September 11 Victims Fund Officially Closes on June 15, 2004

The September 11th Victims Fund officially closed on Tuesday, June 15th, 2004. The fund, administered by Kenneth R. Feinberg, dispersed, in total, US$6.9 billion to compensate over 5,500 families. This included compensation for over 98% of the families of persons killed on 9/11 (2,878 of the 2,973 eligible families) and an additional 2,674 awards made to injury victims. The average award for the family of a person killed on 9/11 was US$2.1 million; the lowest amount awarded was US$250,000 and the highest amount was US$7.1 million. The injury awards, mostly made to rescue workers, averaged $384,000; the lowest amount awarded was US$500 and the highest amount was US$8.7 million. In total, the fund received 7,396 claims for death and personal injury.


Death Claims
Total Claims Submitted    Total Claims Approved    Highest Award    Lowest Award    Average (Mean) Award    Average (Median) Award
2,966    2,878    $7.1 Million    $250,000    $2.1 Million    $1.7 Million
Personal Injury Claims
Total Claims Submitted    Total Claims Approved    Highest Award    Lowest Award    Average (Mean) Award    Average (Median) Award
4,430    2,674    $8.7 Million    $500    $384,000    Unavailable


The application deadline for the fund was December 22nd, 2003. The fund, which had been off to a slow start, saw a dramatic increase in the number of filings in the month before the deadline. In November of 2003 the fund had only received applications from 60 percent of eligible families. However, in the fund’s last month, 40 percent of death claims and 45 percent of personal injury claims were submitted.

Kenneth R. Feinberg, the designer and administrator of the fund and a veteran of complex of complex compensation disputes including the legal claims associated with the effects of Agent Orange, worked without compensation while acting as Special Master of the Fund. Feinberg stated to The New York Times, that while he thinks the fund was “the right response to the moment,” he questions the wisdom of a system that makes individualized calculations for each lost life. Feinberg, hypothesizing that it might have been better to offer a flat lump sum or to devise a tiered-recovery system, noted that “life is filled with too many curveballs and roadblocks to assume that one can calculate future economic loss.”

The Fund has been met with reservations since its inception. Marc Moller, a Partner at Kriendler & Kreindler, had the following thoughts when asked about the Victim’s Compensation Fund, “Under the stewardship of the special master Kenneth Feinberg, the VCF served its purpose well in that it offered 9/11 victims an opportunity to receive a certain, but definitely imperfect award for the loss of a loved one. The Special Master did an extraordinary job in making this unprecedented program work. Having said that, the VCF legislation requirement that awards be reduced by life insurance and death benefits worked grave injustice. Nevertheless, obviously, since more than 98% of the death claims opted to enter the VCF program, the certainty of an award was enough to lure them away from the litigation option. However, those few families who opted to litigate their claims against the airlines, security companies and airport operators have winnable cases and are aware of the litigation risks. How the lawsuits will play out, will take some time to determine. What is clear, is that 9/11 created unique circumstances and unique challenges for lawyers called upon to advise their clients about the best course to follow.” Kreindler & Kreindler has assisted over 400 families receive VCF awards totaling US$700 million.

In re September 11th Litigation: Defendants’ Motion to Dismiss pursuant to Waiver Provision Granted in Part and Denied in Part

In a related case, Judge Hellerstein issued an opinion on June 10, 2004 in the In re September 11th Litigation (2004 WL 1320897 (S.D.N.Y.). The Judge partially granted and partially denied the Defendant’s motion to dismiss pursuant to the waiver provision of the Air Transportation Safety And System Stabilization Act. The Defendants had moved to have several of the suits dismissed alleging that the plaintiffs had waived their rights to sue by submitting information to the VCF. The Court, in partially denying and partially granting the motion, discussed the plaintiffs’ suits as falling into one of three categories: 1) claims allegedly not withdrawn on or before January 22, 2004; 2) claims where documentary evidence was submitted such that the claim was substantially complete but without the claims evaluator having so deemed it; 3) situations where the decedent’s personal representative submitted a VCF claim and another related individual filed a lawsuit. The Court granted the Defendant’s motion to dismiss with regard to those suits falling into categories 1 and 3, and denied the motion to dismiss as to those suits falling into category 2.

The Judge granted the Defendants’ motion for those claims not withdrawn from the VCF on or before January 22, 2004. Pursuant to the Judge’s earlier Order of December 19, 2003, claimants could file claims with the VCF (in order to meet the December 22, 2003 deadline), and these claims would not act to foreclose the claimants’ rights to bring, or maintain, a lawsuit until the claims were considered “substantially complete” by the Special Master’s Claim Evaluators or until January 22, 2004, whichever was earlier. Defendants moved to dismiss four suits for which there were also claims submitted to the VCF that not been withdrawn before the January 22nd deadline. Three of these suits were simply cases where the plaintiffs neglected to withdraw their VCF claim before the deadline. The remaining case, Hoglan v. Argenbright Security, involved the mother of the victim (also the administrator of his estate) who opted to sue while the father of the victim (the plaintiff’s ex-husband) submitted a claim to the VCF. The plaintiff/mother originally objected to this claim, but later withdrew her objection. In opposition to dismissal, the plaintiff argued that she had not waived her right to litigation, but the Court held that the “VCF [was] an alternative to litigation, not … a supplement,” and that by allowing the VCF claim to go through without further objection the plaintiff had waived her right to sue.

The Court denied the Defendants’ motion to dismiss nine suits where documentary evidence was submitted to the VCF such that the VCF claim was substantially complete but without the claims evaluator having so deemed them. The Court “saw no reason to substitute the court’s judgment for the Special Master’s in determining when a claim is substantially complete.” The Court then found that in eight of the nine cases sought to be dismissed, the plaintiffs had provided information to the VCF but had withdrawn their claims before January 22, 2004 or before a Claims Evaluator had deemed them “substantially complete.” The ninth claim, Jean & William Hunt v. Amer. Airlines, Inc., involved a plaintiff who had signed a waiver when applying the VCF for advanced benefits, but had withdrawn her application before it was deemed substantially complete. The Court found that because Ms. Hunt withdrew her voluntary waiver before it was relied upon, and because no VCF benefits were paid to her, her suit could proceed.

The Court granted the Defendants’ motion to dismiss three suits where the decedent’s personal representative submitted a VCF claim and another related individual, the plaintiffs, filed a lawsuit. In dismissing the plaintiffs’ suits, the Court noted that the VCF award “encompasses all potential claims that could be made, including personal losses [to other family members like the plaintiffs], both economic and non-economic.” The Court held that under the VCF, only one remedy was permissible, and in these three cases the legally appointed personal representative had chosen the VCF, foreclosing the plaintiffs’ legal claims.
Link to Victims Compensation Fund Website: http://www.usdoj.gov/victimcompensation/


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Material for this newsletter taken from:
“A Lawyer Who Just Couldn’t Say No.” The New York Times 16 June 2004: B4.
“After Weighing Value of Lives, 9/11 Fund Completes Its Task.” The New York Times 16 June 2004: A1.
“For One Widow, a Somber Acceptance.” The New York Times 16 June 2004: B4.
September 11th Victim Compensation Fund of 2001. U.S. Department of Justice. 21 June 2004.  <http://www.usdoj.gov/victimcompensation>;.
“Special Master Steered a Program Through Its Many Curves.” The New York Times 16 June 2004: B4.
“Victim Fund Closes After Paying Out Nearly $7 Billion.” New York Law Journal 16 June 2004: 1.