring the collection: Form Number: SM-001,
Office of the Special Master, Department of Justice.
(4) Affected public who will be asked or required to respond, as
well as a brief abstract: Primary: Individuals who were physically
injured and personal representatives of those killed as a result of the
terrorist-related aircraft crashes of September 11, 2001. Abstract: The
information collected from the Registration/Eligibility Form and
Application for Emergency Benefits from the Victim Compensation Fund
will be used to make advance payments to those claimants deemed
eligible by the Special Master or his designee.
(5) An estimate of the total number of respondents and the amount
of time estimated for an average respondent to respond: 5,000 claimants
with an average of 6.0 hours per response.
(6) An estimate of the total public burden (in hours) associated
with the collection: 30,000 hours annually.
If additional information is required, contact: Robert B. Briggs,
Department Clearance Officer, Information Management and Security
Staff, Justice Management Division, United States Department of
Justice, 601 D Street NW, Suite 1600, Washington, D.C. 20004.
Privacy Act of 1974
The Department of Justice, Civil Division is establishing a new
Privacy Act system of records entitled ``September 11th Victim
Compensation Fund of 2001, JUSTICE/CIV-008.'' By law, regulations
addressing certain administrative matters for the September 11th Victim
Compensation Fund of 2001 must be issued within the 90-day period
established by Congress. The Privacy Act notice will be published with
no routine uses, so that it will be effective on the date published. It
is likely that amendments to this notice, including routine uses, will
be published at a later date, with the opportunity to comment. In the
interim, disclosures necessary to process claims will be made only with
the written consent of claimants or as otherwise authorized under 5
U.S.C. 552a(b).
Regulatory Flexibility Act
These regulations set forth procedures by which the Federal
government will award compensation benefits to eligible victims of the
September 11, 2001 terrorist attacks. Under 5 U.S.C. 601(6), the term
``small entity'' does not include the Federal government, the party
charged with incurring the costs attendant to the implementation and
administration of the Victims Compensation Fund. To the extent that
small entities, including small government entities, will be
economically affected by the promulgation of these regulations, such
effects will likely be minimal. Further, the number of entities that
will be affected will, in all probability, fall short of a
``substantial number'' of small entities. In fact, the Department
believes that the promulgation of these rules will play a considerable
role in reducing the amount of complex, private litigation, wherein a
substantial number of small (and large) entities would undoubtedly be
significantly impacted.
Accordingly, the Department has reviewed this rule in accordance
with the Regulatory Flexibility Act (5 U.S.C. 605(b)) and by approving
it certifies that this rule will not have a significant economic impact
on a substantial number of small entities because it provides
compensation to eligible individuals who were physically injured as a
result of the terrorist-related aircraft crashes of September 11, 2001,
and compensation through a ``personal representative'' for those who
were killed as a result of those crashes. This rule provides
compensation to individuals, not to entities.
Unfunded Mandates Reform Act of 1995
This rule will not result in the expenditure by State, local and
tribal governments, in the aggregate, or by the private sector, of
$100,000,000 or more in any one year, and it will not significantly or
uniquely affect small governments. Therefore, no actions were deemed
necessary under the provisions of the Unfunded Mandates Reform Act of
1995.
Executive Order 12866--Regulatory Planning and Review
This regulation has been drafted and reviewed in accordance with
Executive Order 12866, ``Regulatory Planning and Review,'' section
1(b), Principles of Regulation. The Department of Justice has
determined that this rule is a ``significant regulatory action'' under
Executive Order 12866, section 3(f), Regulatory Planning and Review,
and accordingly this rule has been reviewed by the Office of Management
and Budget.
Executive Order 13132--Federalism
This regulation will not have substantial direct effects on the
States, on the relationship between the national government and the
States, or on distribution of power and responsibilities among the
various levels of government. Therefore, in accordance with Executive
Order 13132, it is determined that this rule does not have sufficient
federalism implications to warrant the preparation of a Federalism
Assessment. However, the Department of Justice has worked cooperatively
with state and local officials in the affected communities in the
preparation of this rule. Also, the
[[Page 66282]]
Department individually notified national associations representing
elected officials of the initial request for comment and will be taking
similar action in connection with the interim final rule.
List of Subjects in 28 CFR Part 104
Disaster assistance, Disability benefits, Terrorism.
Accordingly, for the reasons set forth in the preamble, Part 104 of
chapter I of Title 28 of the Code of Federal Regulations is added to
read as follows:
PART 104--SEPTEMBER 11TH VICTIM COMPENSATION FUND OF 2001
Subpart A--General; Eligibility
104.1 Purpose.
104.2 Eligibility definitions and requirements.
104.3 Other definitions.
104.4 Personal Representative.
104.5 Foreign claims.
104.6 Amendments to this rule.
Subpart B--Filing for Compensation; Application for Advance Benefits
104.21 Filing for compensation.
104.22 Advance benefits.
Subpart C--Claim Intake, Assistance, and Review Procedures
104.31 Procedure for claims evaluation.
104.32 Eligibility review.
104.33 Hearing.
104.34 Publication of awards.
104.35 Claims deemed abandoned by claimants.
Subpart D--Amount of Compensation for Eligible Claimants
104.41 Amount of compensation.
104.42 Applicable state law.
104.43 Determination of presumed economic loss for decedents.
104.44 Determination of presumed noneconomic losses for decedents.
104.45 Determination of presumed economic loss for claimants who
suffered physical harm.
104.46 Determination of presumed noneconomic losses for claimants
who suffered physical harm.
104.47 Collateral sources.
Subpart E--Payment of Claims
104.51 Payments to eligible individuals.
104.52 Distribution of award to decedent's beneficiaries.
Subpart F--Limitations
104.61 Limitation on civil actions.
104.62 Time limit on filing claims.
104.63 Subrogation.
Subpart G--Measures to Protect the Integrity of the Compensation
Program
104.71 Procedures to prevent and detect fraud.
Authority: Title IV of Pub. L. 107-42, 115 Stat. 230, 49 U.S.C.
40101 note.
Subpart A--General; Eligibility
Sec. 104.1 Purpose.
This part implements the provisions of the September 11th Victim
Compensation Fund of 2001, Title IV of Public Law 107-42, 115 Stat. 230
(Air Transportation Safety and System Stabilization Act) to provide
compensation to eligible individuals who were physically injured as a
result of the terrorist-related aircraft crashes of September 11, 2001,
and to the ``personal representatives'' of those who were killed as a
result of the crashes. All compensation provided through the Fund will
be on account of personal physical injuries or death.
Sec. 104.2 Eligibility definitions and requirements.
(a) Eligible claimants. The term eligible claimants means:
(1) Individuals present at the World Trade Center, Pentagon, or
Shanksville, Pennsylvania site at the time of or in the immediate
aftermath of the crashes and who suffered physical harm, as defined
herein, as a direct result of the terrorist-related aircraft crashes;
(2) The Personal Representatives of deceased individuals aboard
American Airlines flights 11 or 77 and United Airlines flights 93 or
175; and
(3) The Personal Representatives of individuals who were present at
the World Trade Center, Pentagon, or Shanksville, Pennsylvania site at
the time of or in the immediate aftermath of the crashes and who died
as a direct result of the terrorist-related aircraft crash.
(4) The term eligible claimants does not include any individual or
representative of an individual who is identified to have been a
participant or conspirator in the terrorist-related crashes of
September 11.
(b) Immediate aftermath. The term immediate aftermath of the
crashes shall mean, for purposes of all claimants other than rescue
workers, the period of time from the crashes until 12 hours after the
crashes. With respect to rescue workers who assisted in efforts to
search for and recover victims, the immediate aftermath shall include
the period from the crashes until 96 hours after the crashes.
(c) Physical harm.
(1) The term physical harm shall mean 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 in-patient for at least 24
hours; or
(ii) Caused, either temporarily or permanently, partial or total
physical disability, incapacity or disfigurement.
