Grantmakers in the News

May 1, 2003

Court Hears Claims Against Federal 9/11 Fund

A federal court in Manhattan is considering arguments that the federal government's September 11th Victim Compensation Fund is shortchanging the families of some victims by tens of millions of dollars, the New York Times reports.

Lawyers for relatives of ten victims who worked at the bond brokerage firm of Cantor Fitzgerald argue that awards from the Fund are unfair, arbitrary, and biased and that the Fund's rules discriminate against unmarried victims, impose an illegal cap on awards to high-income families, and allow for too much ambiguity and subjectivity on the part of the Fund's special master, Kenneth Feinberg. They also complain that the process to determine award amounts is not subject to judicial review.

Responding on behalf of the government, Robert McCallum Jr., acting associate attorney general for the U.S. Department of Justice (DOJ), which is responsible for administering the compensation program, told the court that the Fund was meant to be an option to litigation for families, not a replacement for the tort system, and further noted that it was designed to offer immediate, tax-free compensation, without the risk or costs of conventional litigation, to help families rebuild their lives on a "sustainable, realistic, and reasonable foundation."

Judge Alvin K. Hellerstein of the U.S. District Court for the Southern District of New York said he would rule on the case by early May, with most observers predicting he will side with the DOJ. The Fund, which is expected to cost taxpayers as much as $5 billion, has so far awarded a total of $528 million, or an average of $1.45 million per family.