America Acts: Swift Legislative Responses to the September 11 Attacks; Congress Moved to Stabilize the Airline Industry, to Establish a Victim Compensation Fund and to Strengthen Airport and Aircraft Security

Article excerpt

THE devastation wrought by the September 11, 2001, attacks on the World Trade Center in New York City and the Pentagon, as well as the air crash in Pennsylvania, remains difficult to comprehend. Nearly three thousand people were killed and hundreds injured; thousands of families were torn apart. The property damage is so complete that the nuclear war term "ground zero" is used to describe the site of the attack in New York City.

The resulting economic dislocation from the attack posed a credible threat to bring the entire commercial airline industry down in an apocalyptic crash emulating the four aircraft that disintegrated. Confronted with the potential failure of the industry and operating in a wartime mode, the U.S. Congress enacted and the President signed on September 22 the Air Transportation Safety and System Stabilization Act (ATSSSA) (1) designed to shore up the industry financially for the short term, to assure that the U.S. cross-continental economy had a viable air transportation system, and to establish the September 11th Victims Compensation Fund of 2001 (VCF) to provide compensation to those who were injured or lost family members in the attacks.

In order to help protect against similar events occurring again, Congress also speedily enacted the Aviation Transportation Security Act (Security Act) (2) on November 19. It provides for federal oversight of airport security screening, improved in-flight security measures and the development of enhanced measures to increase aircraft security.

Regulations implementing the VCF were published on December 21, 2001, as an interim final rule. (3) They became final on January 21, 2002, but the Department of Justice remained open to further comments. In view of the strong feelings the VCF had engendered and the criticism of some of its provisions--such as an offset for collateral source compensation, presumed economic loss tables, and a presumed award for non-economic losses sustained of $250,000 per victim, plus an additional $50,000 for the spouse and each dependent of the deceased victim--it was expected that there would be further refinements to the regulations or even a legal challenge as to whether the regulations properly interpret the VCF statute.

The final rule was issued on March 13, (4) according to which these changes were made to the interim rule:

* Clarified how certain "collateral resources," including pensions, will be treated;

* Expressed the intention to assist claimants in understanding how certain types of collateral offsets will be treated to help claimants to decide whether to use the VCF;

* Adjusted the "presumed" economic loss methodology, which should increase potential awards for most claimants;

* Increased the "presumed" non-economic award in certain cases;

* Clarified the intention that most families of victims who died should receive a minimum of $250,000; and

* Provided certain exceptions to the requirement that injured victims must have received medical treatment within 24 hours of injury.

ATSSSA

The ATSSSA provides substantial financial assistance to U.S. air carriers (5) and establishes a mechanism by which all individuals who were injured and the personal representatives of those killed in the attacks may seek compensation for their personal injury or wrongful death claims without establishing fault.

A. Title I -- Airline Stabilization

To stabilize the financial condition of U.S. airlines, the U.S. President is authorized to issue up to $10 billion in federal loan guarantees and $5 billion in direct compensation. The latter sum applies to direct losses resulting from the federal ground stop order of September 11 and any subsequent ground stop orders and to incremental losses sustained by air carriers as a direct result of the September 11 attacks, continuing through December 31, 2001.

Title I also creates the Air Transportation Stabilization Board, which serves as the decision maker on applications for the federal loan guarantees. …