The Fund is Fixed!
Updated: December 1, 2003
The previous edition of this page is available here.Mr. Wolf's Submission Letter to Mr. Feinberg.
What is the Current Situation?
Bad News Travels Fast, Good News Takes a Little Longer
File Part I. a., Even if You Might Sue
So, You Like Cross-Country Driving?
But the Insurance Deductions Bring Me Down to the Minimum
The “Pain and Suffering” Award is Insultingly Low
Make Sure Your Case Is Not Their Only One
Money From the Fund is “Blood Money”
Dear Fellow 9/11 Family Members,
Fix the Fund is an advocacy organization whose sole purpose is to fix the problems in the September 11th Victim Compensation Fund of 2001 (the Fund or VCF). I should also like to take this moment to tell you that I lost my wife, Katherine Wolf, on September 11. She worked for Marsh & McLennan on the 97th floor of Tower 1 (the North Tower).
What is the Current Situation?
With less than one month left before the Congressionally mandated deadline of Monday, December 22, 2003, only 60% of the deceased victims’ families have submitted an application to the Fund. The probability of Congress passing an extension is very, very low! There are many probable reasons why the application rate is so low this late in the game. They are, in no particular order:
1. Continued grief, resulting in inaction
2. Collecting the required back-up documents for submitting the application to the Fund
3. Managing more pressing concerns, such as employment, housing, and other family matters
4. The need for more time to understand the Fund's application process
5. Finding effective legal assistance (there have been attorney problems)
6. Uncertainties about the distribution of the award amongst family members
7. Litigation uncertainties
8. Anger with the U.S. Government over not preventing the attacks
9. Anger with the Special Master over his early-in-the-game attitude towards victims families
10. Dissatisfaction with the presumed or predicted award amounts
11. Dissatisfaction with the mandated deduction of insurance and government payments from the awards
Much has been written about the Fund and its Special Master, Mr. Kenneth Feinberg. Because Fix the Fund has fueled the negative opinion about the Fund amongst victims’ family members by speaking out on its problems, now, it is very important that you know that there have been major improvements. Mr. Feinberg has adjusted both the way he runs the program and his attitude, in a positive direction.
Bad News Travels Fast, Good News Takes a Little Longer
Many of the problems with the Fund have been fixed, although there have been no announcements to that effect. To have such an announcement would be tantamount to publicly admitting there were problems to begin with, and the United States government does not like to admit they did anything wrong. (Does anybody?) There is also the issue of bringing the whole issue of the Fund back up in the public eye across the entire U.S., which would be problematic as the Oklahoma City bombing victims did not get such a fund. (There were no critical industries to protect from lawsuits.) So, you shall have to go by what I will tell you in the paragraphs below.
File Part I. a., Even if You Might Sue
I’ll start by saying I encourage each and every 9/11 victim’s family to participate in the Fund. It is very easy to meet the deadline by mailing in “Part I. a.” of the Fund application immediately; it is a one page form that you can easily fill out on your own without a lawyer. (Even if you have a lawyer, if things aren’t moving along well, send it in on your own anyway.) It asks the victim’s name, address, telephone, Social Security number, and your Social Security number. You don’t sign anything, so you aren’t committing yourself to the Fund. Therefore, if you are not sure about participating in the Fund, you can change your mind and withdraw the application to participate in a lawsuit. (But, please read below about the wisdom of choosing the Fund over suing.) Here is a link to a PDF form. Part I. a. is the first page, that is all you have to fill out now. Everything else can come later..
Deceased Victims Application, Part I.
The important thing is to get this one piece of paper in to the Fund by December 22, 2003. If you haven’t made a final decision, send it in anyway as a placeholder. You can always withdraw, but you cannot get in after Dec. 22, 2003.
Now, I’ll talk about what has changed and why.
So, You Like Cross-Country Driving?
It is worthwhile to understand the real reason the Fund was established, as that may make it easier to consider participation. Shortly after the attacks, American and United airlines were handed their 30-day insurance cancellation notice, this being due to the potential threat of lawsuits against them and others. Under U.S. law, one can sue based on the “contributory negligence” theory of law as well as “intentional harm” theory. In this case, it is the former that the airlines could be sued on. With no insurance, the financiers of the aircraft who lend the airlines money for their planes would demand that they be grounded. So, in one fell swoop, America’s two largest airlines are totally out of business. In terms of passengers, cargo, and airline employees, this alone would have been a national crisis with international repercussions.
