Posts Tagged ‘Victim Compensation Fund’

April 25 roundup

Appellate Division upholds ludicrous 1993 WTC bombing verdict

In the wake of the September 11 bombings, Congress established a Victims Compensation Fund and limited liability for a number of deep-pockets who were also victimized by the attacks. A number of academics questioned that it was even conceivable that innocent third parties could be held liable for a terrorist attack. Anthony J. Sebok, What’s Law Got to Do With It? Designing Compensation Schemes in the Shadow of the Tort System, 53 DEPAUL L. REV. 901, 917 (2003); RICHARD A. NAGAREDA, MASS TORTS IN A WORLD OF SETTLEMENT 104 (2007); Peter Schuck, Special Dispensation, AM. LAWYER (June 2004); see also LLOYD DIXON AND RACHEL KAGANOFF STERN, COMPENSATION FOR LOSSES FROM THE 9/11 ATTACKS (RAND Institute for Civil Justice 2004).

Overlawyered readers knew better, because they had seen the Port Authority get socked with a $1.8 billion verdict (Oct. 27, 2005; Oct. 29, 2005; Nov. 2, 2005) after being held 68% responsible for the deliberate bombing of the World Trade Center by terrorists in 1993. The Port Authority appealed the absurd ruling, but the Appellate Division has affirmed unanimously (via) since, after all, such absurdities are central to the modern tort regime and thus not “legal error” to abandon the centuries-old concept of intervening causation. As I noted in a related Wall Street Journal editorial, contingent-fee attorneys’ incentives are not to seek out the truth behind wrongdoing, but to construct a narrative that will hold the deepest pocket the most responsible, regardless of the effect on justice. This distortion has worked its way into popular culture; a survey of family members of September 11 decedents found that the median respondent held the terrorists only 30% responsible for losses. Gillian Hadfield, Framing the Choice between Cash and the Courthouse: Experiences with the 9/11 Victim Compensation Fund, 42 L. & SOC. R. __ (forthcoming 2008). See also my House testimony on the expansion of the 9/11 Fund.

House Judiciary Committee hearing on 9/11 Victim Compensation Fund

The hearing is now on-line (I’m at the 55:18 mark; Maxine Waters is at the 2:10:20 mark), as is my written testimony.

Things I should’ve said: that a dictator did a good job in the past hardly means that a dictatorship is a good idea, even if you can reappoint the same dictator. But one can be dumbfounded by the stupidity of some questions.

Earlier: April 1 and March 31.

$2 million 9/11 fee under fire

“Laura Balemian, whose husband Edward J. Mardovich died in the World Trade Center, received one of the largest awards paid out by the September 11th Victim Compensation Fund: $6.7 million. But she in turn paid out what is almost certainly the highest legal fee. While the vast majority of victims were represented before the fund pro bono or for a nominal fee, Balemian paid her lawyer, Thomas J. Troiano, a one-third contingent fee, or over $2 million.” In an affidavit, 9/11 fund special master Kenneth Feinberg calls Troiano’s fee “shocking and unconscionable”, and says that fund guidelines recommend that attorney fees be kept under 5 percent of family recoveries; Troiano, however, says Mrs. Balemian knew what she was getting into and that his efforts produced outstanding results. (Anthony Lin, “Attorney’s $2 Million 9/11 Fee Called ‘Shocking, Unconscionable'”, New York Law Journal, Aug. 29; Alfonso A. Castillo, “9/11 widow battles over attorney’s fee”, Newsday, Sept. 1; MyShingle, Aug. 28).

Update: Story also covered in this American Justice Partnership publication (PDF).

Conference next Thursday: lessons of the 9/11 fund

Next Thursday, Jan. 13, the Manhattan Institute’s Center for Legal Policy is giving a half-day symposium in Washington, D.C. on “The 9/11 Victim Compensation Fund: Successes, Failures, and Lessons for Tort Reform”. The event is at the Hyatt Regency on Capitol Hill and runs from 8:30 a.m. to 2 p.m. (agenda and registration). I’ll be on the second of the day’s two panels with very brief remarks responding to the primary paper(s). Among notable panelists are Yale Law’s Peter Schuck and Robert Reville, director of the Rand Institute for Civil Justice; Kenneth Feinberg, Special Master of the 9/11 Fund, will deliver the luncheon address.

Sometimes the system works

Despite much hue and cry about the September 11 Victim Compensation Fund (see Dec. 29, 2003, almost immediately below, and Apr. 2-3, 2003, Sept. 9-10, 2002, Oct. 26-28, 2001), more than 95 percent of eligible families ultimately opted to file claims with the fund rather than going to court. (Jennifer Barrett, “A Dramatic Success,” Newsweek, Dec. 23 (via

More than 6,450 claims were received by the December 22nd midnight deadline, with about 70 of the remaining 150 eligible families having decided to pursue a lawsuit instead of filing with the fund. Other families have chosen to forego both a lawsuit and the administrative fund, saying others need the money more than they do. “None of us were dependent on” our sister, one such family member explained, “and none of us wanted to gain from her death.” (Stephanie Saul, “Foregoing the WTC Victims’ Fund,” NYNewsday, Dec. 23).