Victims' law: Blank check, or worthless?

Measure enacted days after terrorist attacks clouded with questions

10/28/2001

By MARK CURRIDEN / The Dallas Morning News

Just nine days after the terrorist attacks on America, Congress passed an unprecedented law promising to pay "full and fair compensation" to every victim's family.

Drafted, debated, and approved in less than 24 hours, it was signed by President Bush the next day.

Now the speed with which lawmakers acted is starting to show.

The measure is so riddled with unanswered financial, legal, ethical, and procedural questions that some lawyers, scholars, and judges who have been poring over its language for a month say they still can't determine how it will work.

"This law is a very vague attempt by Congress to do something very good," DePaul University law professor Steve Landsman said. The problem will be putting it into action, he said.

Depending on how critical questions are answered in coming weeks, experts say, the law could be almost useless to families trying to recover monetary losses – or effectively turn into a blank check drawn on the U.S. Treasury.

It will be "the most amazing new development in tort [damage] law we've ever experienced or ... a completely empty promise," said Robert Clifford, a Chicago lawyer who is chairman of an American Bar Association task force studying how to implement the law.

Congressional leaders defend the law, though most said they would prefer to have had more time to develop it.

"It's the right thing to do," said Senate Majority Leader Tom Daschle, D-S.D. "How can we extend the safe arm of the government to large airlines and not do the same for the victims and their families?"

Congress' aim was to avoid the long, costly, and unseemly ritual of lawsuits and trials that typically follows a huge disaster. To do that, it created a hybrid alternative court that is supposed to quickly pay – without trials – death and injury claims arising from last month's crashes of jetliners into the World Trade Center, the Pentagon and the Pennsylvania countryside.

Potential plaintiffs don't have to use the program. They can file civil suits in the normal fashion against defendants such as airlines, airport security companies, and even terrorist groups.

But if they choose the new plan instead, they don't have to prove blame – only their losses – and are guaranteed payment within 140 days. In exchange they give up the right to appeal or go to court later.

The problem, many experts said, is that lawmakers laid down broad outlines for the system but skipped over a number of major issues, including specifics on organization, finances, structures, and operating rules. For example, the law:

• Sets no floor or ceiling on individual awards or the government's total payout. By some estimates, claims from survivors of the 16,000 people killed or injured could add up to tens of billions of dollars.

• Doesn't appropriate money to run the system, which will need scores of judges and clerks, plus office space, computers, phones, and supplies. It is supposed to be operating in late December.

• Leaves to the Justice Department the critical selection of a head judge, or "special master," whose decisions can't be appealed. It also delegates the writing of rules covering who can file and how claims will be decided.

• Makes no allowance for where people who use the system live. All cases will be handled at a single New York City location.

Despite such gaps, the law has already achieved at least one of its goals: potential plaintiffs – from the families of passengers on the planes to firefighters injured on the ground in New York – are apparently putting lawsuits on hold until the confusion clears.

To date, only one suit has been filed, and that is against Osama bin Laden, not an airline. Usually, multimillion-dollar lawsuits appear within days of air crashes.

The law was passed as an afterthought in September. At the time, congressional leaders were focused on scurrying to approve a $15 billion airline industry bailout bill. Mr. Daschle insisted on separate legislation to compensate victims and their families.

The plan was drafted by a handful of congressional leaders, debated and redrafted – all from 11 p.m. to 3 a.m. in a conference room adjacent to the office of House Speaker Dennis Hastert, R-Ill. Later that morning it passed both chambers without dissent. Mr. Bush signed it the next day.

Several senators and House members complained later that they weren't given time to read the measure before they had to vote.

"We did the best we could with the time we had," said Sen. Charles Schumer, D-N.Y. "No question, we should have given more thought and precision to this."

Mr. Daschle said that Congress could revisit the legislation if the spirit of the law were somehow misunderstood or thwarted.

And, he said, the Democrats are showing their "spirit of bipartisanship" by trusting the details of implementing the law to Attorney General John Ashcroft.

No money

Specifically, the statute obligates the government to pay the economic losses of those killed or injured in the Sept. 11 attack, including lost future wages. It also covers noneconomic damages – from pain and suffering and mental anguish to loss of companionship.

In court, those kinds of losses can yield jury verdicts and settlements ranging from a few hundred thousand dollars to many millions.

Legal experts said that with no monetary ceilings and no need to prove someone else liable, the law effectively created a government "entitlement program" similar to Social Security or a lesser-known plan for coal miners with "black lung" disease.

The law is silent on long-term funding for the staff, space, and equipment needed to handle what could be thousands of cases. Over several years, those expenses could reach tens of millions of dollars.