(2) In every case not involving death, the physical injury must be
verified by contemporaneous medical records created by or at the
direction of the medical professional who provided the medical care.
(d) Personal Representative. The term Personal Representative shall
mean the person determined to be the Personal Representative under
Sec. 104.4 of this part.
(e) Present at the site. The term present at the site (i.e., the
World Trade Center, Pentagon, or Shanksville, Pennsylvania site) shall
mean physically present at the time of the crashes or in the immediate
aftermath:
(1) In the buildings or portions of buildings that were destroyed
as a result of the airplane crashes; or
(2) In any area contiguous to the crash sites that the Special
Master determines was sufficiently close to the site that there was a
demonstrable risk of physical harm resulting from the impact of the
aircraft or any subsequent fire, explosions, or building collapses
(generally, the immediate area in which the impact occurred, fire
occurred, portions of buildings fell, or debris fell upon and injured
persons).
Sec. 104.3 Other definitions.
(a) Beneficiary. The term beneficiary shall mean a person entitled
under the laws of the decedent's domicile to receive payments or
benefits from the estate of or on behalf of the decedent on whose
behalf the claim to the Fund was filed.
(b) Dependents. The Special Master shall identify as dependents
those persons so identified by the victim on his or her federal tax
return for the year 2000 unless:
(1) The claimant demonstrates that a minor child of the victim was
born or adopted on or after January 1, 2001;
(2) Another person became a dependent in accordance with then-
applicable law on or after January 1, 2001; or
(3) The victim was not required by law to file a federal income tax
return for the year 2000.
(c) Spouse. The Special Master shall identify as the spouse of a
victim the person reported as spouse on the victim's federal tax return
for the year 2000 unless:
(1) The victim was married or divorced in accordance with
applicable state law on or after January 1, 2001; or
(2) The victim was not required by law to file a federal income tax
return for the year 2000.
[[Page 66283]]
(d) The Act. The Act, as used in this part, shall mean Public Law
107-42, 115 Stat. 230 (``Air Transportation Safety and System
Stabilization Act''), 49 U.S.C. 40101 note.
(e) Victim. The term victim shall mean an eligible injured claimant
or a decedent on whose behalf a claim is brought by an eligible
Personal Representative.
Sec. 104.4 Personal Representative.
(a) In general. The Personal Representative shall be:
(1) An individual appointed by a court of competent jurisdiction as
the Personal Representative of the decedent or as the executor or
administrator of the decedent's will or estate.
(2) In the event that no Personal Representative or executor or
administrator has been appointed by any court of competent
jurisdiction, and such issue is not the subject of pending litigation
or other dispute, the Special Master may, in his discretion, determine
that the Personal Representative for purposes of compensation by the
Fund is the person named by the decedent in the decedent's will as the
executor or administrator of the decedent's estate. In the event no
will exists, the Special Master may, in his discretion, determine that
the Personal Representative for purposes of compensation by the Fund is
the first person in the line of succession established by the laws of
the decedent's domicile governing intestacy.
(b) Notice to beneficiaries. Any purported Personal Representative
must, before filing an Eligibility Form, provide written notice of the
claim (including a designated portion of the Eligibility Form) to the
immediate family of the decedent (including, but not limited to, the
decedent's spouse, former spouses, children, other dependents, and
parents), to the executor, administrator, and beneficiaries of the
decedent's will, and to any other persons who may reasonably be
expected to assert an interest in an award or to have a cause of action
to recover damages relating to the wrongful death of the decedent.
Personal delivery or transmission by certified mail, return receipt
requested, shall be deemed sufficient notice under this provision. The
claim forms shall require that the purported Personal Representative
certify that such notice (or other notice that the Special Master deems
appropriate) has been given. In addition, as provided in
Sec. 104.21(b)(5) of this part, the Special Master may publish a list
of individuals who have filed Eligibility Forms and the names of the
victims for whom compensation is sought, but shall not publish the
content of any such form.
(c) Objections to Personal Representatives. Objections to the
authority of an individual to file as the Personal Representative of a
decedent may be filed with the Special Master by parties who assert a
financial interest in the award up to 30 days following the filing by
the Personal Representative. If timely filed, such objections shall be
treated as evidence of a ``dispute'' pursuant to paragraph (d) of this
section.
(d) Disputes as to identity. The Special Master shall not be
required to arbitrate, litigate, or otherwise resolve any dispute as to
the identity of the Personal Representative. In the event of a dispute
over the appropriate Personal Representative, the Special Master may
suspend adjudication of the claim or, if sufficient information is
provided, calculate the appropriate award and authorize payment, but
place in escrow any payment until the dispute is resolved either by
agreement of the disputing parties or by a court of competent
jurisdiction. Alternatively, the disputing parties may agree in writing
to the identity of a Personal Representative to act on their behalf,
who may seek and accept payment from the Fund while the disputing
parties work to settle their dispute.
Sec. 104.5 Foreign claims.
In the case of claims brought by or on behalf of foreign citizens,
the Special Master may alter the requirements for documentation set
forth herein to the extent such materials are unavailable to such
foreign claimants.
Sec. 104.6 Amendments to this rule.
In the event that amendments are subsequently made to any section
of this Part, claimants are entitled to have their claims processed in
accordance with the provisions that were in effect at the time that
their claims were submitted under Sec. 104.21(d).
Subpart B--Filing for Compensation; Application for Advance
Benefits
Sec. 104.21 Filing for compensation.
(a) Compensation form; ``filing.'' Except for applications for
Advance Benefits pursuant to Sec. 104.22, no claim may be considered
until the claimant has submitted both an ``Eligibility Form'' and
either a ``Personal Injury Compensation Form'' or a ``Death
Compensation Form.'' A claim shall be deemed ``filed'' for purposes of
section 405(b)(3) of the Act (providing that the Special Master shall
issue a determination not later than 120 days after the date on which a
claim is filed), and for any time periods in this part, when a Claims
Evaluator determines that both the Eligibility Form and either a
Personal Injury Compensation Form or a Death Compensation Form are
substantially complete. Provided, however, that if a claimant files an
Eligibility Form requesting Advance Benefits pursuant to Sec. 104.22 of
this part without filing either a ``Personal Injury Compensation Form''
or a ``Death Compensation Form,'' the claim shall be deemed ``filed''
when the Claims Evaluator determines that the Eligibility Form is
substantially complete, but the time period for determination and any
time periods in this part shall be stayed or tolled as described in
Sec. 104.22(g) of this part.
(b) Eligibility Form. The Special Master shall develop an
Eligibility Form that will require the claimant to provide information
necessary for determining the claimant's eligibility to recover from
the Fund.
(1) The Eligibility Form may require that the claimant certify that
he or she has dismissed any pending lawsuit seeking damages as a result
of the terrorist-related airplane crashes of September 11, 2001 (except
for actions seeking collateral source benefits) within 90 days of the
effective date of this part pursuant to section 405(c)(3)(B)(ii) of the
Act and that there is no pending lawsuit brought by a dependent,
spouse, or beneficiary of the victim.
(2) The Special Master may require as part of the notice
requirement pursuant to Sec. 104.4(b) that the claimant provide copies
of a designated portion of the Eligibility Form to the immediate family
of the decedent (including, but not limited to, the spouse, former
spouses, children, other dependents, and parents), to the executor,
administrator, and beneficiaries of the decedent's will, and to any
other persons who may reasonably be expected to assert an interest in
an award or to have a cause of action to recover damages relating to
the wrongful death of the decedent.
