Agony And Equity

Recovery workers load human remains on to carts as cleanup and recovery efforts continue at the site of the World Trade Center disaster in New York, Sunday, Dec. 23, 2001. Rescuers who volunteered to work on the holidays will continue searching the World Trade Center ruins for human remains on Christmas Eve and Christmas Day, Mayor Rudolph Giuliani said Sunday. AP

CBSNews.com Legal Analyst Andrew Cohen takes a critical look at the decisions that went into the options facing survivors of the Sept. 11 terror victims, and the difficult choices those families now face.


Let's dispose of the obvious. First, no legislation is perfect. Second, no amount of government largesse could ever fairly or fully compensate the victims of Sept. 11 - the living and the families of the dead - for what they've gone through these past few months. Third, the Air Transportation Safety and System Stabilization Act of 2001 was always intended and designed to be more about saving the airlines and, more importantly perhaps, their shareholders, than it was about saving the economic futures of the thousands of familes torn apart by the terror attacks.

There. Now we can look at least preliminarily at fascinating policy choices Congress and the Bush Administration have made about how all those public dollars are going to be doled out via the "September 11 Victim Compensation Fund of 2001."

What they've done, collectively, is decide to significantly help some victims at the expense of many other victims, who have now been forced into an unpalatable choice between unsatisfactory (or no) compensation from the government now or award-limited litigation later. And what they've done, by essentially using government funds to distribute wealth unequally in order to equalize wealth, seems almost socialistic in its effect. Quite the irony, of course, from an administration which finds socialism abhorrent in so many forms.

As you probably know by now, Special Master Kenneth R. Feinberg last week outlined the rules that, at least for now, will govern distribution of those proceeds to specially designated "victims" of Sept. 11.

A complex formula was created - many reporters and analysts unfairly called it a formula to determine the "value of a human life" - in which some people are slated to get a couple hundred thousand dollars from Uncle Sam and some are slated to get a couple million just as soon as they complete the requisite bureaucratic forms. The whole plan was presented to the American people with a sort of "sorry, but this is the best we can do, folks" humility which belies its cutthroat approach.

Such as the many catches contained in both the Act and the Fund. In order to get the money right away, willing "claimants" must sign a release declaring that they are willing to give up their right to sue the airlines that arguably failed to protect everyone on Sept. 11.

Keep in mind that Congress also provided - in the airline industry bailout package - that victims who choose to opt out of the plan and sue the airlines face damage limitations which protect United Airlines or American Airlines from having to shell out more than the extent of their liability coverage at the time of the attack. No Exxon Valdez verdict here, Congress assured. No multi-billion-dollar awar given by some irate jury.

Knowing that there is a limited, finite amount they will have to pay as a result of any and all lawsuits gives the airlines an enormous advantage in any future litigation. It also reduces pressure on them to settle while at the same time making it less palatable for any single litigant to be willing to go all the way to trial.

So if you are a legislatively classified "victim" you have two choices: accept the fund payment - whatever it may be - or take your chances in court even though the legal system's playing field has been tilted in favor of airline defendants.

Indeed, as a not-so-subtle warning to take the deal he is offering, the Special Master's "statement" begins by reciting a litany of litigation uncertainties, some of which are overstated and some of which were actually made worse by Congress when it passed the Act. Be thankful for whatever fund money you may receive, the Special Master is telling "victims," because there will be no pot of gold at the end of legal road.

"To succeed in the courtroom," Feinberg wrote, "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?"

Such corporate protectionism disguised as governmental paternalism would be much more palatable - or at least less significant - if the Fund itself gave few people incentives to choose the litigation path.

But, alas, it is not to be. If you really want to savor the stark choices made by Congress, by the President, by the Attorney General and in a smaller way by the Special Master, check out the "collateral sources" rule, which is certain to garner the most attention as this debate continues into the new year.

Under the Act, the amount of compensation each claimant may be awarded "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 terror attacks.

That means that if a husband and father who died in the World Trade Center had planned ahead to care for his family by buying life insurance or contributing to a pension fund, the proceeds from those funds would be deducted from any government award.

And that means that in some cases - if there was enough life insurance or pension assets - the families of victims will get not a drop from the September 11 Victim Compensation Fund of 2001.

Is that fair? Congress thought so.

Congress thought that some World Trade Center or Pentagon or Shanksville victims were wealthy enough on their own without needing any addititional comensation from the government, compensation which now can go to other victims who are less fortunate.

In making this choice, Congress choose to ignore a common rule that "collateral sources" like pension funds and insurance proceeds are not usually offset in wrongful death lawsuits brought by the family members of victims. And in affirming Congress' choice, the Special Master chose to avoid making a rule which would allow the families of these victims to counter-offset any and all insurance or pension premiums made by the deceased victims.

Moreover, neither Congress nor the Special Master were willing to consider vested pension-plan money as "savings" which would exempt it from being counted against a government payment. Apparently, both Congress and Feinberg were swayed by the argument that to do otherwise would either "unjustly enrich" some victims or would be too much of a drain on the limited resources of the fund.

Would taxpayers be "unjustly" enriching the families of victims who had set aside from insurance or pension proceeds? I suppose it depends upon what your definition of "unjust" is.

But since government officials spent so much time explaining how difficult it was for them to come up with the formula to value human life; since everyone seems to agree that the value of a human life is objectively unquantifiable; and since collateral source exemptions have been around in the law for decades, you would think that the government could have and should have come up with a plan out of its own self-interest which would give every single qualified family a minimum amount from the Fund irrespective of whatever "collateral sources" of income they may have.

The families of "poorer" victims should get their "full" amount - whatever it is under the formula - and the familes of "richer" victims should get perhaps a smaller amount but at least something.

And that "something" might actually act in some cases convince those who now are most likely to sue to let it go, since their additional Fund award might actually equal or come close to whatever they might win in court.

And if this plan cost a little more than the current one, perhaps Congress and the Administration could go back to their friends in the airline industry and call in a favor. After all, it's not like the industry doesn't owe them one.



By Andrew Cohen © MMI, CBS Worldwide Inc. All Rights Reserved
  • CBSNews.com staff CBSNews.com staff

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