N002578

By Facsimile And E-Mail

January 22, 2002

Kenneth L. Zwick, Director
Office of Management Programs
Civil Division
U.S. Department of Justice
Main Building, Room 3140
950 Pennsylvania Avenue
Washington, DC 20530

Re: September 11 Victim Compensation Fund of 2001

Dear Mr. Zwick:

The September 11th Victim Compensation Fund ("Fund")¹ represents the commitment of all Americans to aid the victims of that terrible day as fully, and as fairly, as possible.² NOW Legal Defense and Education Fund is a leading national non-profit civil rights organization that performs a broad range of legal and educational services to define and defend women's rights. We are based in lower Manhattan, and our staff has been deeply affected by the attack on our city and our nation that day. We offer these comments in the same spirit of compassion with which the Special Master attempts to help the victims if this tragedy, and with the hope of ensuring that the Fund represents America's most cherished values, including the equality of all persons before the law.

Many of the victims of the September 11th attacks were woman, the majority of whom worked full time. Many of these women were also members of racial and ethnic minority groups, as were large numbers of the tragedy's male victims.

We are concerned that the Interim Final Rule setting forth federal regulations to implement the Fund may discriminate against and threaten the constitutional rights of the victims of the terrorist attacks, through the Fund's anticipated use of gender - and race-based date to determine compensation.³ This practice, we believe, threatens the constitutional rights of women and minorities, spinning into the future a history of state and private discrimination against these groups.

Troublingly, the anticipated use of such gender- and race-based data has not been disclosed by the government in the Rule itself or in any of the explanatory materials provided to potential claimants and the public to date (see infra). This seriously undermines the government's effort to ensure that potential claimants can make "informed decisions regarding whether to file claims with the Fund.⁴

Further, we believe that the Rule undervalues women victims' contributions to their families and society. Whether or not they are employed full time, women in America perform the lion's share of essential, unpaid services including care-giving and household work. Such work is typically compensated under tort law, yet the Fund's approach fails to capture the Significant value of this labor.

The Fund's Anticipated Reliance On Gender- And Race-Based Data To Determine Compensation Threatens The 9-11 Victims' Constitutional Right To Equal Protection.

Given the interest all Americans have in ensuring that the compensation process treat victims equally and fairly at every stage, we urge the Special Master not to use gender and race as factors in calculating compensation, whether to estimate victims' worklife and future earning capacity, or for other purposes. As discussed further below, we are extremely concerned that the public and potential claimants do not understand that the Fund may consider the victims' gender and race in establishing awards, and indeed, may have been misled into believing that only factors of age, marital status, past income and number of dependents would be relevant.

The stubbornly persistent wage gap between men and women, and between whites and racial and ethnic minorities, ⁵ derives from a long history of government and private discrimination which has favored male and white workers. In large part due to the commitment of the U.S. government to eradicating discrimination and combating this legacy, ⁶ women and minorities enter the workforce today with the hope that their careers will not be clouded by past or present biases against them, and that they can pursue every opportunity available to all Americans. Courts have rejected and legal scholars have questioned the use of gender-and race based data to determine damages, because their use is inherently unfair to women and minorities.⁷ When the government itself chooses to use such data, we must consider not just the unfairness to individuals but the threat of serious constitutional violations.⁸ Specifically, we believe that the Fund's anticipated reliance on gender-specific and race-specific data not only perpetuates discrimination against women and minorities, but will violate the September 11th victims' equal protection right under the Fifth Ammendment. See U.S. Const amend. V ("No person shall ... be deprived of life, liberty, or property without due process of law.") Victims' rights may also be violated under state constitutional guarantees of equal protection. In the states in which large deprived of life, liberty, or property,. without due process of law,"). Victims' rights may also be violated under state constitutional guarantees of equal protection. In the states in which large numbers of potential claimants reside, separate equal protection guarantees exist; in some cases these are more protective than the federal constitution.⁹ Some of these states have equal rights amendments, which offer additional constitutional protection against gender-based violations of equal protection.¹⁰ Some also have constitutional guarantees of "open access" to the courts: denial of full compensation for injuries on the basis of race or gender may violate these "remedies clauses."¹¹

Classifying victims of the September 11 tragedy by their gender and race for the purpose of determining compensation is an invalid use by the government of suspect classifications that will not withstand constitutional scrutiny. As a threshold matter, the Fund's reliance on gender and race would undoubtedly constitute state action, bringing it within the reach of the Equal Protection Clause. Congress established the Fund "to provide federal money to victims and their families," in return for which the claimants must give up their right to sue airlines and other entities.¹² The Department of Justice oversees administration of the Fund, including development of and implementation of procedures to determine claimants' eligibility and compensation.¹³ All aspects of the Fund's conception and implementation are thus clearly conduct attributable to the federal government and reached by the Equal Protection Clause.