(3) The Eligibility Form may require claimants to provide the
following proof:
(i) Proof of death: Death certificate or similar official
documentation;
(ii) Proof of presence at site: Documentation sufficient to
establish presence at one of the crash sites, which may include,
without limitation, a death certificate, records of employment,
contemporaneous medical records, contemporaneous records of federal,
state, city or local government, an affidavit or declaration of the
decedent's or injured claimant's employer, or other
[[Page 66284]]
sworn statement (or unsworn statement complying with 28 U.S.C. 1746)
regarding the presence of the victim;
(iii) Proof of death on board aircraft: Death certificate or
records of American or United Airlines or other sufficient official
documentation;
(iv) Proof of physical harm: Contemporaneous medical records of
hospitals, clinics, physicians, licensed medical personnel, or
registries maintained by federal, state, or local government, and
records of all continuing medical treatment;
(v) Personal Representative: Copies of relevant legal
documentation, including court orders; letters testamentary or similar
documentation; proof of the purported Personal Representative's
relationship to the decedent; copies of wills, trusts, or other
testamentary documents; and information regarding other possible
beneficiaries as requested by the Eligibility Form;
(vi) Any other information that the Special Master deems necessary
to determine the claimant's eligibility.
(4) The Special Master may also require waivers, consents, or
authorizations from claimants to obtain directly from third parties tax
returns, medical information, employment information, or other
information that the Special Master deems relevant in determining the
claimant's eligibility or award, and may request an opportunity to
review originals of documents submitted in connection with the Fund.
(5) Application for Advance Benefits: The Eligibility Form shall
include a section allowing claimants to indicate that they wish to
apply for Advance Benefits. Claimants who apply for such Advance
Benefits must certify on that Form that they have not yet received
$450,000 in collateral source compensation if they are bringing a claim
on behalf of a deceased victim with a spouse or dependent, $250,000 in
collateral source compensation if they are bringing a claim on behalf
of a deceased victim who was single with no dependents, or an amount in
excess of their lost wages plus out-of-pocket medical expenses if they
are an injured claimant. All such claimants also must state on the Form
facts establishing financial hardship that would justify a
determination that they are in need of Advance Benefits.
(6) The Special Master may publish a list of individuals who have
filed Eligibility Forms and the names of the victims for whom
compensation is sought, but shall not publish the content of any such
form.
(c) Personal Injury Compensation Form and Death Compensation Form.
The Special Master shall develop a Personal Injury Compensation Form
that each injured claimant must submit. The Special Master shall also
develop a Death Compensation Form that each Personal Representative
must submit. These forms shall require the claimant to provide certain
information that the Special Master deems necessary to determining the
amount of any award, including information concerning income,
collateral sources, benefits, and other financial information, and
shall require the claimant to state the factual basis for the amount of
compensation sought. It shall also allow the claimant to submit certain
other information that may be relevant, but not necessary, to the
determination of the amount of any award.
(1) Claimants shall, at a minimum, submit all tax returns that were
filed for the years 1998, 1999, and 2000. The Special Master may, at
his discretion, require that claimants submit copies of tax returns or
other records for any other period of years he deems appropriate for
determination of an award. The Special Master may also require waivers,
consents, or authorizations from claimants to obtain directly from
third parties medical information, employment information, or other
information that the Special Master deems relevant to determining the
amount of any award.
(2) Claimants may attach to the ``Personal Injury Compensation
Form'' or ``Death Compensation Form'' any additional statements,
documents or analyses by physicians, experts, advisors, or any other
person or entity that the claimant believes may be relevant to a
determination of compensation.
(d) Submission of a claim. Section 405(c)(3)(B) of the Act provides
that upon the submission of a claim under the Fund, the claimant waives
the right to file a civil action (or to be a party to an action) in any
Federal or State court for damages sustained as a result of the
terrorist-related aircraft crashes of September 11, 2001, except for
civil actions to recover collateral source obligations. A claim shall
be deemed submitted for purposes of section 405(c)(3)(B) of the Act
when the claim is deemed filed pursuant to Sec. 104.21, regardless of
whether any time limits are stayed or tolled.
(e) Provisions of information by third parties. Any third party
having an interest in a claim brought by a Personal Representative may
provide written statements or information regarding the Personal
Representative's claim. The Claims Evaluator or the Special Master or
his designee may, at his or her discretion, include the written
statements or information as part of the claim.
Sec. 104.22 Advance Benefits.
(a) Advance Benefits. Eligible Claimants may apply for immediate
``Advance Benefits'' in a fixed amount as follows:
(1) $50,000 for Personal Representatives; and
(2) $25,000 for injured claimants who meet the requirements of
paragraph (d) of this section.
(b) Credit against award. The Advance Benefit shall be credited
against any final compensation award so that the amount of the Advance
Benefit is deducted from the final award under this program.
(c) Application for Advance Benefits. An otherwise eligible
claimant may seek Advance Benefits to alleviate financial hardship
faced by the claimant (or financial hardship faced by the beneficiaries
of the decedent) by submitting an Eligibility Form described in
Sec. 104.21(b) and indicating thereon that he or she is applying for
Advance Benefits.
(d) Eligibility for Advance Benefits. In the case of a Personal
Representative, the claimant may be deemed eligible for Advance
Benefits if a Claims Evaluator or the Special Master or his designee
determines that the claimant is eligible to recover under the Fund. In
the case of an injured claimant, the claimant may be deemed eligible
for Advance Benefits when the Special Master or his designee determines
that the claimant is eligible to recover under the Fund and that the
claimant's physical injury required hospitalization for one week or
more.
(e) Authorization of payments.
(1) Payment in the amount described in paragraph (a) of this
section will be authorized immediately upon a determination that the
claimant is eligible for Advance Benefits and the claimant is:
(i) An injured claimant;
(ii) A Personal Representative who was the spouse of the deceased
victim on September 11, 2001; or
(iii) A Personal Representative who has obtained the consent of the
spouse of the deceased victim (or, if there is no surviving spouse, all
of the dependents of the deceased victim) to file for Advance Benefits.
(2)(i) With respect to other Personal Representatives, payment will
be authorized within 15 days after the determination that the claimant
is eligible for Advance Benefits, provided that no other individual has
asserted a colorable conflicting claim as the Personal Representative
with respect to the decedent and the Personal
[[Page 66285]]
Representative identifies and has given notice to the beneficiaries to
whom such Advance Benefits will be distributed.
(ii) In the event that a colorable conflicting claim has been
asserted, no Advance Benefit will be paid until a final eligibility
determination has been made.
(f) Tolling of 120-day clock and other time periods. A claimant
filing an Eligibility Form requesting Advance Benefits before filing a
Personal Injury Compensation Form or Death Compensation Form will be
deemed to have waived his right to commencement of the 120-day period
in section 405(b)(3) of the Act (providing that the Special Master
shall provide notice to the claimant of his determination within 120
days after the date on which a claim is filed). The 120-day period and
all other time limitations in this part, except those applicable to
Advance Benefit payments, shall be stayed or tolled until such time
that a Claims Evaluator determines that the claimant's Personal Injury
Compensation Form or Death Compensation Form is substantially complete.
Subpart C--Claim Intake, Assistance, and Review Procedures
Sec. 104.31 Procedure for claims evaluation.
(a) Initial review. Claims Evaluators shall review the forms filed
by the claimant and either deem the claim ``filed'' (pursuant to
104.21(a)) or notify the claimant of any deficiency in the forms or any
required documents.
(b) Procedural tracks. Each claim will be placed on a procedural
track, described herein as ``Track A'' and ``Track B,'' selected by the
claimant on the Personal Injury Compensation Form or Death Compensation
Form.
(1) Procedure for Track A. The Claims Evaluator shall determine
eligibility and the claimant's presumed award pursuant to Secs. 104.43
to 104.46 of this part and, within 45 days of the date the claim was
deemed filed, notify the claimant in writing of the eligibility
determination, the amount of the presumed award, and the right to
request a hearing before the Special Master or his designee under
Sec. 104.33 of this part. After an eligible claimant has been notified
of the presumed award, the claimant may either accept the presumed
compensation determination as the final determination and request
payment, or may instead request a review before the Special Master or
his designee pursuant to Sec. 104.33. Claimants found to be ineligible
may appeal pursuant to Sec. 104.32.
