5 November 2001
Source: http://www.access.gpo.gov/su_docs/aces/fr-cont.html

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[Federal Register: November 5, 2001 (Volume 66, Number 214)]
[Proposed Rules]
[Page 55901-55905]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05no01-15]

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DEPARTMENT OF JUSTICE

Office of the Attorney General

28 CFR Part 104

[CIV 104P; AG Order No. 2531-2001]
RIN 1105-AA79


September 11th Victim Compensation Fund of 2001

AGENCY: Civil Division, Justice.

ACTION: Notice of inquiry and advance notice of rulemaking.

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SUMMARY: Shortly after the September 11, 2001 terrorist attack, the
President signed legislation authorizing compensation to any individual
(or the personal representative of a deceased individual) who was
physically injured or killed as a result of the terrorist-related
aircraft crashes on that day. This Notice of Inquiry and Advance Notice
of Rulemaking seeks public comment on a range of matters critical to
implementing a program that will carry out the intent of the
legislation of providing compensation to victims.

DATES: Comments in response to this document are due by November 26,
2001.

ADDRESSES: Comments should be submitted by e-mail to:
victimcomp.comments@usdoj.gov, or by telefax to 301-519-5956. Telefaxes
should be limited to 15 pages. Comments may also be mailed to Kenneth
L. Zwick, Director, Office of Management Programs, Civil Division, U.S.
Department of Justice, Main Building, Room 3140, 950 Pennsylvania
Avenue NW., Washington, DC 20530. However, in view of the short time
period for comments and the current delays in the delivery of mail, it
is strongly recommended that comments be submitted by e-mail or
telefax. Comments received are public records. The name and address of
the commenter should be included with all submissions. The text of
comments, along with the name and address of the commenter, will be
available on the Victim Compensation Fund web site, www.usdoj.gov/
victimcompensation. Comments will also be available for public
inspection at a reading room in Washington, DC. Arrangements to visit
the reading room must be made in advance by calling 888-714-3385 (TDD:
888-560-0844).

FOR FURTHER INFORMATION CONTACT: Kenneth L. Zwick, Director, Office of
Management Programs, Civil Division, U.S. Department of Justice, Main
Building, Room 3140, 950 Pennsylvania Avenue NW., Washington, DC 20530,
telephone 888-714-3385 (TDD 888-560-0844).

SUPPLEMENTARY INFORMATION:

Background

    The President signed the ``September 11 Victim Compensation Fund of
2001'' (the ``Fund'') into law on September 22, 2001, as Title IV of
Public Law 107-42, 115 Stat. 230 (``Air Transportation Safety and
System Stabilization Act'') (the ``Act''). The purpose of the Fund is
to provide compensation to eligible individuals who were physically
injured as a result of the terrorist-related aircraft crashes of
September 11, 2001, and compensation through a ``personal
representative'' for those who were killed as a result of the crashes.
Generally, eligibility extends to those who suffered physical harm or
death as a result of the September 11 air crashes, which would include
individuals on the planes at the time of the crashes (other than the
terrorists) and individuals present at the World Trade Center, the
Pentagon, or the site of the crash in Pennsylvania at the time of the
crashes, as well as those present in the immediate aftermath of the
crashes.
    The Attorney General, acting through a Special Master appointed by
the Attorney General, is responsible for the administration of the
Fund. By law, regulations addressing certain administrative matters
must be issued within 90 days of enactment (i.e. by December 21, 2001).
Section 407 of the Act provides that the Attorney General, in
consultation with the Special Master, promulgate regulations on four
matters by December 21, 2001:
    (1) Forms to be used in submitting claims;
    (2) The information to be included in such forms;
    (3) Procedures for hearing and the presentation of evidence; and
    (4) Procedures to assist an individual in filing and pursuing
claims.