Under equal protection analysis, the government must justify its decision to classify the victims and claimants by their gender and race. There has been for decades a strong presumption in American law that gender classifications favoring men or women are invalid. U.S. v. Virginia ("VMI"), 518 U.S. 515, 541-42 (1996); J.E.B. v. Alabama ex rel. T.B., 511 U.S. 127 (1994). It is the government's burden to show that its justification for gender classifications is "exceedingly persuasive." VMI, 518 U.S. at 531 (state institution's male-only admissions policy invalidated where government failed to show "exceedingly persuasive justification" for gender-based classification). the gender-based worklife tables are predicated upon data that captures and continues a long history of discrimination against women, often based upon stereotypes about women's abilities and preferences. See, e.g., Miss. Univ. for Women v. Hogan, 458 U.S. 718, 730 (1982) (government's gender-classification reflected and perpetuated stereotypes about the sexes' labor force participation). In using this data, the government will rely on "overbroad generalizations about the different talents, capacities, or preferences of males and females,"¹⁴ This will result in many women victims and their survivors receiving lower compensation than identical situated men, and will therefore "perpetuate the legal, social, and economic inferiority of women."¹⁵

Title VII, too, has been used to strike down the use of gender-based actuarial data as discriminatory against women.¹⁶ Thus the Supreme Court explained in Manhart that "in forbidding employers to discrimination against individuals because of their sex, Congress intended to strike at the entire spectrum if disparate treatment of men and women resulting from sex stereotypes...[federal anti- discrimination law] subjects to scrutiny and eliminates such irrational impediments to job opportunities and enjoyment which have plagued women in the past."¹⁷ And in Norris, the Court reiterated that sex-based classification of employees based on actuarial assumptions about longevity violated Title VII as "flatly inconsistent" with the federal law's requirement that "employers... treat their employees as individuals, not 'as simply components of a racial, religious, sexual, or national class.'''¹⁸

In this light, it is highly unlikely that any plausible governmental objective in using gender-based information-such as efficiency or accuracy-will be "exceedingly persuasive."¹⁹ This is especially so when the Special Master has indicated that one major Fund goal is to treat claimants fairly based on their individual and unique circumstances. Rule, at page 66274 (Fund goal to provide "just and appropriate" compensation "in light of "individual circumstances" analyzed beyond any "theoretically possible future income stream"). Compensating similarly situated claimants differently solely on the basis of their gender ignores the victims' "individual circumstances" in favor of projections of expected future earnings based in part on historic prejudices. This is especially unjust and ironic at a time when the United States' role in advancing the equality of women both here and abroad remains so urgent.

The equal protection argument against the Fund's use of race-based tables runs along similar lines, and is arguably even stronger. Under federal constitutional jurisprudence, race is a "suspect classification," reviewed under "strict scrutiny": a test that is very seldom met. See, e.g., Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 235 (1995) (strict scrutiny test applies to determine whether race-based classifications violate equal protection) ("Federal racial classifications...must serve a compelling governmental interest, and must be narrowly tailored to further that interest").

By guaranteeing equal protection to persons of all races and ethnicities, the Constitution recognizes that" [r]acial and ethnic distinctions of any sort are inherently suspect and thus call for the most exacting judicial examination." Regents of Univ. of Cal. v. Bakke, 438 U.S. 265, 291 (1978) (opinion of Powell,J.). See also Hirabayashi v. United States, 320 U.S. 81, 100 (1943) ("distinctions between citizens solely because of their ancestry are by their very nature odious to a free people whose institutions are founded upon the doctrine of equality."). The Supreme Court makes little allowance even for "benign" racial classifications which are designed to remedy past discrimination, see Adarand, 515 U.S. at 227; City of Richmond v. J.A. Croson Co., 488 U.S. 469 (1989) (minority set asides invalid under strict scrutiny because city failed to show narrowly tailored fit between compelling government interest and program).