But there was another crisis that would have been created. Because Boeing, the manufacturer of the aircraft, and all the subcontractors who contributed in the making of those aircraft can also be made liable under U.S. tort law, the stocks of American Airlines and United Airlines, as well as these other companies would have been pummeled. This would have carried over to the entire Dow Jones transportation and manufacturing indexes and that could precipitate a world financial crisis.
For these reasons, legal protection had to be set up around the airlines limiting their liability; in this case, Congress chose the amount of liability insurance the airlines carried. When Congress did that, it reduced or deprived the victims or their family of their right to seek redress of damages. This would run afoul of the Constitution’s guarantee of the right of due process and also, equal protection under the law. If they didn’t do something to replace the lost rights, the entire airline bailout package could have been challenged in court and thrown out. There were also moral and sympathy considerations involved, but the creation of the VCF was primarily one of legal necessity.
The condition for joining the Fund is that one must waive their right to sue the airlines, and most other U.S. entities such as the Port Authority of New York and New Jersey or the airport security companies. If you join the Fund, you do retain the right to sue the terrorists or any foreign entities that supported the terrorists.
Many family members are considering foregoing the Fund and suing the airlines, etc., because they want the truth of why it happened to come out in, what is called, the “discovery phase” of a lawsuit. Others think they will get more money from a lawsuit because they think their award from the Fund will be very small, based on the written regulations. These two areas are where I need to provide you explanation so you can make a well-informed decision.
With regards to “getting the truth out” by being involved in a lawsuit, that will happen regardless of whether or not any one individual participates in the litigation. There are about 69 people suing right now, and it only takes a handful to push that suit forward. There is a strong expectation that several of the 69 will drop out of the suit and join the Fund, but that still leaves a strong number remaining. There are substantial liability hurdles that plaintiffs (the one who sues) must cross before recovering money in litigation. This is true whether a potential plaintiff represents a decedent who was killed in one of the four airplanes or on the ground (which includes those in the Towers). The defendants (airlines, etc.) have attempted to convince Judge Hellerstein to dismiss the claims of Tower and ground victims. Judge Hellerstein ruled against defendants for now, but lawyers representing plaintiffs in the case have advised their clients that defendants will, after the "discovery process" (where they dig out the facts), again attempt to have the claims dismissed on summary judgment (without a trial) and will certainly appeal any adverse rulings (one that goes against them).
Of course, for those victims killed in New York, there is a major risk of having a severly limited recovery even if they win liability because the claims exceed the available insurance due to the high amount of property loss. The "guess-timate" is a recovery of under $0.20 on the dollar. The process will, of course, most likely take many, many years.
But the Insurance Deductions Bring Me Down to the Minimum
The previous paragraph not withstanding, many victims had generous amounts of life insurance, and by law, Mr. Kenneth Feinberg, the Special Master of the Fund, must deduct insurance from the gross award. He has no say in this matter as it was written into the law by Congress. The combination of the low presumed noneconomic damages, or “pain and suffering” award, and the insurance deductions have left many well-insured people relying on Mr. Feinberg’s $250,000 floor to get any money from the Fund. The reality of the matter is not in the written rules, but rather in what Mr. Feinberg is doing in practice.
There has been considerable pressure on the Special Master to change the rules and alter his handling of the Fund. Along with that, he now has much more experience with the September 11th families than when he first started. He may have been the most experienced man in the U.S. in handling mass tort situations, but in the past, Mr. Feinberg had dealt only with victims’ lawyers, and then, did so 15-25 years after the incident. Now, he is dealing directly with the victims’ families and started doing so less than 15 weeks after the disaster. The result is a major change in Mr. Feinberg’s attitude. He is now a more compassionate man and is looking for every legitimate way to increase the awards. He doesn’t always come across that way in groups, but I’ve had conversations with him and I believe he is sincere.
