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Kenneth R. Feinberg, the special master in charge of the federal program to compensate an estimated 3,200 families of people killed or physically injured in the Sept. 11 attacks, is expected to send out his first batch of award letters this week, possibly as early as today. Feinberg said Friday that about 15 letters will be issued in the first round, followed by about 30 rulings, some of which will come in 16 test cases developed by a group affiliated with the Association of Trial Lawyers of America (ATLA). The award letters will be posted on the Victim Compensation Fund’s Web site ( www.usdoj.gov/victimcompensation/) as soon as any family accepts. Families have the option of accepting or asking for a hearing with Feinberg. There is little doubt that the Internet traffic to the Web site will be jammed. Lawyers working with victims’ families are keenly interested in finding out how Feinberg will handle a broad range of issues. Even though Feinberg has created a detailed and dense methodology for computing the awards, many issues lurk in the interstices of the formula. While the first rulings will focus on Feinberg’s application of his own methodology, larger questions concerning exercise of his broad discretion to meet individual needs will be addressed in rulings to follow, especially in the test cases prepared by Trial Lawyers Care, a group of more than 1,400 volunteer lawyers organized by ATLA to provide free representation to victims’ families. The first letters, which are expected to be mailed today or Tuesday, do not come from test cases, but instead from claimants whose applications have been completed in the ordinary course because they have not asked to go beyond Feinberg’s methodology. The letters will set forth the claimants’ “presumptive” awards, rulings from which they may appeal to have factors outside the methodology considered. By contrast, the 16 test cases present arguments for Feinberg to exercise his discretion to rectify claimed shortcomings. To date, 605 families have started the application process. It is estimated that by the time the process is finished, the fund will have paid out more than $4 billion to the families of the 2,823 people killed in the attacks, and another 400 people who were injured. “We are looking in these early ruling for Mr. Feinberg to announce his rationale on many unanswered questions, so we can present our clients’ claims in the strongest possible light,” said Debra Brown Steinberg, who heads a group of lawyers at New York’s Cadwalader, Wickersham & Taft representing pro bono about 30 families. Noah Kushlefsky, a partner at Kreindler & Kreindler, a New York-based aviation disaster firm that represents about 210 families, said his firm is holding off on filing for compensation from the fund until it gets a better read on how Feinberg is going to handle claims. Kushlefsky acknowledged that most likely the firm’s clients will end up waiving their right to sue because of the limits imposed by legislation on the liability of airlines and other potential deep pockets for the Sept. 11 attacks. Having lost loved ones, “our clients are angry and angry clients want to litigate,” he said. “Getting more information can help them make an intelligent choice.” He added: “How is the special master going to exercise his discretion to pare down awards that are too big and to boost up awards that are too small? Who knows?” Larry S. Stewart, a former ATLA president who heads Trial Lawyers Care, said the group had “accelerated” the 16 test cases to develop “a common law of precedent to guide the presentation of future cases.” DISCRETION TO BE TESTED As Kushlefsky noted, one of the biggest questions looming is how Feinberg will exercise his discretion over awards, especially for high-income individuals. Feinberg’s procedure provides for an initial calculation of a presumptive award based upon the factors contained in his methodology. But he may also use his discretion to alter the “presumptive” award to address individual circumstances and needs. At the low end, Feinberg has already made it plain that he will exercise his discretion to make sure that most families take home at least $250,000 from the fund. That position, expressed in the preamble to the final rules published in the Federal Register on March 13, should allay the fears of many families that they will come away with nothing because of a requirement written by Congress that life insurance and other forms of collateral benefits be subtracted from any award. The high end is much more puzzling for lawyers, and they are hoping to gain a read on Feinberg’s approach in the early rulings. In the first place, Feinberg set $231,000 as the highest salary level from which he will project economic losses in calculating a presumptive award. That benchmark — which is the 98th percentile for all wage earners in the country — is not a ceiling, Feinberg has said, but he is also quick to add that any award in excess of $4 million, before collateral benefits are subtracted, should be rare. In an interview Friday, Feinberg made it plain he intends to hew closely to that position. Even though a worker may have had a high-paying job on Sept. 11, Feinberg said, it would be “speculative” to project that level of earnings indefinitely into the future. “Absent a contract or other factors” demonstrating that the high salary would remain and grow, Feinberg said, he is “reluctant” to approve awards “north of $3 to $4 million.” Stewart said the Trial Lawyers Care cases are designed to determine whether there is elasticity to accommodate individual circumstance in the way Feinberg applies a range of factors important to both high-income and low-income families. For instance, he said, cases are being posed to test the way victim’s household services (such as care for an ailing mother) are valued, projections for the number of years a victim would continue working, and likely wage increases a victim would have received during that time. When individual cases are examined, Kushlefsky suggested, Feinberg’s methodology might not be generous enough. In two cases, an economist hired by his office came up with awards significantly higher than the presumptive awards produced by the methodology. Using a “conservative approach,” he said, the economist hired by the Kreindler firm came up with an award that was 50 percent higher in one case, and 38 percent higher in the other. GAY PARTNERS Gay rights lawyers in New York will have to wait for the resolution of the key issue that will determine whether same-sex partners can share in payments made to cover a victim’s economic losses. Persons living in the same household, including gay and heterosexual partners, are entitled to enhanced compensation that could be worth hundreds of thousands of dollars under Feinberg’s formula. An award would be enhanced if a family could show the victim was supporting someone living outside of the household, such as elderly parent. The problem for gay couples is that, while the award may be increased, a gay survivor may not be entitled to receive benefits from a victim who died without a will. In that case, a state’s law on intestacy governs how an economic award is distributed, and in many states it is an open question whether an unmarried partner, gay or heterosexual, can collect. Feinberg said that unless all parties agree, he will wait for a state court ruling before distributing those types of awards. In New York, he pointed out, the Surrogate’s Court has appointed gay partners to administer the estates of six victims who died without wills. Jennifer Middleton, a staff attorney with Lambda Legal, said that gay and lesbian partners have a strong claim under New York law that they should be able to inherit. In a law signed earlier this year that resolved a number of technical issues related to Sept. 11, she said, the Legislature expressed its intent that gay and lesbian partners should be able to collect any portion of the award traceable to their relationship with the victim. Similarly, she added, New York Gov. George E. Pataki has signed an executive order permitting gay partners to collect benefits from the state’s Crime Victims Fund. With regard to non-economic losses, Feinberg has made it clear that the Internal Revenue Services’ stringent test, which requires a showing of financial dependency, must be met before a gay or lesbian partner could qualify for the $100,000 award that is paid to dependents for emotional distress. Once the IRS test is met, Feinberg said, the $100,000 will be promptly distributed to the surviving gay partner because there is no doubt that it belongs to that person. SPITZER’S CONCERNS Problems remain in one area that is beyond Feinberg’s control, according to David Noscenti, counsel to New York State Attorney General Eliot Spitzer. In response to concerns raised by Spitzer, the commissioner of the U.S. Immigration and Naturalization Service wrote a letter in May to Feinberg asserting that information collected by him would not be used to initiate a deportation proceeding against an illegal alien. The assurance was needed, Noscenti said, so that families of illegal aliens, who themselves might not be in the United States legally, would come forward and collect benefits they are entitled to. But, Noscenti added, the assurance issued by INS Commissioner James W. Ziglar did not go far enough to assure that families and former employers would provide information. Families will not come forward, Noscenti said, unless they have an “ironclad assurance” the information will not be used — absent a charge of criminal conduct — to deport them. For instance, he explained, the information collected might be used in an unrelated proceeding initiated by the INS.

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