In addition, section 407 authorizes the Attorney General to issue
additional rules to implement the program.
    After determining whether an individual is an eligible claimant
under the Act and applicable regulations, the Special Master is to
determine the extent of harm to the claimant and determine the amount
of compensation to be awarded based on ``the harm to the claimant, the
facts of the claim, and the individual circumstances of the claimant.''
Section 405(b)(1)(B)(i). The law also provides that the Special Master
is to make a final determination on any claim within 120 days of its
receipt and, if an award is made, to authorize payment within 20 days
thereafter. Sections 405(b)(3), 406(a). The determinations of the
Special Master are final and are not subject to judicial review.
Section 405(b)(3).
    The Fund is designed to provide a no-fault alternative to tort
litigation for individuals who were physically injured or killed as a
result of the aircraft highjackings and crashes on September 11, 2001.
Individuals who may have suffered other kinds of losses as a result of
those events (e.g., those without identifiable physical injuries but
who lost employment) are not included in this special program. However,
the Act provides that a claimant who files for compensation must, at
the time of filing, waive any right to file a civil action (or to be a
party to an action) in any federal or state court for damages sustained
as a result of the terrorist-related aircraft crashes of September 11,
2001.
    Claims with the Fund must be filed within two years after the
initial regulations are promulgated. Payments from the Fund are made by
the United States government, which in turn obtains the right of
subrogation to each award.

General Approach to Regulations That Must Be Promulgated by December
21, 2001

    (a) The purpose of this notice.
    As noted above, the Act requires that the Attorney General
promulgate regulations in consultation with the Special Master. The
Department is currently considering potential candidates for the
Special Master position. In addition, the Department is in the process
of seeking information from state and local agencies, as well as many
other sources, that may be useful in crafting proposed regulations. In
the meantime, however, the Department believes that it is very
important, to the extent feasible within the time frames involved, to
involve the public in the development of any rules established under
the program `` including, but not limited to, potential beneficiaries
of the program, their employers, the legal community, and all those who
have come forward to help those impacted. For this reason, the
Department has decided to issue this notice to obtain as much public
comment as feasible before issuing the rules that it is required to

[[Page 55902]]