In the regular federal court system, the average judge handles about 40 active cases a year, each taking about three years from start to finish. By contrast, each case handled under the alternative claim system must be decided in 120 days or less.

That could force the hiring of 150 temporary judges, court officials estimate.

Moreover, "Someone is going to have to figure out how many computers they are going to need, how many pencils, ink pens, file cabinets, computers and desks," said an official at the Administrative Office of the U.S. Courts.

"This is not going to be cheap, and it's going to require some office and court management expertise," he said.

Awaiting the rules

Congress handed the job of designing the procedures to U.S. Attorney General John Ashcroft – a decision that immediately made many lawyers and victims' rights groups edgy. They note that Mr. Ashcroft, as a lawmaker, established a record of opposing large awards in lawsuits.

By Dec. 21, Mr. Ashcroft is required to issue detailed rules for the presentation of evidence and standards for the awarding of money.

"The drafting of the regulations is under way," Justice Department spokesman Charles Miller said. He said the department hopes to publish for review a rough draft in the next two weeks.

The rules form the heart of the plan, lawyers and scholars say. And some are disappointed that the attorney general isn't seeking their advice.

"There has been no outreach ... on an issue in which we happen to have great expertise," said Larry Stewart, past president of the Association of Trial Lawyers of America.

Mr. Clifford of the bar association task force said the ABA also has offered assistance but hasn't received a response.

A Justice Department spokesman said he didn't know if any groups had been or would be consulted.

So far, "We are totally at the mercy of the attorney general," said John Howie, a Dallas lawyer advising several victims' families. "He can devise rules that make it easy or extremely difficult for victims to prove their losses. Which way he goes will determine the success of the program."

For example, the rules should allow claims from victims' parents, children, and possibly others in addition to spouses, some lawyers say. In-person testimony should also be permitted to supplement written filings, they say.

"The worst thing that could happen is that the attorney general drafts Draconian rules simply in an effort to keep awards low," Mr. Stewart said.

The law doesn't provide victims or their lawyers an avenue to object to the fairness of the rules. And that has some judges scratching their heads. Two federal judges based in New York said they were dreading the legal challenges they are certain will come.

"This statute is so nebulous, so abstract that it is going to be a nightmare for us to interpret," one judge said. "Congress states what it wants but totally abrogates its job of determining how it is to be done."

'Stuck with it'

The attorney general will also choose that person, and unlike other federal judicial appointments, the selection isn't subject to Senate approval. The special master's decisions can't be appealed, the law said.

"If the special master makes a horribly wrong decision or decides to interpret the law or rules in a way we think is unfair and unjust, it's tough," the ABA's Mr. Clifford said. "We're stuck with it."

The very role of a special master raises legal and ethical questions, he said.

"Is the special master an advocate for the family, helping the family determine how much money it deserves? Or is he an advocate for the government, trying to make sure that claims are not excessive and protecting the federal taxpayers from abuse?"

If the special master takes on an advocacy role – defending the fund or challenging claims – that conflicts with his or her duty to decide how much money to award, said Mr. Landsman, the DePaul professor.

"It's like having the judge in court also being the prosecutor against you – totally unfair."

Victims' survivors have two years to file claims. Once they do, hearing officers appointed by the special master are on a fast track to collect evidence. After they decide an award, the government has 20 days to pay.

Under the law, before the award is paid, it must be reduced by the amount of "collateral" payments from sources such as life insurance and workers' compensation. For example, a million-dollar award to a family that's due $200,000 in other benefits would be cut to $800,000.

It hasn't been determined whether the same applies to charitable gifts.

Neither insurance benefits nor charitable gifts are deducted from most court judgments.

The first few people to file will be guinea pigs, Chicago aviation lawyer Don Nolan said. "Thousands of people will be waiting to see how they are treated before making their decision."

If it is generous, he said, thousands more will file almost immediately, guaranteeing a crunch 120 days later when decisions are due.

More time needed

Of course, victims or their families can forgo the program and go to court. However, the law complicates that option, too.

It directs all lawsuits, regardless of where they are filed, to the U.S. District Court in Manhattan, one of the most overworked federal courts in the nation. Officials of that court are still wading through damage suits arising from the 1993 terrorist bombing of the World Trade Center.

A new wave of litigation would "bury those judges and clerks, and take forever to process," said Mr. Howie, the Dallas aviation lawyer.

Congress' decision to create an alternative to lawsuits for paying damage claims was innovative and smart, said most lawyers, including those who have made their fortunes and reputations suing over disasters.

"The question is, are the flaws and hurdles of this legislation so severe that they will render ineffective the tremendous promise Congress made?" said Dallas lawyer Kent Krause, who specializes in aviation litigation.