Implementing the 9/11 Victim Compensation Fund: Two Steps Forward, One Step Back: While the Statute Establishing the Fund Seeks Full Compensation for Victims, the Regulations Are Subject to Challenge for Failing That Mandate in Some Respects

While the statute establishing the fund seeks full compensation for victims, the regulations are subject to challenge for failing that mandate in some respects ON September 22, 2001, just 11 days after the deadly and devastating attacks on the World Trade Center and the Pentagon, the President of the United States signed into law H.R. 2926, the Air Transportation Safety and System Stabilization Act (ATSSSA).1 In Title IV of ATSSSA, which created the September llth Victim Compensation Fund of 2001, the federal government chose a curious tort model to assist the individual victims and their families. It could have selected other paths, such low interest or no-interest loans or transitional assistance programs parroting some state based unemployment compensation or workers' compensation programs. But it did not. Instead, Congress chose a model that provides full, fair and reasonable compensation, without regard to fault, for the entire loss suffered by each victim and each family in this horrific tragedy. Without doubt, the fund is the single largest and most comprehensive no-fault statute in the history of the United States. In typical fashion, Congress painted the canvas of the fund in broad strokes, setting policies and standards and the appropriating funds to pay the claims. Responsibility for implementing the details was delegated to the U.S. Attorney General and a "special master." Kenneth R. Feinberg was appointed special master in November 2001. On December 21, 2001, in accordance with the time frames set by ATSSSA, the Department of Justice issued an interim final rule establishing regulations to govern administration of the fund.2 After receiving and considering numerous comments from interested parties, lawyers, academics and others, the final rule was issued on March 13, 2002.3 With the regulations that will govern the administration of the fund now firmly set, it is appropriate to evaluate the legal issues that arise. ISSUES RAISED A. Constitutional Issues * Did Congress have the power to create a no-fault compensation scheme that benefits a narrow class of tort or crime victims and that is financed by federal tax dollars? * Did Congress have the power to grant full or partial immunity from tort-based judgments (1) to specific private parties rather than classes of individuals (2) ex post facto (3) without full, unrestricted compensation and (4) triggered by exhaustion of available casualty insurance proceeds? * Did Congress have the power to mandate waiver of civil lawsuits against putative tortfeasors by individuals who file claims against the fund and who are later determined to be ineligible for fund benefits? * Did Congress have the power to create federal causes of action for damages arising from a connected series of tortious/ criminal acts and tie liability to the tort law of the state where the incident occurred? * Did Congress have the power to assign all lawsuits of this type to one federal district court regardless of the site of the incident, the location and convenience of witnesses, or the domicile or residence of the plaintiffs or defendants? * Who has standing to challenge Title IV, the regulations promulgated under it, or the decisions, actions or inactions of the special master? * What are the proper procedures to follow in raising challenges to the act, the regulations, or the actions of the special master? B. Fundamental Issues * Did the Department of Justice materially and wrongfully deviate from Congress's delegation of authority by (1) assuming powers beyond the express grant of authority, (2) excluding some victims from the fund, (3) minimizing the authorized scope of recovery for victims, and (4) abandoning individualized fact finding? * Is explicitly unequal treatment of rescue workers from other victims proper and sustainable? * Can the special master control distribution of fund proceeds in frank disregard of state probate law? …