Far from being benign, the use of race-based data will penalize victims of September 11 and perpetuate a history of government-sponsored and private bias against racial minorities. Moreover, in an increasingly racially and ethnically diverse society, efforts at categorizing the thousands of victims accurately and fairly on the basis of perceived racial and ethnic group membership is likely to be both inaccurate and unmanageably complex.²⁰

The Fund may suggest that its objectives in using race-based tables are greater efficiency or accuracy. However, this is not likely to be a "compelling" governmental objective supporting racial classifications where the task of ascribing racial and ethnic identities to the victims is likely to be complex and inaccurate. In any case, the goal of efficiency and accuracy can be well-met by the Fund's consideration of non-suspect classifications, such as age, income history, and marital status, which experts have long relied upon to assess projected future earnings. The Special Master's hearings will give the government amply opportunity to consider claimants' "individual circumstances" and award fair compensation without resorting to gross, overbroad generalizations about race which seem likely to violate the constitutional guarantee of equal protection.

The Fund Has Misled The Victims And The Public About Its Planned Reliance On Gender And Race.

the Special Master's Office has, under questioning from attorneys, journalists, and experts in the field of tort compensation, acknowledged that claims may be assessed based in part on the gender and race of the victim.²¹ Unfortunately, the government had not been candid about this possibility with potential claimants, or the American people.

We are not aware of any part Rule or other materials made available in which the Special Master or Department of Justice acknowledged that the government anticipates using the victims' gender and race to determine compensation.²² to the contrary, the Rule and other information have been quite misleading on this point. For example, the Rule states that the methodology will be based on the claimants' "readily identifiable" traits, and names among these the claimants' "age, prior income levels, marital status, and the number and ages of the victim's dependents."²³ No mention is made of gender or race. Similarly, the Presumed loss Calculation Tables Before any Collateral Offsets Chart ("Chart"), which potential claimants are invited to consult to estimate their compensation, appears to aggregate gender-based and race-based information.²⁴ Persons consulting the Chart will find the same list of relevant "traits" mentioned in the Rule: age, marital status, income and number of children of the victim, but the Chart's prefatory language strongly ---and misleadingly-- implies that women and men will be treated alike, by stating that the calculation of compensation "assumes that each person would have worked a number of years equal to the average expected worklife across the nation for males and females of the same age as the victim." See Chart, page 2. ²⁵

Because of the lack of clarity and condor from the government on this important issue, we are concerned that potential claimants remain unaware that the gender and race of the September 11 victims threatens to reduce the compensation available for women and members of racial minorities and violate their constitutional rights.

The Fund Will Discriminate Against Women Victims In its Valuation Of Unpaid Services.

According to the Rule, presumed economic loss for victims does not take into consideration the true economic value of household services performed by the victims of the September 11th tragedy. The unpaid household services at stake may include such tasks as housecleaning, cooking, car-pooling and lawn-mowing; compensation for unpaid services must include care-giving, such as assisting children with school work or helping an older relative, as well. The Rule compensates claimants with a lump sum for non-economic components of "replacement services loss."²⁶ As it relates to the valuation of economic losses, however, the Rule only compensates replacement services for those victims who had no prior earnings or worked only part time outside the home.²⁷ Yet full time workers, too, perform valuable household services, and failure to fully compensate those services will fall hardest on women victims and their survivors, because working women typically perform a greater amount of these services than men.

It is accepted practice for courts in New York and beyond to compensate victims, including those who work full-time, for the value of replacement services for their household work.²⁸ Moreover, Congress contemplated economic losses to be construed by the Fund with reference to state law.²⁹ In New York State wrongful death actions, for example, plaintiffs may recover all "fair and just compensation for the pecuniary injuries resulting from the decedent's death."³⁰ New York courts have interpreted "pecuniary injuries"--or economic losses-- to include the loss of household services, and have not carved out as exception for full time workers.³¹ The federal courts have also recognized that the loss of a working woman's household services are recoverable, economic losses.³²

While under-compensating all full time workers, we are especially concerned that the Rule's calculations will have a disproportionately negative impact on women victims, because women continue to perform more household services than men, though each case must be viewed individually. Thus, one study has shown that married women working full time with children under the age of 18 perform approximately 35.6 hours of household services per week, as compared to 26.9 hours performed by men. ³³ Therefore, women victims and their survivors are likely to be disproportionately harmed by the Rule's treatment of economic losses. By ignoring the extent and worth of unpaid, household services performed by victims who worked full time when calculating economic losses, the Fund fails to capture value of these "second shift" contributions.³⁴

Conclusion

We appreciate the enormity of the task facing the Special Master, especially as emotions about the process run high. The terrorist attacks on September 11th were not simply "torts" and the September 11 Victim Compensation Fund is not merely a fund to compensate victims of the tragedy. Even in this climate of pitched emotions, basic principles of fairness - some of which are constitutional in scope - must be honored in administering the Fund. Ignoring these principles threatens the rights of women and minorities, and perpetuates the long history of government and private discrimination against these groups.

