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June 10, 2004.


The opinion of the court was delivered by: ALVIN HELLERSTEIN, District Judge

Congress gave the victims of the terrorist-related aircraft crashes of September 11, 2001 and their families a choice of remedy: the Victim Compensation Fund or a traditional lawsuit, and required claimants to choose between them. The motions that I now decide relate to the choice that Congress required.

Special Master Kenneth R. Feinberg, in the context of the extraordinary aftermath of September 11 and reflecting the generosity manifested in the Congressional will, expended a substantial effort in educating the public as to how the Victim Compensation Fund would work. He and his staff were completely accessible, to the point of inviting informal inquiries and submissions, and making informal determinations of probable recoveries. Many claimants responded to the Special Master's efforts, and presented him with substantial elements of their potential claims. An appreciable number decided, however, for good and sufficient reasons, not to proceed with their claims to the Victim Compensation Fund and to withdraw from it, in order to pursue a lawsuit in this court. The issue presented by defendants' motions to dismiss such plaintiffs' claims on the ground of waiver requires me to evaluate if the actions and submissions of various plaintiffs, grouped into three categories, constituted a waiver of suit pursuant to section 405(c)(3)(B) of the Air Transportation Safety and System Stabilization Act.

  I. Statutory and Regulatory Background

  On September 11, 2001, terrorists hijacked airplanes and deliberately flew them into the twin towers of the World Trade Center in New York City and the Pentagon in Virginia. Another hijacked airplane crashed near Shanksville, Pennsylvania after passengers attempted to recapture the aircraft. Nearly 3,000 people in the airplanes and on the ground died, and many others were injured. In the weeks following September 11, Congress passed into law the Air Transportation Safety and System Stabilization Act of 2001, Pub.L. No. 107-42, 115 Stat. 230 (2001) (codified at 49 U.S.C. § 40101) (the Act) to protect the airlines against exposure to financial ruin, and to provide victims and their family members with an expedient method of recovery. The Act was subsequently amended on November 19, 2001 and January 23, 2002. See Pub.L. No. 107-71, 115 Stat. 631 (2001); Pub.L. No. 107-134, 115 Stat. 2435 (2002).

  The Act provides alternative modes of recovery to those who were injured and to the legal representatives of those who died as a result of the terrorist-related aircraft crashes of September 11, 2001. One alternative is a traditional lawsuit. Section 408(b)(1) of Title IV provides for a federal cause of action "for damages arising out of the hijacking and subsequent crashes." Such actions are to be brought in the United States District Court for the Southern District of New York, as a matter of its "original and exclusive jurisdiction over all actions brought for any claim (including any claim for loss of property, personal injury, or death) resulting from or relating to the terrorist-related aircraft crashes of September 11, 2001." The Act § 408(b)(3). The governing law for suits brought under the Act is to be "derived from the law, including choice of law principles, of the State in which the crash occurred unless such law is inconsistent with or preempted by Federal law." The Act § 408(b)(2).

  The other mode of recovery is for eligible claimants to apply to the Victim Compensation Fund (VCF) for compensation awards. The Act, Title IV. The Act limits eligible claimants to a victim or the personal representative(s) of a victim who: (i) was present on one of the hijacked planes or at the World Trade Center (New York, New York), the Pentagon (Arlington, Virginia), or the site of the aircraft crash at Shanksville, Pennsylvania at the time, or in the immediate aftermath, of the terrorist-related aircraft crashes of September 11, 2001; and (ii) suffered physical harm or death as a result of such an air crash. The Act § 405(c). A claimant must waive his right to file a civil action (or to be a party to an action) in any federal or state court, except for a suit to recover "collateral source obligations" (for example, insurance or other such items which, under the Act, are deducted from VCF awards), and except for suits against those knowingly involved in the hijackings. The Act §§ 405(c)(3)(B)(i), 408(c).

  To administer the VCF, the Attorney General appointed Kenneth R. Feinberg as Special Master. The Act grants the Special Master the power to make all "procedural and substantive rules for the Act's implementation." § 404(a). In order to implement the VCF, the Department of Justice (DOJ), in consultation with the Special Master, published procedural rules. An "Interim Final Rule" was published on December 21, 2001, and a "Final Rule" (the regulations) was published on March 13, 2002. See 66 Fed. Reg. 66,274 (Dec. 21, 2001); and 67 Fed. Reg. 11,233 (Mar. 13, 2002) (codified at 28 C.F.R. pt. 104). The Act specifies that only "one claim may be submitted" by a victim or personal representative on behalf of a deceased victim's injuries or death. § 405(c)(3)(A). The regulations define "personal representative" as "an individual appointed by a court of competent jurisdiction as the personal representative of the decedent or as the executor or administrator of the decedent's will or estate." 66 Fed. Reg. at 66,277. If no personal representative is appointed by a court or if the personal representative is disputed, the Special Master may determine who is the personal representative based on the decedent's will or the intestacy laws of the decedent's state. 28 C.F.R. § 104.4(a)(2) (2003). Reliance on state law insured that different personal representatives for the same decedent would not be able both to file a claim with the VCF and sue at law. See 66 Fed. Reg. at 66,277.