promulgate by December 21, 2001. This notice describes the issues
involved, identifies possible courses of action, and invites comment on
a number of points. At various points the Department solicits views on
interpretations or applications of the Act. Although the Department
welcomes comments, it is ultimately the Department's responsibility to
interpret and apply the Act.
    (b) The Department's plan to issue implementing regulations by
December 21, 2001 as ``interim final'' rules.
    Although the Attorney General, in consultation with the Special
Master, is to issue certain implementing rules by December 21, 2001,
the law does not specifically define how such rules must be issued. The
Department welcomes comments on these procedural issues.
    The Department is considering promulgating the initial rules on
December 21, 2001 as ``interim final'' rules. ``Interim final'' rules
are ``final'' rules that can be relied upon (and challenged) under the
law, but that also become the subject of a new round of immediate
comment and review--essentially, asking the public for comment on
whether the newly-adopted rules should be amended. The Department
wishes to begin processing claims as soon as possible. This procedural
methodology should permit the program to commence operations as soon as
practicable.
    (c) How to comment in response to this notice.
    There are a number of issues presented in this notice, and 21 days
are provided for comment. The Department has only a limited time to
evaluate the information received in response to this notice.
Accordingly, the Department would appreciate comments that are
transmitted as soon as possible and in a form that is as succinct as
possible. As indicated at the beginning of this notice, we encourage
commenters to use e-mail and telefax for this purpose.
    Although the Department will endeavor to review every submission it
receives in response to this notice, from handwritten letters to copies
of scholarly articles and books, it reserves the right under the
circumstances to set aside any information that it lacks the time to
consider before the Department must make its determination, even if
that information is received before the end of the comment period. The
Department urges commenters to submit materials as early within the
comment period as possible.
    If the Department cannot fully consider all the comments it
receives before it must act, the comments will be retained by the
Department for subsequent consideration as appropriate. As discussed
above, the Department contemplates providing another opportunity for
notice and comment after the initial rules are issued in December; any
information submitted to the Department in response to this notice that
cannot be reviewed before the December rules are issued will be
considered during the subsequent review. Similarly, to the extent that
any issues addressed in the comments are not addressed in this initial
regulatory action, those comments will be retained by the Special
Master for appropriate consideration as the program is implemented.
    (d) Will there also be meetings and hearings to gather information
before December 21, 2001?
    The Department has received many requests for meetings from
individuals and groups who wish to provide input on these rules. And it
is likely that the Department will wish to initiate such meetings on
its own as well. The Department will endeavor to accommodate any such
requests as best it can be given the available time and any applicable
legal requirements.
    As a matter of general policy, the Department has declined to take
a position prohibiting so-called ``ex parte communications'' in
informal rulemaking proceedings. 28 CFR 50.17. Such a prohibition would
inhibit the ability of the Department to obtain valuable information,
and would be inconsistent with the nature of informal rulemaking under
5 U.S.C. 553 (as contrasted with so-called ``formal'' rulemaking under
5 U.S.C. 554, which is handled in a quasi-judicial manner). Consistent
with the policy set forth in 28 CFR 50.17, the Department will endeavor
to make notes on any relevant meetings or other communications part of
the public record.
    (e) The effective date of the rules to be promulgated on December
21, 2001.
    The law generally provides that rules not go into effect for at
least 30 days after promulgation absent ``good cause'' to waive this
requirement. 5 U.S.C. 533(d). The Department is seeking comment on an
appropriate effective date for these rules, including whether ``good
cause'' exists under 5 U.S.C. 533(d) to waive the 30-day requirement.
In ideal circumstances, the Department would prefer not to waive the
APA's requirements for at least a 30-day delay in the effective date
for rules. Given the circumstances here, however, it seems likely that
there may be good cause for taking such action. The Department welcomes
comments on this issue and on other alternatives. For example, a 30-day
effective date delay might not significantly hinder implementation of
the program and would provide time for some initial counseling and
other information dissemination prior to the filing of any claims.
    (f) Issues relating to the rules to be promulgated by December 21,
2001.
    The Department welcomes comment on whether the rules that must be
issued by December 21, 2001, should, pursuant to section 407(5), cover
matters in addition to those specifically identified in section 407(1)-
(4) of the Act. One reason for making the set of regulations to be
published in December as comprehensive as possible is the possibility
that there are some potential claimants who have already filed or will
soon be filing civil actions seeking damages arising out of the
September 11 incidents. Section 405(c)(3)(B)(ii) of the Act provides
that, if an individual is already a party to a civil action when the
regulations enumerated in section 407 are promulgated, the individual
cannot submit a compensation claim under this federal program unless he
or she withdraws from the legal action within 90 days from the date the
rules are promulgated. Without having information about how the
compensation program works, such individuals might not be able to
assess whether the compensation program is a viable alternative to
continuing their litigation.
    The Department believes that the number of individuals who already
have filed a civil claim, or who have irrevocably committed to doing so
in the next few months, may well be very small. The Department would
welcome information on this point. The Department also would welcome
comment as to whether the statutory requirement that a claimant
``withdraw[]'' from such action by 90 days after the date the initial
rules are promulgated was intended to preclude such a claimant from
refiling or rejoining a civil action: (a) should the claimant
ultimately elect not to file a compensation claim under the federal
program; or (b) if the claimant is determined by the Special Master not
to be eligible to file a claim.
    In short, potential claimants have an interest in knowing as soon
as possible how the program is likely to operate in their
circumstances. Litigation to obtain damages, particularly in a mass
tort context, can be a lengthy, uncertain, and complex process, filled
with substantial risk and expense. The purpose of this compensation
program is to offer all potential claimants a more expeditious,
predictable, and less complex alternative to that process. The

[[Page 55903]]

Department recognizes that unless and until it can provide some
certainty as to how the compensation award program will work, some
claimants may be reluctant to commit themselves to the Fund as an
alternative to tort awards.
    We now turn to a set of specific topics on which comment is
solicited. The first four topics concern the Department's obligations
under section 407(1)-(4) of the Act. The remainder discuss key issues
that may also be the subject of regulatory action.