(2) Procedure for Track B. The Claims Evaluator shall determine
eligibility within 45 days of the date the claim was deemed filed, but
shall not determine the claimant's presumed award; the Claims Evaluator
shall notify the claimant in writing of the eligibility determination.
Upon notification of eligibility, the claimant will proceed to a
hearing pursuant to Sec. 104.33. At such hearing, the Special Master or
his designee shall utilize the presumptive award methodology as set
forth in Secs. 104.43 to 104.46 of this part, but may modify or vary
the award if the claimant presents extraordinary circumstances not
adequately addressed by the presumptive award methodology. There shall
be no review or appeal from this determination.
(c) Multiple claims from the same family. The Special Master may
treat claims brought by or on behalf of two or more members of the same
immediate family as related or consolidated claims for purposes of
determining the amount of any award.
Sec. 104.32 Eligibility review.
Any claimant deemed ineligible by the Claims Evaluator may appeal
that decision to the Special Master or his designee by filing an
eligibility appeal on forms created by the office of the Special
Master.
Sec. 104.33 Hearing.
(a) Supplemental submissions. The claimant may prepare and file
Supplemental Submissions within 21 calendar days from notification of
either the presumed award (Track A) or eligibility (Track B). The
Special Master shall develop forms appropriate for Supplemental
Submissions.
(b) Conduct of hearings. Hearings shall be before the Special
Master or his designee. The objective of hearings shall be to permit
the claimant to present information or evidence that the claimant
believes is necessary to a full understanding of the claim. The
claimant may request that the Special Master or his designee review any
evidence relevant to the determination of the award, including without
limitation: Factors and variables used in calculating economic loss;
the identity of the victim's spouse and dependents; the financial needs
of the claimant; facts affecting noneconomic loss; and any factual or
legal arguments that the claimant contends should affect the award.
Claimants shall be entitled to submit any statements or reports in
writing. The Special Master or his designee may require authentication
of documents, including medical records and reports, and may request
and consider information regarding the financial resources and expenses
of the victim's family or other material that the Special Master or his
designee deems relevant.
(c) Location and duration of hearings. The hearings shall, to the
extent practicable, be scheduled at times and in locations convenient
to the claimant or his or her representative. The hearings shall be
limited in length to a time period determined by the Special Master or
his designee, but generally not to exceed two hours. The claimant may
elect whether the hearing shall be public or private.
(d) Witnesses, counsel, and experts. Claimants shall be permitted,
but not required, to present witnesses, including expert witnesses. The
Special Master or his designee shall be permitted to question witnesses
and examine the credentials of experts. The claimant shall be entitled
to be represented by an attorney in good standing, but it is not
necessary that the claimant be represented by an attorney.
(e) Waivers. The Special Master shall have authority and discretion
to require any waivers necessary to obtain more individualized
information on specific claimants.
(f) Track A review of presumed award. For proceedings under Track
A, the Special Master or his designee shall make a determination
whether:
(1) There was an error in determining the presumptive award, either
because the claimant's individual criteria were misapplied or for
another reason; or
(2) The claimant presents extraordinary circumstances not
adequately addressed by the presumptive award.
(g) Determination. The Special Master shall notify the claimant in
writing of the final amount of the award, but need not create or
provide any written record of the deliberations that resulted in that
determination. There shall be no further review or appeal of the
Special Master's determination.
Sec. 104.34 Publication of awards.
In order to assist potential claimants in evaluating their options
of either filing a claim with the Special Master or filing a lawsuit in
tort, the Special Master reserves the right to publicize the amounts of
some or all of the awards, but shall not publish the name of the
claimants or victims that received each award. If published, these
decisions would be intended by the Special Master as general guides for
potential claimants and should not be viewed as precedent binding on
the Special Master or his staff.
[[Page 66286]]
Sec. 104.35 Claims deemed abandoned by claimants.
The Special Master and his staff will endeavor to evaluate promptly
any information submitted by claimants. Nonetheless, it is the
responsibility of the claimant to keep the Special Master informed of
his or her current address and to respond within the duration of this
two-year program to requests for additional information. Claims
outstanding at the end of this program because of a claimant's failure
to complete his or her filings shall be deemed abandoned.
Subpart D--Amount of Compensation for Eligible Claimants.
Sec. 104.41 Amount of compensation.
As provided in section 405(b)(1)(B)(ii) of the Act, in determining
the amount of compensation to which a claimant is entitled, the Special
Master shall take into consideration the harm to the claimant, the
facts of the claim, and the individual circumstances of the claimant.
The individual circumstances of the claimant may include the financial
needs or financial resources of the claimant or the victim's dependents
and beneficiaries. As provided in section 405(b)(6) of the Act, the
Special Master shall reduce the amount of compensation by the amount of
collateral source compensation the claimant (or, in the case of a
Personal Representative, the victim's beneficiaries) has received or is
entitled to receive as a result of the terrorist-related aircraft
crashes of September 11, 2001. In no event shall an award (before
collateral source compensation has been deducted) be less than $500,000
in any case brought on behalf of a deceased victim with a spouse or
dependent, or $300,000 in any case brought on behalf of a deceased
victim who was single with no dependents.
Sec. 104.42 Applicable state law.
The phrase ``to the extent recovery for such loss is allowed under
applicable state law,'' as used in the statute's definition of economic
loss in section 402(5) of the Act, is interpreted to mean that the
Special Master is not permitted to compensate claimants for those
categories or types of economic losses that would not be compensable
under the law of the state that would be applicable to any tort claims
brought by or on behalf of the victim.
Sec. 104.43 Determination of presumed economic loss for decedents.
In reaching presumed determinations for economic loss for Personal
Representatives bringing claims on behalf of decedents, the Special
Master shall consider sums corresponding to the following:
(a) Loss of earnings or other benefits related to employment. The
Special Master, as part of the process of reaching a ``determination''
pursuant to section 405(b) of the Act, shall develop a methodology and
publish schedules, tables, or charts that will permit prospective
claimants to estimate determinations of loss of earnings or other
benefits related to employment based upon individual circumstances of
the deceased victim, including: The age of the decedent as of September
11, 2001; the number of dependents who survive the decedent; whether
the decedent is survived by a spouse; and the amount and nature of the
decedent's income for recent years. The decedent's salary/income in
1998-2000 shall be evaluated in a manner that the Special Master deems
appropriate. The Special Master may, if he deems appropriate, take an
average of income figures for each of those three years. The Special
Master's methodology and schedules, tables, or charts shall yield
presumed determinations of loss of earnings or other benefits related
to employment for annual incomes up to but not beyond the 98th
percentile of individual income in the United States for the year 2000.
In cases where the victim was a minor child, the Special Master may
assume an average income for the child commensurate with the average
income of all wage earners in the United States.
(b) Medical expense loss. This loss equals the out-of-pocket
medical expenses that were incurred as a result of the physical harm
suffered by the victim (i.e., those medical expenses that were not paid
for or reimbursed through health insurance). This loss shall be
calculated on a case-by-case basis, using documentation and other
information submitted by the Personal Representative.
(c) Replacement services loss. For decedents who did not have any
prior earned income, or who worked only part time outside the home,
economic loss may be determined with reference to replacement services
and similar measures.
(d) Loss due to death/burial costs. This loss shall be calculated
on a case-by-case basis, using documentation and other information
submitted by the personal representative and includes the out-of-pocket
burial costs that were incurred.
(e) Loss of business or employment opportunities. Such losses shall
be addressed through the procedure outlined above in paragraph (a) of
this section.
Sec. 104.44 Determination of presumed noneconomic losses for
decedents.
The presumed noneconomic losses for decedents shall be $250,000
plus an additional $50,000 for the spouse and each dependent of the
deceased victim. Such presumed losses include a noneconomic component
of replacement services loss.
