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On the morning of Sept. 13, Leo Boyle was feeling pretty proud. Boyle, a 55-year-old Boston litigator who heads the 60,000-member Association of Trial Lawyers of America, had just finalized a statement for the group pledging a moratorium on all suits arising from the terrorist attacks that had occurred two days before. The pledge, though nonbinding on members, was unprecedented in ATLA’s history. For Boyle, the litigation moratorium was a powerful symbolic gesture. But behind the feel-good announcements, a different — more familiar — drama was playing out. The very day the moratorium was announced, ATLA’s legislative liaison, Linda Lipson, heard disturbing news: The airlines were already lobbying Congress for an industry bailout — one that would shield carriers from liability arising from the Sept. 11 attacks. Boyle couldn’t believe it. The industry was trying to limit the rights of victims before their identities were even known? He alerted ATLA’s executive-committee members, who were equally outraged. “I thought it was grotesque, cruel, and insensitive,” says committee member David Golomb. The group quickly responded: no bailout of the industry without compensation to the victims and their families. Many in Congress shared ATLA’s view. A late-night effort that Friday to attach the bailout to a budget bill in the House was blocked, and the debate rolled into the following week. The airlines’ pitch was simple: Without congressional help, they’d have to stop flying, perhaps within a week. Their insurers were balking at writing coverage absent legislative protection. Democrats were equally firm: Any help for the airlines must also include help for the victims. Around 10:30 p.m. on Sept. 20, less than an hour after President Bush’s address to a joint session of Congress, House and Senate leaders from both parties convened in the offices of speaker Dennis Hastert to hammer out a deal. According to sources present at the meeting and relevant documents, the administration and Republican leaders on the Hill first offered a plan that would consolidate all litigation in the Southern District of New York. To eliminate “spurious claims,” punitive damages would be barred, but the government would compensate plaintiffs for any monetary damages not covered by available insurance. Democrats countered with a plan that established a government fund for victims and their families, to be administered by Congress. The fund would not be limited to monetary damages, and victims would not be required to sue or show causation or negligence in order to recover. The legislators agreed that both approaches would be allowed in the bill. Victims could either seek compensation from a government fund, in which case liability would be stipulated, or they could litigate in the Southern District, in which case they’d have to prove negligence and causation. But key issues remained. Republicans wanted to bar punitives for victims who choose to sue. Democrats said that was a deal breaker, and Republicans gave in. Republicans wanted the victims’ fund capped, but Democrats balked. Capping the fund would inevitably mean that high-net-worth victims, like the hundreds of traders killed at Cantor Fitzgerald L.P., would use up most of the money. Again, Republicans yielded, but they extracted key concessions in return: Awards from the fund would be offset by life insurance and other compensation received by victims; the fund would be controlled by a special master appointed by the attorney general without confirmation by Congress; and the special master’s decisions would not be subject to review. The passage of the victims’ compensation fund was hailed by both parties as evidence of the new bipartisan spirit in Congress. ATLA’s executive committee pledged to represent victims pro bono, and sent a letter to congressional leaders praising their work. Case closed? Not yet. “I think it’s well motivated, but also a real mess,” says James Kreindler of New York’s Kreindler & Kreindler, a leading aviation tort lawyer. Kreindler says that the legislation forces many victims into a bind — particularly those in New York, where tens of thousands of plaintiffs are concentrated. For families with substantial life insurance, Kreindler says, the offset may well be more than the recovery from the fund. If they choose to litigate, the bill limits airlines’ liability to their insurance coverage, reported to be around $1.5 billion per plane. With property damage alone estimated around $34 billion, plaintiffs are looking at pennies on the dollar — if that. “The fund may work if you are an 85-year-old retired widow,” says Cincinnati trial attorney Stanley Chesley, of Waite, Scheindler, Bayless & Chesley. “But if you had a lifetime of earnings ahead, it’s useless.” His partner, aviation lawyer Jerome Skinner, agrees: “The fund is fine for the delivery guy from the deli across the street, but the guy with the big income, his family won’t get his lost wages. They’ll have to accept that, or choose to pursue the wrongdoers. It’s going to be a tough choice.” And that pro bono thing? “ATLA’s proposal is highly motivated, nothing but praise for the motivation, but we couldn’t do it,” says Kreindler, who adds that his office is being deluged by calls from the victims’ families. “If we get hundreds of cases, doing it pro bono would ruin us. Our fee will be low, particularly on fund litigation. But this is our business and it’s very expensive.”

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