Topics #1 & 2: The Forms To Be Used in Submitting Claims Under This
Program and the Information To Be Included on the Claims Form

    Section 405(a) of the statute establishes some specific
requirements with respect to the claims form and the information to be
included. The law requires the Special Master to develop a claims form
to use in filing claims for compensation under this program. The
Special Master is to ensure that the form can be filed electronically
if practicable.
    The form must include a statement of the factual bases for
eligibility and for the amount of compensation sought. In addition, the
form is to request information from the claimant as to: (1) The
physical harm suffered by a victim, or information confirming the death
of the victim, of the terrorist-related aircraft crashes of September
11, 2001; (2) any possible economic and noneconomic losses that the
claimant suffered as a result of the crashes; and (3) any collateral
sources of compensation the claimant has received or is entitled to
receive as a result of such crashes.
    It would appear that these requirements, combined with the
statutory time frame for the Special Master to reach a decision once a
claim is filed, contemplate a detailed form and filing, including
submission by the claimant of supporting documents and relevant medical
records. Accordingly, the Department invites comment on whether the
Special Master should determine that a claim has not been ``filed'' in
those circumstances in which the Special Master determines that there
is insufficient information submitted to permit a reasonably informed
determination to be made. Along similar lines, the Department invites
comments on whether there are actions the Special Master should be
required to take before he or she can accept a claim, or deem a claim
``filed.''
    The Department welcomes comment on the design and content of the
claims forms in light of the statutory requirements. Specific comments
on making the form and its instructions readable and readily available
are welcome.

Topic #3: Procedures for Hearing and the Presentation of Evidence

    Section 405(b)(4) provides that a claimant has the right, after the
filing of the claim, to present evidence to the office of the Special
Master. The statute specifically provides that the claimant has the
right to present witness statements and documents, the right to be
represented by an attorney, and such other due process rights as are
determined to be appropriate by the Special Master.
    The Department solicits comments on the procedures to be used in
taking and evaluating such evidence. In formulating comments,
commenters should keep in mind that the Act gives the Special Master a
very limited time to evaluate such evidence before making a decision:
Section 405(b)(3) of the statute provides that the Special Master must
make final decisions on claims within 120 days of the date of filing.
Comments as to whether the statute permits the Special Master to
temporarily halt or toll the running of this clock, at the initiative
of the claimant or otherwise, are welcomed. In addition, the Department
invites comment on whether the Special Master should be permitted to
dismiss a claim as not properly filed for lack of adequate supporting
information and, if so, whether an individual should thereafter be
permitted to refile the claim.
    Among other matters, the Department welcomes comment on whether
every claimant should be granted an oral hearing or whether paper
hearings may be sufficient, and comments on what types of oral hearing
may be practicable, consistent with the statutory deadlines. If oral
hearings are provided, should the Special Master always use ``hearing
officers'' to hear witnesses and review written evidence? What
qualifications and training should those who perform such tasks have?
In addition, the Department welcomes comment on whether there are other
specific duties and powers that should be delegated to hearing officers
(e.g., to ask questions of the claimant or witnesses, to request
submissions of such further information as the hearing officer may deem
valuable in reaching a decision, and/or to prepare recommended
decisions for the consideration of the Special Master).
    The Department welcomes comment on whether claimants should have
the opportunity to appeal directly to the Special Master specific
``rulings'' or ``working decisions'' of a hearing officer on questions
that arise in the course of his or her evaluation of the claim. The
Department also seeks comment on whether it is authorized to enforce
requests made by the hearing officer to third parties for evidence that
is necessary to a proceeding--e.g., evidence that might bear on whether
all aspects of the claim file on which the decision will be based are
accurate and complete. The Department also welcomes comment on whether
such proceedings should be recorded, whether such proceedings must be
held in a location convenient to the claimant and how to deal with
scheduling conflicts, and whether the opportunity for a hearing can be
waived by a claimant through inaction or unwarranted delay.
    The Department particularly welcomes comments that reference the
practices or experience of existing compensation programs with respect
to the hearing of evidence.