Sec. 104.45 Determination of presumed economic loss for claimants who
suffered physical harm.
In reaching presumed determinations for economic loss for claimants
who suffered physical harm (but did not die), the Special Master shall
consider sums corresponding to the following:
(a) Loss of earnings or other benefits related to employment. The
Special Master may determine the loss of earnings or other benefits
related to employment on a case-by-case basis, using documentation and
other information submitted by the claimant, regarding the actual
amount of work that the claimant has missed or will miss without
compensation. Alternatively, the Special Master may determine the loss
of earnings or other benefits related to employment by relying upon the
methodology created pursuant to Sec. 104.43(a) and adjusting the loss
based upon the extent of the victim's physical harm.
(1) Disability; in general. In evaluating claims of disability, the
Special Master will, in general, make a determination regarding whether
the claimant is capable of performing his or her usual profession in
light of the injuries.
(2) Total permanent disability. With respect to claims of total
permanent disability, the Special Master may accept a determination of
disability made by the Social Security Administration as evidence of
disability without any further medical evidence or review. The Special
Master may also consider determinations of permanent total disability
made by other governmental agencies or private insurers in evaluating
the claim. The Special Master may require that the claimant submit an
evaluation of the claimant's disability and ability to perform his or
her occupation prepared by medical experts.
(3) Partial disability. With respect to claims of partial
disability, the Special Master may consider evidence of the effect of
the partial disability on the claimant's ability to perform his or her
usual occupation as well as the effect of the partial disability on the
claimant's ability to participate in usual daily activities.
(b) Medical Expense Loss. This loss equals the out-of-pocket
medical
[[Page 66287]]
expenses that were incurred as a result of the physical harm suffered
by the victim (i.e., those medical expenses that were not paid for or
reimbursed through health insurance). In addition, this loss equals
future out-of-pocket medical expenses that will be incurred as a result
of the physical harm suffered by the victim (i.e., those medical
expenses that will not be paid for or reimbursed through health
insurance). These losses shall be calculated on a case-by-case basis,
using documentation and other information submitted by the claimant.
(c) Replacement services loss. For injured claimants who did not
have any prior earned income, or who worked only part-time outside the
home, economic loss may be determined with reference to replacement
services and similar measures.
(d) Loss of business or employment opportunities. Such losses shall
be addressed through the procedure outlined above in paragraph (a) of
this section.
Sec. 104.46 Determination of presumed noneconomic losses for claimants
who suffered physical harm.
The Special Master may determine the presumed noneconomic losses
for claimants who suffered physical harm (but did not die) by relying
upon the noneconomic losses described in Sec. 104.44 and adjusting the
losses based upon the extent of the victim's physical harm. Such
presumed losses include any noneconomic component of replacement
services loss.
Sec. 104.47 Collateral sources.
(a) Payments that constitute collateral source compensation. The
amount of compensation shall be reduced by all collateral source
compensation, including life insurance, pension funds, death benefit
programs, and payments by federal, state, or local governments related
to the terrorist-related aircraft crashes of September 11, 2001.
(b) Payments that do not constitute collateral source compensation.
The following payments received by claimants do not constitute
collateral source compensation:
(1) The value of services or in-kind charitable gifts such as
provision of emergency housing, food, or clothing; and
(2) Charitable donations distributed to the beneficiaries of the
decedent, to the injured claimant, or to the beneficiaries of the
injured claimant by private charitable entities; provided, however,
that the Special Master may determine that funds provided to victims or
their families through a private charitable entity constitute, in
substance, a payment described in paragraph (a) of this section.
Subpart E--Payment of Claims
Sec. 104.51 Payments to eligible individuals.
Not later than 20 days after the date on which a determination is
made by the Special Master regarding the amount of compensation due a
claimant under the Fund, the Special Master shall authorize payment to
such claimant of the amount determined with respect to the claimant.
Sec. 104.52 Distribution of award to decedent's beneficiaries.
The Personal Representative shall distribute the award in a manner
consistent with the law of the decedent's domicile or any applicable
rulings made by a court of competent jurisdiction. The Personal
Representative shall, before payment is authorized, provide to the
Special Master a plan for distribution of any award received from the
Fund. Notwithstanding any other provision of these regulations or any
other provision of state law, in the event that the Special Master
concludes that the Personal Representative's plan for distribution does
not appropriately compensate the victim's spouse, children, or other
relatives, the Special Master may direct the Personal Representative to
distribute all or part of the award be distributed to such spouse,
children, or other relatives.
Subpart F--Limitations
Sec. 104.61 Limitation on civil actions.
(a) General. Section 405(c)(3)(B) of the Act provides that upon the
submission of a claim under the Fund, the claimant waives the right to
file a civil action (or to be a party to an action) in any federal or
state court for damages sustained as a result of the terrorist-related
aircraft crashes of September 11, 2001, except that this limitation
does not apply to civil actions to recover collateral source
obligations. The Special Master shall take appropriate steps to inform
potential claimants of section 405(c)(3)(B) of the Act.
(b) Pending actions. Claimants who have filed a civil action or who
are a party to such an action as described in paragraph (a) of this
section may not file a claim with the Special Master unless they
withdraw from such action not later than March 21, 2002.
Sec. 104.62 Time limit on filing claims.
In accordance with the Act, no claim may be filed under this part
after December 22, 2003.
Sec. 104.63 Subrogation.
Compensation under this Fund does not constitute the recovery of
tort damages against a third party nor the settlement of a third party
action, and the United States shall be subrogated to all potential
claims against third party tortfeasors of any victim receiving
compensation from the Fund. For that reason, no person or entity having
paid other benefits or compensation to or on behalf of a victim shall
have any right of recovery, whether through subrogation or otherwise,
against the compensation paid by the Fund.
Subpart G--Measures to Protect the Integrity of the Compensation
Program
Sec. 104.71 Procedures to prevent and detect fraud.
(a) Review of claims. For the purpose of detecting and preventing
the payment of fraudulent claims and for the purpose of assuring
accurate and appropriate payments to eligible claimants, the Special
Master shall implement procedures to:
(1) Verify, authenticate, and audit claims;
(2) Analyze claim submissions to detect inconsistencies,
irregularities, duplication, and multiple claimants; and
(3) Ensure the quality control of claims review procedures.
(b) Quality control. The Special Master shall institute periodic
quality control audits designed to evaluate the accuracy of submissions
and the accuracy of payments, subject to the oversight of the Inspector
General of the Department of Justice.
(c) False or fraudulent claims. The Special Master shall refer all
evidence of false or fraudulent claims to appropriate law enforcement
authorities.
Dated: December 19, 2001.
John Ashcroft,
Attorney General.
Note: This Appendix will not appear in the Code of Federal
Regulations.
Appendix to Preamble--Summary of Public Comments Submitted in Response
to the November 5, 2001 Notice of Inquiry and Advance Notice of
Rulemaking
The following is a summary of the comments the Department of
Justice (``the Department'') received in response to its Notice of
Inquiry published on November 5, 2001. The Notice of Inquiry sought
input on numerous issues regarding potential regulations for the
``September 11 Victim Compensation Fund of 2001'' (the ``Fund''),
which was signed into law as Title IV of Public Law 107-42 (``Air
Transportation
[[Page 66288]]
Safety and System Stabilization Act'') (the ``Act'').
Over 800 comments were received by the November 26, 2001
deadline established by the Department. Additionally, hundreds of
comments have been received since that date. Every comment was--and
continues to be--reviewed, considered, and catalogued into one or
more of 72 different topics. While the following summary does not
address every issue raised by commenters, it provides a general
synopsis of the most often raised issues. The summary is not
intended to be an exhaustive illustration of every issue
contemplated by the Special Master or the Department. Indeed, as
mentioned above, all comments were considered in the promulgation of
these interim final rules. Finally, the summarized issues below are
not arranged in any particular order of importance or level of
volume.