  The personal representative acts on behalf of the decedent's estate in matters before the VCF. Prior to filing a claim, the personal representative must provide notice of a claim to the decedent's family and any potential heirs. 28 C.F.R. § 104.4(b). Upon receipt of a VCF award, the personal representative is required to distribute it "in a manner consistent with the law of the decedent's domicile or any applicable rulings made by a court of competent jurisdiction." 28 C.F.R. § 104.52. Before an award is paid, the personal representative must provide a distribution plan to the Special Master. Id. If the Special Master concludes that the plan does not adequately compensate the victim's family, he is given authority to redirect distribution of all or part of the award. Id.

  To file for compensation, a claimant must submit, as developed by the Special Master, an eligibility form and a compensation form for either a personal injury or a death, or for immediate advanced benefits. 28 C.F.R. § 104.21 and 104.22. The forms developed by the Special Master contain four parts. Part I identifies the victim, establishes eligibility and provides for election of advanced benefits. Part II specifies the information required to calculate an award and includes the personal representative's plan to distribute an award. Part III encompasses the notification the personal representative must provide to the family and potential heirs of the victim, authorization for release of information and certification that information provided is accurate and complete. Part IV provides a supporting documentation checklist, identifying documentation that must be submitted. Parts I and III also require an acknowledgment that "by submitting a substantially complete Compensation Form for Deceased Victims" the claimant waives the right to maintain a civil action. The Special Master also developed a form to permit individuals to object to the authority of the personal representative or to provide a statement of interest in a victim's award.

  Once a claim is filed, the Special Master is to review the file and make a determination within 120 days. The Act § 404(b)(3). Pursuant to the regulations, a claim is "filed" when a Claims Evaluator determines that both the eligibility form and either a personal injury compensation form or a death compensation form are substantially complete." 28 C.F.R. § 104.21(a). See In re September 11 Litigation, 2003 U.S. Dist. LEXIS 23561, at *3-4 (S.D.N.Y. Dec. 19, 2003).

  The VCF under Special Master Kenneth R. Feinberg's superb and sensitive administration has proven to be a great success. The Fund will have processed more than 7,300 death and personal injury claims by its closing on June 15, 2004, accounting for claims on behalf of more than 98 percent of those who lost their lives on September 11, 2001. The median award for deceased victims, after offsets, is $1.6 million. The Special Master and his staff have worked tirelessly to process these claims fairly and expeditiously.

  II. Procedural Background

  Victims of September 11 and family members of those who were killed in the attacks faced difficult decisions choosing between the VCF and pursing litigation, while coping with the tremendous losses and the resulting emotional and physical turmoil they suffered. There were also different deadlines to consider. Congress provided two years from the promulgation of the regulations to submit claims to the VCF, or to December 22, 2003. The Act § 405(a)(3). Yet, often, the time to sue was shorter, and sometimes inflexibly jurisdictional, as for example, claims and lawsuits against the Port Authority of New York and New Jersey (the Port Authority), the City of New York and other defendants. In order that claimants would have the full two-year span provided by Congress to consider their choice of forum, yet satisfy state laws, I allowed lawsuits to be brought, thus tolling the statutes of limitations. I also created a suspense docket for such suits to avoid waiver of the right to make claim to the VCF, as provided by my Order of July 22, 2003. Initially, the suspense docket was to end on December 23, 2003; however, I extended it to February 6, 2004 to coincide with action taken by the VCF to enlarge to January 22, 2004 the period by which claimants could make their submissions substantially complete. See In re September 11 Litigation, 2003 U.S. Dist. LEXIS 23561, at *8 (S.D.N.Y. Dec. 19, 2003).

  In December of 2003, plaintiffs, by order to show cause, moved for a ruling that a VCF submission to meet the December 22, 2003 statutory deadline, but which had not been deemed substantially complete, did not constitute an election of remedies under the Act. I held that "a claimant who satisfies the statutory and regulatory definition of filing or submitting a claim, will have waived his right to sue, or to maintain his suit when that filing, or submission, is substantially complete as determined by the Special Master's Claims Evaluator or January 22, 2004, whichever is earlier, and not before then." In re September 11 Litigation, 2003 U.S. Dist. LEXIS 23561, at *9 (S.D.N.Y. Dec. 19, 2003).

  The suspense docket ended on February 6, 2004 and, by Order of February 19, 2004, I dismissed cases that plaintiffs had not activated. On February 25, 2004, I ordered the VCF to produce under seal a list of active plaintiffs who also had claims pending before the VCF. Using this list, and information provided by plaintiffs' counsel, I generated a schedule of those plaintiffs with applications pending before the VCF and ordered them to show cause why their cases should not be dismissed pursuant to the waiver provision. By Order of March 18, 2004, I dismissed cases in which plaintiffs had gone into the VCF, and identified those that could proceed with their lawsuits, subject to defendants' motions to dismiss.*fn1 By Order of April 9, 2004, I identified additional cases that were subject to the defendants' motions and established an expedited briefing schedule, keeping in mind the ...

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