The “Pain and Suffering” Award is Insultingly Low
With regards to the noneconomic damages, he recognizes the extent of pain that both our loved ones and we have gone through. He recognizes that we have gone through much more pain and suffering than could have been imagined when he wrote the Rules and Regulations in November 2001. But, in his words, “it is too late in the day to modify the public rules and regulations of the Fund.” What he is trying to do in individual cases is to increase awards through the exercise of the discretionary power given him in the VCF legislation. In case after individual case, whether it is an appeal from Track A or a Track B hearing, he is listening to claimants so he can honor their requests for an increase.
I know this may seem strange to you, but it is the only way he can do it. The December 22 deadline precludes modifying the rules because of the requirement of a public comment period when the public rules are changed. There just isn’t enough time.
So, what should you do? I suggest you file with the Fund and ask for more than the charts call for. He is very interested in having as many families come into the Fund as possible because of the handwriting on the wall with regards to lawsuits. He sees participation in the Fund as allowing families to “close the door” on a big portion of this mess, which will allow some emotional healing to come sooner. A 10-year court battle might take many older parents right to their grave without any resolution.
Another suggestion I have is do not file on your own. This is an emotional process, and you are unfamiliar with what you should be compensated for. Hire a lawyer, and opt for a paid lawyer rather than a free Trial Lawyers Care (TLC) lawyer. While there are good TLC lawyers doing the work pro bono, or for free, many jumped in to help with all good intentions, but found out later they bit off more than they can chew. If a paying job comes in and the firm needs your lawyer’s time, guess who gets short-changed?
Make Sure Your Case Is Not Their Only One
This is not the simple process that everyone made it out to be in the beginning. Yes, it is non-adversarial, meaning that there are no challenges to what you present. Nevertheless, there are many nuances that, if overlooked, will cost you a lot of lost award money. Hire a lawyer that is doing at least 15-25 other cases. Pay them their small percentage so you will get the attention you deserve and the case presented in the best possible manner.
I would suggest talking to experienced firms, especially New York City firms, that have a good amount of cases. As their earlier cases work their way through the system, they get a “reading” on what works and what doesn’t. There is nothing like experience to help you better prepare the next case. I am working with Kreindler & Kreindler, one of the top firms, because my case is complicated: my wife was my business partner as well as an employee for Marsh & McLennan. I’ve heard good things about Speiser Krause, also. Both firms are in Manhattan. This doesn’t mean other firms aren’t good, I just haven’t had any personal dealings with the others. If you’re with one that you’re comfortable with and has a number of other VCF cases, then I’d stick with them.
The deadline for filing is Dec. 22, 2003; it would take an act of Congress to extend it, and the likelihood of that happening appears remote at this time. The Special Master is staying open through June 14, 2004 to process claims. He is allowing people who are, or think they want to, sue the airlines, etc., to file Part I. a., and make their final decision later on. He just doesn’t want anybody to get locked out because of the statutory deadline.
If you have questions, please don’t hesitate to contact me at cgwolf@fixthefund.org. The Special Master’s office also has a lot of staff that can answer questions, but, again, the best thing to do is hire an attorney.
Money From the Fund is “Blood Money”
Moving away from the world of rules and regulations and legal stuff, I would like to address a more personal, and, perhaps, emotional issue: That is the issue of feeling “guilty” about “profiting” from your loved ones death — that the money from the Victim Compensation Fund is “blood money.” Well, I suppose then that life insurance is “blood money,” too. But before you turn down the money, I’d like to you consider this scenario.
Let’s be conservative and say your “award” from the Fund would be $1 million. And let’s say you are at the craps, or baccarat table in Las Vegas and you are up $1 million and you blow it. Would you be mad at yourself? Would you kick yourself all the way home?
That is exactly what you are doing by turning away from the Fund. Nothing is going to bring my Katherine back, nor will your loved one come back. Life has changed. But you have this one chance to get a pot of money and do something wonderful with it. Properly invested in a bond portfolio, $1 million would pay $47,000 annually in interest income. That could pay for retirement, provide health insurance for several people or help pay off debts. (The investment management firm I am using has impecible credentials. Contact me if you’d like their name.)
Or, you could set up a foundation in your loved ones name, donate it to a religious institution, or help the less fortunate. My point is, this is an opportunity you will throw away if you don’t apply.
Do you play the lottery? Here is a sure thing.
Think about it.
I hope this information helps you make an informed decision
My Very Best Wishes,
Charles G. Wolf
Founder, Fix the Fund
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The previous edition of this page is available here.