The Effective Date of This Interim Final Rule
While the Act specified that this rule should be issued by
December 21, 2001, it did not specify when they should become
effective. Accordingly, the Department sought comment on this issue.
The Department noted that the Administrative Procedure Act generally
provides that rules not go into effect for at least 30 days absent
``good cause.''
Many commenters favored an immediate effective date so that
claims could be filed right away. Many indicated an immediate need
for relief and expressed frustration about their experiences with
obtaining short-term assistance from other sources. However, some
commenters thought an immediate effective date would be difficult to
implement because the Special Master would need time to hire
personnel and to set up the operation of the program before
beginning to process claims.
A number of commenters suggested a compromise--making available
some amount of short-term relief on an immediate basis to eligible
claimants, and then commencing the more detailed review process
necessary to provide a final award. Some suggested using flat
amounts for these immediate awards, while another commenter
suggested establishing an interest-free line of credit upon which
families could draw. Another suggestion was that claims for
immediate assistance be prioritized by ``need.''
Eligibility
In its November 5, 2001, Notice of Inquiry, the Department noted
that section 405(b) of the statute requires the Special Master to
determine whether a claimant is an ``eligible individual'' under
section 405(c). ``Eligibility,'' in turn, is defined by the Act to
include: (1) individuals (other than the terrorists) aboard American
Airlines flights 11 and 77 and United Airlines flights 93 and 175;
or (2) individuals who were ``present at'' the World Trade Center,
the Pentagon, or the site of the aircraft crash at Shanksville,
Pennsylvania at the time or in the immediate aftermath of the
crashes; or (3) personal representatives of deceased individuals who
would otherwise be eligible. Moreover, to be eligible for an award,
an individual must have suffered physical harm or death as a result
of one of the terrorist-related air crashes. The Department sought
comment on whether a Departmental regulation or a statement of
policy by the Special Master would be appropriate to clarify these
criteria, and if so, what those criteria should be.
The Department specifically invited comment on the following
questions related to eligibility:
How should ``present at'' be interpreted?
Should the term ``physical harm'' be limited to serious
injuries, as it is under some other no-fault compensation schemes,
(see, e.g., N.Y. Ins. Law Sec. 5102), or should it be construed more
broadly?
Should ``physical harm'' be limited to currently
identifiable injuries?
Can and should the program address latent, but not yet
evident, harm?
What duration of time is intended by the statutory
phrase ``immediate aftermath''?
(1) ``Present At'' And ``Immediate Aftermath''
Many of the comments addressed the question of how to define the
terms ``present at the site'' and ``immediate aftermath,''
especially for purposes of those who were in New York at the time of
the crashes. Some commenters urged a broad definition of these
terms. They recommended that anybody in New York City be considered
``present'' because the debris and ash from the collapse of the
World Trade Towers was widespread. Residents who live near the
Ground Zero site in New York urged that they be eligible to recover
under the Fund.
In contrast, other commenters argued for a narrower definition
of the terms, asserting that the legislation intended to constrain
the Fund to the locus of the buildings themselves, and to some very
limited time period after the crashes. One comment recommended that
``immediate aftermath'' be defined as 48 hours after the crashes.
(2) Physical Harm
With respect to the nature of harm involved, some commenters
asserted there should be no lower boundary for ``nonserious''
injuries. Of those who commented on the point, there were
disagreements as to whether post-traumatic stress could be
considered physical harm for purposes of filing a claim under the
Fund. Certain commenters indicated that many people suffered
substantial stress from witnessing the attacks and devastation and
that they should be eligible to recover from the Fund. However,
others argued that the Fund was not intended to cover psychological
injury because the language of the statute specifically requires
that the claimant suffer ``physical harm.'' These commenters feared
that recovery for stress-related injuries would open a Pandora's Box
of less serious claims, which, in turn, may reduce the amount of
compensation issued to those with the most serious physical
injuries.
(3) Latent Harm
Some of the comments focused on the problem of latent injuries
and diseases. Several commenters mentioned the coughing they have
experienced as a result of exposure to the crash site in New York,
and some nearby residents expressed concern about latent harm that
might accrue from returning to their homes before the conclusion of
the rescue and cleanup efforts. On the other hand, other commenters
expressed concern about covering any harms that do not manifest
themselves within the two-year lifetime of the Fund. They argued the
Fund was not designed to compensate for latent harm primarily
because the Fund only exists for two years, and many injuries may
not become manifest until after that time.
(4) Eligibility of Victims And Survivors
Some commenters addressed the meaning of the word ``victim.''
For example, some commenters urged that any unborn child who died
should be considered eligible for an award as a victim. With respect
to a different group of potential claimants, some commenters argued
that illegal aliens should not be eligible for awards. However,
other commenters did not think that legal status should preclude an
award from the Fund.
With regard to claims on behalf of decedent victims, the
comments evidenced a tremendous amount of confusion about whether
the statute intended to cover only the losses incurred by the victim
or the losses incurred by relatives and others. Some commenters
noted that section 405 of the Act provides that only claims on
behalf of the victim can be filed with the Fund, presumably leaving
to the courts any claims by family members or partners on their own
behalf. However, some commenters noted that section 403 of the Act
states that its purpose is to provide compensation to any individual
``or relatives of a deceased individual'' who were killed as a
result of the terrorist-related aircraft crashes. The commenters
further noted that various types of losses that may be compensated
by the Fund pursuant to section 402 are akin to those that in civil
actions are normally considered losses to survivors rather than to
the victim.
Many commenters commented on the ``eligibility'' of particular
``survivors'' of the victim. Some suggested that only a spouse and
children be considered ``eligible.'' Others expressed concern as to
whether parents, divorced spouses, children of a prior marriage, and
others with a legal relationship would be ``eligible'' for an award
under the Fund. In this regard, a number of comments specifically
urged that non-married partners and others with a non-traditional
relationship be considered ``eligible'' for an award. Some
commenters opposed the idea of extending eligibility under the Fund
to those in non-traditional relationships and argued for a narrower
definition of eligibility.
Similarly, there were a number of comments about how
``eligible'' survivors would participate in the decision of whether
to submit an application to the Fund, since in their view the
application to the Fund would prohibit all of them from filing civil
litigation. Some commenters explicitly suggested the law be
interpreted to allow claims both on behalf of the decedent's estate
and on behalf of any survivors, and suggested that such claims could
be consolidated for decision before the Special Master. Others,
however, specifically recommended that claims be limited to those on
behalf of the estate. Many commenters, presuming that to
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be the case, recommended that the state courts be responsible for
designating the representative to represent the estate, and that any
award be distributed in accordance with the requirements of the will
or state intestacy law.
Assistance to Claimants
In its Notice of Inquiry of November 5, 2001, the Department
noted that it would appear that these requirements--combined with
the statutory time frame for the Special Master to reach a decision
once a claim is filed--contemplate a detailed form and filing.
Accordingly, the Department invited comments on whether there are
actions the Special Master should be required to take before he can
accept a claim, or deem a claim ``filed.'' The Department noted that
the statute appeared to provide a very limited time frame for the
Special Master to evaluate a claim before making a decision--120
days from the date a claim is filed. Accordingly, the Department
sought comment on whether the Special Master should be permitted to
dismiss a claim as not properly filed for lack of adequate
supporting information and, if so, whether an individual should
thereafter be permitted to refile the claim. Comments were also
solicited on whether it would be advisable to include in the rules a
procedure where the time for making a determination could be
extended by agreement.
The Department also requested comment on the design and content
of the claim forms in light of the statutory requirements, as well
as on making the forms and their instructions readable and readily
available. The Department also sought comment on how it should
implement the statutory requirement that claimants be provided with
assistance.