Sincerely yours,

Comment By:
NOW Legal Defense and Education Fund
NEW YORK, NY

---

¹ Created pursuant to Title IV of the Air Transportation Safety and System Stabilization Act, 49 U.S.C. § 40101 (2001).
² See September 11th Victim Compensation Fund of 2001; 66 Fed. Reg. 66,273, at 66,274 (Dec. 21,2001) (to be codified at 28 C.F.R. pt. 104) (Rule")
³ See e.g., Stephanic Saul, Less for Women? Work Life Statistics May Limit Sept. 11 Fund Payouts to Victims, Newsday, Jan. 4, 2002 (Fund plans to use gender-based worklife statistics). We understand that the Fund plans to use statistics identical to or based in part or whole upon data presented in the Bureau of Labor Statistics' Worklife Estimates: Effects of Race and Education (bulletin 2254) (Feb. 1986) (gender-and race-based estimates of working life and labor force behavior, derived from data through 1979-80) (available at http://www.bls.gov/cps/cpsb2254.pdf). Communication with Kurt V. Krueger, Senior Economist, John O. Ward & Assoc., Inc. (Jan. 17, 2002).
⁴ Rule, at 66275
⁵ See U.S. Department of Labor, Chapter 2, Futurework: Trends and Challenges for Work in the 21st Century (1999) (available at http://www.dol.gov/asp/futurework/report.htm) (last visited January 17, 2002) (analyzing wage gap between women and men and between white men and minority men; finding that over 40 percent of the pay gap between men and women is generally "interpreted as discrimination'; a "glass ceiling" blocks advancement of both minority men and women).
⁶ Among these are federal anti-discrimination measures such as the Equal Pay Act of 1963, which amends the Fair Labor Standards Act, Title VII of the 1964 Civil Rights Act, and Executive Order 11246.
⁷ See, e.g., Wheeler Tarpeh-Doe v. United States, 771 F. Supp. 427, 457 (D.D.C. 1991), rev'd on other grounds, 28 F.3d
120 (D.C. Cir. 1994) ("[I]t would be inappropriate to incorporate current discrimination resulting in wage differences between the sexes or races or the potential for any future such discrimination into a calculation for damages resulting from lost wages."); Martha Chamallas, The Architecture of Bias: Deep Structures in Tort law, 146 U. Pa. L. Rev. 463 (1998) (devaluation of female and minority lives in tort compensation); Note and Comment: Toward Gender-Neutral Data For Adjudicating Lost Future Earning Damages: An Evidentiary Perspective, 72 Chi-Kent, L. Rev. 299 (1996); Martha Chamallas, Questioning the Use of Race-Specific and Gender-Specific Economic Data in Tori Litigation: A Constitutional Argument, 63 Fordham L. Rev. 73 (1994).
⁸ See generally on the constitutional problems with use of gender-and race-based data to calculate damages Chamallas, Questioning the Use of Race-Specific and Gender-Specific Economic Data in Tort Litigation, supra note 7.
⁹ see, e.g., Aliessa v. Novello, 96 N.Y.2d 418, 754 N.E.2d 1085 (N.Y.2001) (state statute denying permanent resident legal aliens Medicaid benefits unconstitutional in violation of federal and New York state equal protection clauses); Tomarchio v. Twnshp. of Greenwich, 379 A.2d 848, 851 (N.J. 1977) (under state equal protection analysis, gender-based classifications found suspect when state required proof of dependency requirements of widowers, not widows); Planned Parenthood v. Farmer, 165 N.J. 609, 630 (2000) (state equal protection analysis adopted differing from federal analysis and leading to broader protection of fundamental rights).
¹⁰ Connecticut, for example, has adopted an ERA and applies strict scrutiny to state-based equal protection claims. See Conn. Const. art. I, § 20; Page v. Welfare Comm'r, 365 A.2d 1118, 1122 (Conn. 1976) (strict scrutiny applied to administrative, gender-based classification distinguishing between husbands and wives in computing duty to support parents).
¹¹ See Chamallas, Questioning the Use of Race-Specific and Gender-Specific Economic Data in tort Litigation, supra note 7, at 104 n.218 (discussing additional state constitutional bases for challenging gender- and race- based tables in tort cases); see also, e.g., CONN, CONST. Art 1, § 10 ("All courts shall be open, and every person, for an injury done to him in his person, property or reputation, shall have remedy by due course of law, and right and justice administered....").
¹² See September 11 Victim Compensation Fund of 2001, 49 U.S.C. § 40101 (2001), at tit, 4, § 403 (purpose of Fund).
