Torts - Cases, Principles, and Institutions Fifth Edition, 2016a

Witt & Tani, TCPI 10. Damages
received by a decedent’s family against the damages awarded. While there was still significant
variation between the payouts given to higher and lower earning victims, the capped income
figure and the life insurance set off meant that variation within the class of fund beneficiaries was
significantly smaller than it would have been if these cases had gone through a tort law’s
traditional methodology of calculating damages. See Kenneth Feinberg, Final Report of the
Special Master of the September 11th Victim Compensation Fund, U.S. Dept. of Justice,
https://perma.cc/ZCK7-DL33.
In the end, the fund distributed over $7 billion to over 5,000 individuals within three
years. 97% of the decedents’ families participated in the settlement. The median award was
slightly over $1.5 million; the highest award in a death case was $7 million and the lowest was
$250,000.
Ninety-four families of those who died on 9/11 declined to opt into the fund and sued the
airlines. Litigation stretched out over the subsequent years. By 2011, ten years after the events of
9/11, all but one of the 94 families had settled their claims. Susanna Kim, 9/11 Families, Except
One, Receive $7 Billion, ABC NEWS, Sept. 12, 2011, https://perma.cc/MCH4-SXBW. Ninety-two
of those claims were settled for a total of $500 million under the aegis of mediator Sheila
Birnbaum, a partner at Quinn Emanuel, who helped negotiate settlements between the families of
the decedents and the airlines. The average settlement award in the courts seems to have been
considerably higher than the $2 million average for families who received awards from the fund.
This may be due to selection effects, to the procedural effects of the fund (which discounted the
income of the highest earners and reduced awards for insured decedents)—or simply to the value
to be gained by being one of the hold-outs in a negotiation setting.
One vital question is why more families didn’t opt out. The reasons are likely varied. The
settlement fund gave out funds more quickly than the lawsuits did and required less
documentation and investment on the part of families. In theory, wealthy families like many of
those killed in the Towers would have had the most to gain from opting out of the fund—and
many of those presumably would have had the financial resources necessary to wait out a
protracted litigation. Yet there may have been other factors that led people to join the fund:
solidarity with other victims, patriotic support for the government program, or simply a desire for
closure. Families opting out of the fund also cited non-financial motives. Many families who
refused the fund stated that they were motivated by the desire to bring the case to trial to showcase
the misdeeds of the airlines. Does the fact that virtually all of them settled their claims tell us
something about the capacity of the tort system to air matters of public import?
Other Funds
Kenneth Feinberg goes where disaster calls. In 2013, in the wake of the Boston Marathon
bombings, Feinberg volunteered to administer a $60 million fund created by donations of private
individuals to support people injured or killed. He also worked pro bono for Virginia Tech in the
aftermath of a mass shooting in 2007. He also was employed by BP to manage a settlement fund
to compensate people injured by the oil spill in the Gulf of Mexico in 2010, to be discussed
further below. More recently, he has been hired by Penn State University to manage settlements
related to sexual abuse perpetrated by a coach of the Penn State football team.
These funds all have different sources and effects. The 9/11 fund was created by the
government; the Boston Marathon fund by private individuals; the Virginia Tech, BP Oil Spill
655