While most of those who commented supported maintaining firm
deadlines, many commenters suggested that a claimant be able to
``halt the clock'' at the claimant's discretion for various purposes
(e.g., to provide further evidence before the claim is evaluated, to
allow more time to prepare for a hearing, or to allow for an
administrative review of an initial award determination). Some
suggested that the Special Master also have the authority not to
start the clock until the claim contained sufficient information
upon which an award determination could be made, or to halt the
process for a set period of time to allow for review of an initial
determination (provided that the claimant concurred with that
decision).
A number of commenters stressed that a claimant should not lose
the right to proceed with their claim due to an incomplete file. One
commenter suggested the Special Master should have 14 days to review
a claim before deciding if there is enough information to proceed.
Several commenters suggested that claimants not be required to waive
their right to litigation until it was determined the claimant was
eligible to recover from the Fund. Similarly, some commenters stated
they would have difficulty deciding whether or not to opt into the
fund (and thus waive their right to sue) if they did not have some
idea or presumption of the range of recovery they might expect from
the Fund.
Many commenters urged the Department to establish a simplified
procedure for initiating a claim with the Fund. They expressed
frustration with the barrage of paperwork required to apply for
assistance with other organizations. Some employers offered to
provide information on behalf of their employees or survivors in an
effort to reduce the paperwork burden on claimants. On the other
hand, some noted that--in light of the pro bono legal assistance
that has been offered to the survivors--claimants would have the
option to have the assistance of an attorney to complete the forms.
A number of commenters suggested a two-step claims process that
would involve a simple initial submission, followed by a more
asserted effort to collect additional information with the guidance
of claimant assistance personnel from the Office of the Special
Master.
A number of commenters had suggestions as to how the Special
Master might assist claimants both in filing claims and completing
the claims process. Many suggested that local offices be established
in New York City, Washington DC, Pennsylvania, and other cities that
served as the domicile of victims. Some urged that outreach efforts
be made to locate potential claimants and make them aware of the
program's operations. Some mentioned that outreach should include
multi-lingual assistance and publications. One group suggested that
each Hearing Office have an Applicant's Assistant. Others suggested
the Special Master hire victim advocates to assist claimants
throughout the process.
The Claims Evaluation Process
The Department solicited comment on whether every claimant
should be granted an oral hearing or whether paper hearings may be
sufficient, and what types of oral hearing might be practicable in
light of the statutory time frames.
Further, the Department sought comment on how evidence might be
established and whether it is authorized to enforce requests made by
the hearing officer to third parties for evidence that is necessary
to a proceeding (e.g., evidence that might bear on whether all
aspects of the claim file on which the decision will be based are
accurate and complete). The Department sought comment on whether
such proceedings should be recorded, whether such proceedings should
be held in a location convenient to the claimant, how to deal with
scheduling conflicts, and whether the opportunity for a hearing can
be waived by a claimant through inaction or unwarranted delay.
Many commenters had opposing views on the role hearings should
play in claims evaluation. Some commenters--comparing this program
to civil litigation--viewed the hearings as essential to each and
every claim. These commenters recommended hearings as a sort of
``mini-trial,'' which would include rules of evidence (albeit
relaxed rules) and adversarial questioning of witnesses. Using the
same analogy, however, these commenters suggested that many claims
could be ``settled'' based on only the paper submissions. Other
comments suggested the hearings be more akin to an opportunity--for
those claimants who want to exercise it--to make an informal oral
presentation of their cases. They viewed the hearing as an
opportunity to ensure that the decision maker was aware of their
individual circumstances. Many of these commenters also suggested,
for various reasons, that not all claimants would want a hearing.
Some commenters suggested allowing claimants, upon filing a claim,
to elect among different ``tracks''--one that would involve a
hearing, and one that would not.
On the question of who should be hired as hearing officers,
suggestions included retired trust executives, retired judges,
attorneys experienced in handling high volume caseloads, and those
experienced in civil litigation. Some commenters recommended there
be a panel of hearing officers rather than one hearing officer. A
number of commenters also recommended that claimants have the
opportunity for review of their award to ensure that the decision
maker was aware of their individual circumstances.
Many commenters submitted detailed procedural suggestions for
the claims process. Among other things, these suggestions dealt with
how eligibility and damages could be established through the use of
affidavits under penalty of perjury in the event relevant documents
had been lost as a result of the crashes themselves (e.g.,
designations of beneficiaries maintained by employers).
Additionally, a number of commenters suggested the Special Master
have the right to subpoena evidence required to make a
determination.
Awards Under the Fund
(1) Meeting the 120-Day Deadline
The Department invited comment on what means and mechanisms
could be implemented to allow just compensation within the
statutorily-mandated 120-day period for processing claims. In
particular, the Department sought input on whether and how
statistical methodologies should be developed and used as a starting
point for decision, and whether publication of hypothetical or
presumptive awards for classes of individuals would assist potential
claimants in determining whether to opt into the Fund. For the most
part, these comments were encapsulated in discussions regarding the
calculation of damages; namely, economic and noneconomic losses.
(2) Calculating ``Economic Losses''
The Department sought specific comment on how the Special Master
should determine ``economic losses.'' Although retaining experts is
certainly not prohibited, the Special Master will not require any
claimant to obtain legal counsel or other experts to assist in
proving or presenting evidence of damages. The Special Master may,
however, draw on available information from appropriate specialists
in relevant fields to analyze economic losses. The Department
invited comment regarding the necessary qualifications for such
specialists, the data that should be utilized, the methodologies
that should be employed, the documentation that should be required
for every claimant, and how state law should bear upon such
determinations. In addition, the Department invited comments on how
to address the economic losses of individuals whose lost
[[Page 66290]]
future income streams would have been highly contingent, variable,
or unpredictable.
As expected, the range of comments on how best to calculate
economic losses was widely varied. One group suggested a minimum
value be calculated based on median income and remaining years of
work, with flexibility to adjust the award after hearing all the
evidence in individual cases. Similarly, certain comments suggested
the use of a grid would be appropriate in certain circumstances to
identify presumed awards. Others urged that no type of grid be used.
In terms of presumptive valuation, a few commenters recommended
that awards mirror the amount a party could anticipate receiving
from personal injury or wrongful death actions. Others disagreed.
Many recognized the limited opportunities now available to potential
plaintiffs filing claims in civil courts arising out of the
September 11, 2001 terrorist attacks. At least one commenter argued
that the fairest approach in determining economic losses is that
which insurance companies use in settling claims.
Some commenters indicated that economic awards should not be
based on differences in individual income prior to the crash. Some
suggested using a flat dollar figure per surviving family member
(e.g., $250,000 for each survivor). Another suggested a flat amount
for death at $100,000, injury at $50,000, and various other losses
at slated dollar figures. On the other hand, some commenters felt
the purpose of the program is to act as a substitute for civil
damage actions, and that efforts should be made to determine and
take into consideration the amount of income likely lost by a
decedent. A large number of comments were received with respect to
how to establish such income (e.g., average over a certain number of
prior years, plus information supplied by employers on future
prospects).
(3) Calculating ``Noneconomic Losses''
The Department also sought comment as to ``noneconomic losses.''
Most notably, the Department invited comments regarding whether, and
in what manner, the Special Master can or should draw meaningful
distinctions between both those victims who died in different
locations and those who suffered similar injuries. The Department
also invited comments on whether the Department should (as some have
suggested) issue regulations determining the amount of noneconomic
loss for classes of similarly situated individuals or whether,
instead, the Special Master should determine all noneconomic loss on
a detailed claim-by-claim basis. Further, the Department requested
comment on what facts and circumstances should be considered in
determining noneconomic losses for each individual, and what
standards should be employed.