Topic #4: Procedures to Assist an Individual in Filing and Pursuing
Claims Under This Title

    The statute does not provide guidance on what actions the Special
Master is to take to assist claimants in filing and pursuing claims.
However, the Department believes that it is important that claimants be
able to proceed without economic experts. Accordingly, the Department
welcomes any and all suggestions as to how it can assist claimants,
including suggestions for office locations, toll-free phone lines,
outreach meetings, and newsletters.
    In addition, the Department welcomes comments on whether the
Special Master has the authority to limit the types and amounts of fees
that can be charged by legal counsel, accountants, experts or others
who are retained by claimants to assist them in filing and pursuing
compensation claims, and whether such fees can and should be paid by
the Special Master directly out of compensation awards. The Department
welcomes information about practices in this regard with respect to
other federal compensation programs, and welcomes specific suggestions
on any appropriate fee schedule or policy. The Department also welcomes
comments on what limitations, if any, the rules should impose on non-
attorney, non-claimant representatives' participation in filing claims
and in subsequent proceedings.
    The Department is also interested in comments as to whether it
needs to take any actions to ensure that individuals who have the
option of filing a compensation claim with this program are not
improperly solicited or influenced by those with an interest in having
them make such an election.

[[Page 55904]]

Topic #5: Claimant Eligibility

    Section 405(b) of the statute requires the Special Master to
determine whether a claimant is an ``eligible individual'' under
section 405(c). ``Eligibility,'' in turn, is defined to include: (i)
victims (other than the terrorists) aboard American Airlines flights 11
and 77 and United Airlines flights 93 and 175; or (ii) victims who were
``present at'' the World Trade Center, the Pentagon, or the site of the
aircraft crash at Shanksville, Pennsylvania at the time or in the
immediate aftermath of the crashes, and who suffered physical harm or
death as a result of such an air crash. The Department seeks comment on
whether a Departmental regulation or a statement of policy by the
Special Master would be appropriate to clarify these criteria and, if
so, what those criteria should be.
    Public commentators have suggested differing interpretations of the
statutory terms ``present at,'' ``physical harm,'' and ``immediate
aftermath.'' The Department invites comment on the appropriate scope of
each of those terms. In particular, how should ``present at'' be
interpreted? Should the term ``physical harm'' be limited to serious
injuries, as it is under some other no-fault compensation schemes (see,
e.g., N.Y. Insurance Law Sec. 5102 (d) (McKinney 2000)), or should it
be construed more broadly? Further, should ``physical harm'' be limited
to currently identifiable injuries? Can and should the program address
latent, but not yet evident, harm? What documentation or other evidence
should be required by the Special Master as to the claimant's presence
at the World Trade Center or physical harm resulting from the air
crash? Moreover, what documentation or other evidence should the
Special Master seek to verify the identity of those lost for whom
claims are filed? Finally, what duration of time is intended by the
statutory phrase ``immediate aftermath''?
    Section 405(c)(2)(C) provides that the ``personal representative''
of an eligible decedent is the appropriate person to file a claim on a
decedent's behalf. The Department seeks comment on whether a
Departmental regulation or a statement of policy by the Special Master
would be appropriate to clarify questions concerning personal
representatives, for example:
     Whether the Special Master should require that all those
who consider themselves to be survivors of someone lost in the crashes
be notified of a claim by a ``personal representative'';
     Whether the Special Master should require that the
``personal representative'' identify all those who consider themselves
to be survivors of someone lost in the crashes and obtain from each a
signed statement waiving the right to litigation prior to the
acceptance of a claim;
     Whether the Special Master can, within the brief statutory
period identified by the statute, determine who among different
claimants is the appropriate ``personal representative'';
     Whether the Special Master should, in any matter involving
a dispute as to the identity of the ``personal representative,''
require prior adjudication and judgment by a state court of competent
jurisdiction; and
     Whether the Special Master should make determinations of
compensation for claimants and escrow payment until disputes regarding
the identity of the ``personal representative'' can be resolved by a
court of competent jurisdiction.

