9/11 Special Master Dishes on Fund Administration

BY ERIN ARCHERD

Special Master of the 9/11 Victims’ Compensation Fund Kenneth Feinberg shared his impressions at the October 11 Program on Negotiation Dispute Resolution Forum. After a brief plug for his new book, “What is Life Worth?: The Unprecedented Effort to Compensate the Victims of 9/11,” Feinberg spoke about his involvement with the fund and why he believes the development of such a fund will never happen again.

The 9/11 Fund was established 11 days after the attacks. The bill authorizing the fund passed after only 5 hours of debate. Anybody who lost a loved one in attacks or was physically injured to voluntary could decide to opt into a program and get paid, thereby giving up their right to be paid by domestic tortfeasors – companies like Boeing, the New York Port Authority, or Mass Port.

Feinberg noted that the bill left a lot unspecified.

“Interestingly, the law said very little about who, how much, why, and how people get compensated. Congress delegated all that to a Special Master.”

Congress was reluctant to discuss the decisions that would have to be made in implementing the fund. According to Feinberg, Tom Daschle told him, “We don’t know how to do this. Do you think we’re going to debate what a life’s worth?”

There were a series of problems the fund, as created by Congress, presented. First, the award formula considered the potential earnings of the victim over a lifetime.

“The stockbroker’s widow will get more than a fireman’s widow,” exclaimed Feinberg, “I’m just following the law, [but] tell that to a grieving widow or widower. No standardized award. That was problem number one.”

Second, he had to come up with a noneconomic loss award, which he quickly set at a standard $250,000 for the victim and $100,000 for each widow and dependent.

Third, “Congress threw a curve ball” and required the special master to deduct collateral sources of income like life insurance. Feinberg gave an example of a typically indignant claimant:

“Are you telling me because I was responsible and my neighbor blew his life insurance on a trip to Vegas, I’m getting less?”

The special master also had discretion to see that justice was done. Calculating economic loss and eligibility for rewards were the most difficult areas to settle. Even though the fund had great statistics at its disposal, few were willing to project anything less that the most stellar careers for their dead loved ones. He gave the example of a parent whose daughter was a first year associate at a firm in the World Trade Center.

“Don’t you dare put my daughter’s salary as [a] first year associate” the parent told him. “She was going to be a partner with her name on the letterhead.”

Only 20% of the victims had wills. In deciding eligibility for claims, he had to deal with brothers, sisters, fiancés, and same sex partners. Most of the same sex partner awards were worked out in mediation.

The fund granted all requests for hearings and about 40% of all applicants, approximately 7,000 people, wanted one. Feinberg held about 1,500 individual hearings. The hearings took an incredible toll on Feinberg and his staff, and he was surprised by the tone and content of the meetings, concluding he would have been better off being a rabbi or a priest rather than a lawyer.

You would think people would come and clamor for more money,” he observed. “The number who came to see me about money infinitesimal. [Many] came to talk about life’s unfairness. ‘Mr. Feinberg, I’d like to show you a video of our wedding, albums, ribbons, medals. I’d like to play an audiotape of my husband screaming that I kept on my machine and I want you to hear what those murderers did.’ [The hearing was about] validating the memory of a lost love one.”

He told a series of heart wrenching stories about the victims and their families. One award had to be rushed because the surviving widow had eight weeks to live and wanted her two children to be taken care of. A person jumping from the upper floors of the towers crushed a fireman. A son died when he went back into the Pentagon to look for his sister, who had already escaped. Some stories were both tragic and perplexing.

“A lady comes to see me crying, sobbing,” Feinberg related, “[She said,] ‘My husband left me with three kids. He was Mr. Mom, taught the kids, an amazing cook. He was my best friend.'”

Feinberg paused, and continued with his story.

“The next day I get a phone call from the lawyer in Queens, who said ‘Mr. Mom had two other children from his girlfriend and I represent the girlfriend and two kids.’ Now, do you tell the wife about the two kids in Queens? I’m sure today she knows, but at the time, I didn’t tell her. Who am I to tell her? We cut two checks and sent them out.”

Despite all the potential problems, 97% of all eligible participants entered the fund. There are only about 40 people currently litigating claims in federal court, and 11 people who have done nothing. Feinberg was especially puzzled by those 11.

“I met with most of those people and learned a valuable lesson in how grief can paralyze people. I’d offer to help people. It was hard for me to fathom. 11 people gave up their right to get on average $2 million tax-free.”

There were also many people who felt that it was unfair for the fund to compensate for the 9/11 attacks and not other events, like the Oklahoma City bombings, the attack on the USS Cole, or even the previous bombing in the basement of the World Trade Center. While Feinberg felt the fund was justifiable and exhibited the “character and generosity of our country,” he concluded that Congress will never create another such fund.

“It was a unique historical response to an unprecedented event.,” he said. “9/11 is an aberration, a precedent for nothing. Ending the tort system isn’t going to happen… Congress didn’t show the slightest interest in a fund for the Katrina victims.”

At the conclusion of his speech, Feinberg accepted questions from the audience. One person asked Feinberg about the role of his family and faith in overseeing the fund.

“I think faith and my Jewish heritage had more to do with how I approached the families,” he replied. “My faith helped me appreciate the underdog.”

However, it also led to confusion.

“The biggest single source of grief was that there was no body returned. In Judaism, the body doesn’t really matter. I had trouble relating to no cemetery to visit, but the absence of the body set families off more than anything.”

Another audience member asked Feinberg to say more about Congress’ reaction to Katrina. Feinberg has been working on settling insurance claims in New Orleans.

“Congress has no interest in duplicating the unique 9/11 Fund,” he explained. “I don’t think Congress feels it’s appropriate to single out individual victims.”

He detailed other types of compensation systems in his response.

“Workers’ compensation has been on the books for 115 years. You don’t sue your employer [and] you’ll go into a no fault system. Or, if you’re the descendent of a Japanese American interned in California or New Mexico, you got a check for $20,000 and an apology. Those types of funds are all funded by the potential tortfeasor and/or pay little. In 9/11, you got a check for $2 million and no apology. Congress said it was gratis, to prevent people from suing the airlines.”

He said the chances of a similar fund were nil.

“You won’t know for sure until or unless something happens, but after 9/11 [Congress] tried to amend to add the embassy bombings in Kenya and OK City, and it didn’t get out of committee.”

In his answer to a final question about the role of emotions in administering the fund, Feinberg said, “I was glad I did it and would do it again.”

More information on the Program on Negotiation Dispute Resolution Forum can be found at http://www.pon.harvard.edu/education/drf.php.

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