Comments regarding noneconomic losses were similarly varied. One
commenting association suggested noneconomic losses--such as pain
and suffering--should be standardized because such losses do not
vary by income strata. Numerous commenters advocated a ``fixed''
noneconomic award, stating that the government should not attempt to
draw distinctions in the amount of pain suffered by victims or their
survivors. One commenter suggested the most equitable process for
determining noneconomic awards would be an elective process. Under
this proposed method, a claimant could elect to have the award
calculated by use of a matrix, or alternatively, could present
evidence at a hearing to establish the amount to which the claimant
believes he or she is entitled. A number of commenters argued that
the statute necessitated an entirely individualized determination of
noneconomic losses in every case. A group representing survivors of
decedents suggested that noneconomic losses must be uncapped and
based, in part, on the number and age of any surviving children or
dependents, the current and future pain and suffering experienced by
the victim's family, and the severity of pain suffered by the victim
himself or herself.
(4) Taxation
A number of commenters raised questions about the taxability of
various kinds of awards issued under the Fund. Several commenters
asserted that compensation from the Fund should be nontaxable under
federal law, similar to various types of tort awards. Another
commenter stated that state victim compensation fund awards
generally are not taxable, either by the state or the federal
government. On the other hand, another commenter stated he did not
see the purpose of distributing taxpayers' money to victims, and
urged taxing the awards so as to return some of the money to the
Treasury.
Collateral Sources
The Department sought comments on the issue of collateral
sources. Although the Act requires that collateral sources be
deducted from awards issued under the Fund (and explicitly outlines
examples of certain types of collateral sources), the Department
invited comment as to how the term ``collateral source'' should be
defined.
(1) General Comments
Despite the explicit language in the Act, a number of commenters
took issue with deducting any collateral sources whatsoever.
Although many recognized that both the Department and the Special
Master are bound to follow the language in the Act, they nonetheless
argued that collateral sources are--in many states--not offset in
wrongful death suits. Some urged that the type of collateral source
offsets should be interpreted narrowly. A number of commenters also
suggested that if collateral source benefits to a victim are to be
offset, a counter-offset should be made for the premiums or
contributions made by the victim to purchase various benefits.
Others specifically suggested that only the value of collateral
benefits funded by a victim's employer should be offset.
Many commenters, however, asserted that the program should not
``unjustly enrich'' the victims or their survivors, and supported
the use of widespread offsets. Some of these comments mentioned
that--although the statute does not provide either a ceiling or
floor for the amount of awards--the Fund may have only a limited
pool of resources to distribute to claimants (akin to the funds
being collected and distributed by charitable organizations), and
suggested the need to help those most in need. Other comments noted
that unjust enrichment should not flow through tax-payer dollars. It
was mentioned that many taxpayers--who ultimately will provide the
funds under the program--also sent in charitable contributions not
to unjustly enrich victims or their families, but, rather, solely to
help them through these troubled times.
(2) ``A claimant has received or is entitled to receive''
Some commenters specifically focused on the word ``claimant'' in
the phrase ``a claimant has received or is entitled to receive,''
and urged that any collateral source benefits not paid or to be paid
directly to the claimant not be deducted from the award. These
comments were often parallel to those concerning the question of
whose losses are to be compensated under the Fund: only those of the
decedent (estate), or those of others as well. (See the discussion
of Eligibility.)
A number of comments also focused on the words ``entitled to
receive.'' Some recommended that only those collateral benefits
scheduled to be paid as a result of contractual or other clear
obligations should be deducted from an award. Others recommended
that only the present value of any future contingent awards be
considered in making any offset.
(3) Life Insurance
Many commenters were frustrated that the Act requires life
insurance proceeds to be deducted from awards. Many asserted that
deducting life insurance will penalize those who planned ahead. One
suggested that life insurance should only be offset if payable to a
dependent of the victim, and another group of commenters indicated
that only the sums received by the eligible applicant net of all
taxes that exceed the premiums--or other payments made by the
applicant--be deducted. A number suggested that if life insurance is
to be offset, the premiums paid should be returned to the victim by
reducing the amount of the benefit offset.
(4) Pensions
While similar concerns (as to life insurance) were raised in
connection with pensions, a more common comment concerned the
meaning of the term ``pension.'' For example, some commenters noted
that pensions are not normally considered to be ``compensation for a
loss'' but are instead akin to savings.
(5) Workers Compensation And Victim Assistance Programs
One commenter pointed out that most of the victims may be
eligible for workers' compensation benefits because they were killed
while on the job. Further, with respect to those receiving benefits
under New York law, the compensation insurer can terminate workers'
compensation payments--absent claimants obtaining consent to enter
the Fund--if benefits are being paid to the injured workers or
survivors. New York State legal authorities confirmed the
noteworthiness of this issue, and
[[Page 66291]]
recommended that workers' compensation payments not be considered a
collateral source to this extent.
With respect to state victim assistance funds, one commenter
noted that 42 U.S.C. 10602(e)--which generally provides that state
crime victim boards may refuse to pay out benefits if another
Federal program is paying benefits--was explicitly amended to
exclude payments made under the September 11th Victim Compensation
Fund of 2001. The commenter suggested that some programs covered
under that code provision--that have already made payments--may be
entitled to reimbursement as a result.
(6) Charitable Contributions
Many victims of the terrorist-related crashes on September 11,
2001, have or may receive support from special funds set up to
assist them, as well as from special programs established by some of
their employers to share future profits and the like. Accordingly,
whether to reduce Fund awards by the amount of such contributions
was one of the issues given the most attention in the comments.
Notably, this issue was discussed in a number of news articles at
about the time the Notice of Inquiry was issued.
Commenters were heavily divided on this issue. Many were
strongly opposed to reducing awards by the amount of charity funding
received. This includes some commenters who donated to charities
established for this purpose, as well as employers who established
funds to help the families of the victims. Many insisted that funds
collected by employers solely for the purpose of compensating
victims of the September 11 attacks should not be deemed a
collateral source. Many drew a distinction between funds provided
for short-term assistance and need, and those designed to compensate
victims for their losses.
On the other hand, a number of comments from those who
contributed money to various charities viewed the purposes of the
charities and the Fund as one and the same; namely, compensating the
victims. These commenters asserted they had not intended making
contributions to unjustly enrich the families, and would hesitate to
make such contributions in the future if their help turns out only
to ensure persons maintain a certain lifestyle.
A number of commenters also pointed to the practical
difficulties of trying to establish what claimants may have received
from charities. Some suggested the Fund should have access to any
database of charitable contributions, including one that was
reported to be under consideration in New York.
After discussing these factors, some commenters suggested that
the Special Master only offset charitable contributions over a
certain amount. A few commenters suggested only offsetting charities
set up for longer term assistance to the victims (e.g., tuition
funds or scholarships for the children of all the victims).
Payment of Awards
Some commenters expressed the view that payments by the fund
should be in the form of ``structured settlements'' or annuities
rather than in lump sum. One commenter suggested payments to
children should go to a trustee for the benefit of the child.
However, other commenters argued for lump sum payments and objected
to the government placing any restrictions on the claimants' award.
Limitations on Fees for Assistance And Payment by the Special Master
The Department requested comments on whether the Special Master
has the authority to limit the types and amounts of fees that can be
charged by counsel, accountants, experts or others who are retained
by claimants to assist them to file and pursue compensation claims,
and whether such fees can and should be paid by the Special Master
directly out of compensation awards. The Department also solicited
comments on what limitations, if any, the rules should impose on
non-attorney, non-claimant representatives' participation in filing
claims.
A number of commenters noted that the right to be represented by
counsel is provided by the statute, that not all claimants would be
comfortable using pro-bono counsel to represent their interests, and
that payment of attorneys' fees is necessary to ensure
representation by counsel of choice. Some of these commenters
suggested, however, that fees could be limited so as not to exceed
10% of the award to claimant. Paradoxically, some commenters opposed
using any amount of money from the Fund to pay legal fees.
[FR Doc. 01-31681 Filed 12-19-01; 4:09 pm]
BILLING CODE 4410-12-P