Topic #6: Nature and Amount of Compensation

    Section 405(b) of the statute indicates that the Special Master
shall determine the amount of compensation based on ``the harm to the
claimant, the facts of the claim, and the individual circumstances of
the claimant.'' Yet each of the perhaps thousands of determinations
must be made in a very short period of time. Moreover, such
determinations should be founded on consistent and clear principles
that treat each claimant fairly. The Department invites comments that
identify the practical means to achieve these results all within the
very short time period that Congress has permitted. Among other topics,
the Department would welcome comment on whether and how schedules or
statistical methodologies should be developed and used in reaching a
determination for each claimant within the mandated time period. In
addition, comments are welcomed on whether publication of such
schedules or hypothetical or presumptive awards for classes of
individuals would assist potential claimants in determining whether to
file.
    Economic Loss: As indicated above, the Department is of the view
that the Special Master should not require that any claimant employ any
experts on economic or other theories of losses. It may therefore be
appropriate for regulations to draw on available information from
appropriate specialists in relevant fields to analyze economic losses.
The Department invites comment regarding the necessary qualifications
for such specialists, the data that should be utilized, the
methodologies that should be employed in analyzing economic losses, the
documentation that should be required for every claimant, and how state
law should bear upon such determinations. In addition, the Department
invites comments on how to address the economic losses of individuals
whose lost future income streams would have been highly contingent,
variable, or unpredictable.
    Noneconomic Losses: Section 402(7) lists several types of
noneconomic losses that should be considered. The Department invites
comments regarding whether, and in what manner, the Special Master can
or should draw meaningful distinctions between individuals who died in
different locations and, similarly, whether the Special Master can or
should draw meaningful distinctions between individuals who suffered
similar injuries. The Department also invites comments on whether the
Department should issue regulations determining the amount of
noneconomic loss for classes of similarly situated individuals or
whether, instead, the Special Master should determine all noneconomic
loss on a detailed claim-by-claim basis. Further, what facts and
circumstances should be considered in determining noneconomic losses
for each individual, and what standards should be employed?
    Collateral Sources: Section 405(b)(6) provides that the Special
Master shall reduce the amount of compensation by the amount of the
collateral source compensation the claimant has received or is entitled
to receive as a result of the terrorist-related aircraft crashes of
September 11, 2001. The Department invites comments on how to determine
what constitutes a ``collateral source'' for purposes of this
provision, and other related issues. For example, the Department
appreciates the strong policy reasons for excluding charitable
contributions from the definition of ``collateral sources'' and invites
comment regarding whether the Act indeed permits the Department to
exclude such contributions from the definition. Similarly, the
Department invites comments on whether ``in kind'' and/or material
contributions could or should be considered collateral sources.
Finally, the Department invites comments on how to determine whether
potential future collateral source payments are ones that individuals
are ``entitled to receive'' for purposes of Section 405(b)(6).

Fraud Prevention Measures

    The Department is committed to preventing and prosecuting any
fraudulent attempts to collect from the

[[Page 55905]]

Fund. The Department therefore invites comments regarding any measures
that the Department should take to prevent and detect fraud.

Other Topics for Comment

    The Department reiterates that it welcomes public comments on any
and all aspects of the administration of the fund.

Application of Various Laws and Executive Orders to This Rulemaking

    There are a number of laws and Executive Orders whose provisions
may have implications for this rulemaking process. Due to the
preliminary nature of this notice, it does not address these
requirements. Nonetheless, the Department welcomes comments that will
help it address the applicability of any laws or Executive Orders to
future rulemaking under the Act.

    Dated: November 1, 2001.
John Ashcroft,
Attorney General.
[FR Doc. 01-27821 Filed 11-1-01; 2:54 pm]
BILLING CODE 4410-12-P