Equal Pay for Equal Death

Does the 9/11 fund think bankers matter more than electricians?

Nobody argued when Congress offered to set up a fund for the families of the Sept. 11 victims who would agree not to sue in exchange for compensation. Even the Association of Trial Lawyers of America—an entity that rarely cheers for anything that deflects big lawsuits—announced that its members would give free advice to the families who applied to the fund.

But only six months after setting up shop, the fund is stuck. Fewer than 10 of the 3,000-plus eligible families have signed up. Most of the rest are concerned the fund won’t treat them fairly and think that they might be better off relying on the courts and tort law to compensate them for their losses. The problem with the fund as it’s conceived is that it treats damage awards too much like a court would. The best way for the fund to gain the families’ trust—and with it some momentum—is to act less, rather than more, like a court.

The fund currently proposes to give families different awards based on the projected earnings and life expectancy of each victim. This future-earnings principle is the standard basis for calculating damage awards in tort suits, but here it’s a wrong turn. The impulse behind this fund wasn’t really to compensate the Sept. 11 families for their economic loss—it was to ease, in some way, the massive suffering caused by a national attack. In the currency of suffering, there’s no way to compare one family to another. So the fund should give each the same award. Obviously there’s no perfect way to decide who’s entitled to what here—just as there’s no way to justify a federal fund for the Sept. 11 families, when the families of the Oklahoma City and 1993 World Trade Center bombing victims (not to mention Pearl Harbor) got nothing. But if you set aside the goal of universal fairness and assume it’s OK for Congress to help the families hurt by this particular attack, then equal awards are a little more just and a little more practical than anything else the fund can do.

As it stands, the Sept. 11 families who sign up are hit with a 30-page application filled with actuarial tables. There’s a table for a victim who died leaving a spouse and one child, for example, and another one for a victim with two kids and no spouse. Across the top of the tables are arrayed numbers from $10,000 to $225,000 representing the victim’s annual earnings. Along the side are ages from 25 to 65. Using set formulas, the tables work up variables like projected pay raises and tax rates. To arrive at a first estimate for an award, you look at the table that matches the composition of your family after the tragedy and locate the box that corresponds to the age and salary of the person you lost. If you have a child and lost a 45-year-old wife, the government will pay you $828,974 tax-free if she made $30,000 a year. If she made $150,000, you’ll get $2,145,697.

It’s easy to see why middle- and working-class families hate these tables: They don’t just appear to value the lives of some above the lives of others, they actually do so. The message is unmistakable: The government thinks the death of your electrician husband counts for less than the death of someone else’s stockbroker wife.

Wealthy families hate the actuarial tables for different, less obvious reasons: They think the tables don’t go far enough in valuing some lives over others, because the fund doesn’t differentiate between earnings higher than $231,000 a year, which is the 98th-percentile tax bracket. Kenneth R. Feinberg, the fund’s special master, has said he will give out very few awards of more than $3 million. Another downside for the rich (and for some other families as well) is that the fund docks a family’s award if it’s also getting life insurance proceeds or other benefits. And if you had a lot of life insurance, you can be docked all the way to zero. From the perspective of legal theory, this is an odd move, since government policy usually encourages—rather than punishes—people who take reasonable steps to protect themselves from risk. But Congress has said the more benefits, the less government aid. So much for generations of theorists …

By setting a ceiling for salaries and deducting for benefits, the fund lessens the gap between high and low awards, which eases some concerns about fairness. But the fund’s good points don’t make up for its insistent clinging to the actuarial tables and the future-earnings principle. If the fund were a court faced with 3,000 wrongful death suits, this approach would make sense, or at least it would be inevitable. The basic philosophical purpose of those civil suits is to restore those who bring them to what lawyers call “the status quo ante.” Courts don’t care about inequity or need when they decide on damages in wrongful death cases. They only care about trying to give you, in economic terms, the life you had before.

But nothing says the fund has to adopt this premise. Congress’ whole idea was to keep the families out of court, and for good reason: The ones who go to court will probably lose. It’s going to be very hard to prove that any particular defendant who can be found to sue, and brought into court, caused the Sept. 11 deaths. Plaintiffs will have to show the airlines didn’t take reasonable precautions to prevent the hijackings. They’ll also go after federal agencies like the FAA and the FBI, but barring some heart-stopping revelation of an agency screw-up, they’re not likely to get far there either. Even a case that got past these hurdles would run into others—like the $6 billion cap that Congress set on the airlines’ liability after Sept. 11 (each of the four hijacked flights had $1.5 billion worth of insurance). If things looked bad for the government, Congress could pass a law and—after the fact—slam that door entirely. And that’s legit because under the Constitution, the United States gets to exempt itself from paying damages to citizens whenever it wants to.

The remote possibility of a victorious tort suit only strengthens the case for equal awards. Why should the government compensate families for economic losses that would have been the basis of awards in cases they would very likely never win? That doesn’t mean equal awards will satisfy wealthy, litigation-prone families. Proof problems or no, some families (goaded on by a few publicity-driven plaintiffs’ lawyers) will gamble on the prospect of awards as high, for example, as the $10 million-plus damages that about two dozen plaintiffs won after suing Pan Am for the 1988 crash of Flight 103 over Lockerbie, Scotland. But for the families who didn’t lose top earners and thus wouldn’t likely win huge damages even if they did prevail in court, equal awards have the innate appeal of fairness.

And depending on how much each family gets, equal awards could also give lower-earning families more than they’d get from the future-earnings formula. The fund could simply give each family $1.5 million—the estimated average award if you split the difference between the $4 billion to $5 billion total the government has said it’s prepared to distribute and divide by the number of families.

Or it could give each family considerably less. Feinberg picked $250,000 as a baseline award for “non-economic losses” for the Sept. 11 families because that’s what the government gives the families of police, firefighters, and soldiers who get killed while doing their jobs. (The fund adds in $50,000 more per spouse and each child.) The indefensible argument for big awards here is that the families are getting a Sept.-11-only deal because the airlines convinced Congress to help them out of a jam. The defensible argument—which gained support when the House passed a bill in May that would expand the fund’s coverage to the American victims of the 1998 U.S. embassies bombings in Africa—is that Congress is ready to take over liability for acts of terrorism and thinks that the civilian deaths caused by those acts are worth more compensation than the deaths of people killed in the line of duty. (The comparisons aren’t pretty, but you can’t get away from them.) Since Congress didn’t limit the overall amount the fund can spend, it’s probably more in keeping with what lawmakers were thinking to hope the non-cynical rationale holds, so the whole $4 billion-$5 billion estimate can be used up on larger awards.

The deadline for signing up for the fund is December 2003. Since they don’t have any real choice, by that time most of the families will probably give up on going to court. They’ll complete the fund’s application so the administrators can slot them in the proper actuarial-table box. The fund will be unstuck, but it will also have the opposite effect it’s supposed to: It’ll make the families feel terrible. The future-earnings formula achieves nothing that makes up for its sting. The public already knows this: In January, 86 percent of those polled by Time and CNN supported providing victims with equal awards. Kenneth Feinberg has said that the best the fund can do is offer “rough justice.” He’s right about that but wrong about how to get there.