¹³ See id. at tit. 4, § 404 (administration of Fund).
¹⁴ VMI, 518 U.S. at 533.
¹⁵ ID., 518 U.S. at 534.
¹⁶ Title VII of the 1964 Civil Rights Act, 42 U.S.C. § 2000e et seq., provides that "it shall be an unlawful employment practice... to discriminate against any individual... because of...sex." 42 U.S.C. § 2000e-2(a)(1). See Los Angeles Dept. of Water and Power v. Manhart, 435 U.S. 702, 707 n, 13 (1978) (internal citation omitted); id. at 708-709 (holding that a pension plan requirement that men and women make unequal contributions to the plan, for the asserted reason that women live longer than male as a class, violated Title VII, and rejecting employer's argument that requiring female employees to make larger pension contributions than male employees is not discriminatory because, "unless women as a class are assessed an extra charge, they will be subsidized, to some extent, by the class of male employees").
¹⁷ See Manhart, 435 U.S. 702, 707 n.13 (1978) (internal citation omitted).
¹⁸ See Arizona Governing Comm'ee v. Norris, 463 U.S. 1073, 1081 (1983) (quoting Manhart, 435 U.S. at 708).
¹⁹ VMI, 518 U.S. at 531.
²⁰ See generally U.S. Census Bureau, Overview of Race and Hispanic Origin (2000), available at htt://www.census.gov/prod/2001pubs/c2kbr01-1.pdf) (discussing complexity of making accurate classifications of race and ethnicity in the United States).
²¹ See Saul, Less for Women? Work Life Statistics May Limit Sept. 11 Fund Payouts to Victims, supra note 3, quoting Michael Rozen, deputy Special Master: "When we are presented with the individual facts, we will certainly take into account differing worklife expectancies between men and women." The Newsday article noted that dr. John Ward, among other economists, had raised question of whether gender-based worklife data would be used, and fact that Fund had not released gender-based tables to outline how compensation process would work. Id.
²² On January 22, 2002, a document titled, "Victim Compensation Fund, Frequently Asked Questions, Volume I, Updated January 22, 2002" was posted on the Fund's website at http://www.usdoj.gov/victimcompensation/adv_bene_faq.pdf. This document appears to reference the anticipated use of gender, at page 8, in a chart indicating worklife for men and women. There is no discussion in this document of which we are aware about any intended use of race or ethnicity. Given that the Chart and other materials have made no reference to either gender or race, we remain concerned that the victims and the public are not fully informed about how- -and more importantly, why--the gender and race of the victims will be used to determine Fund compensation.
²³ Rule, at page 66278.
²⁴ The chart and accompanying pages of explanatory text arc available at http://www.usdoj.gov/victimcompensation//loss_calc.html (last visited January 17, 2002). ²⁵ In addition the Department of Justice's website refers the public and potential Fund claimants to a website run by a volunteer legal organization, Trial Lawyers Care, Inc, ("TLC"). TLC'S WEBSITE Also makes no mention of the fact that claimants may be divided by gender and race/ethnicity. TLC informs the public that "The Special Master calculates presumed economic and noneconomic losses based on each claimant's circumstances: including factors of age, prior income levels, marital status, and the number and ages of the victim's dependents." See Trial Lawyers Care, Inc., "FAQ," available at http://www.911lawhelp.org/info/faq.htm (information provided in answer to question, "Before I apply for compensation from the Fund, I'd like to get an idea of what I might receive. Is there any information on this?") (last visited January 16,2002). TLC submitted it's own comments and concerns about the Rule; these are available at http://911lawhelp.org/info/news/dec20.htm (last visited January 22, 2002).
²⁶ Rule, at pages 66,287 (compensation for noneconomic losses, including replacement services).
²⁷ Rule, at page 66,286 (compensation for economic losses, including replacement services).
²⁸ See, e.g., Cramer v. Kuhns, 213 A.D. 2d 131, 139 (N.Y. 1995) ("We have long considered an injured plaintiff's loss of household services to be a quantitative economic loss separate and apart from pain and suffering.") ; DeLong v. Cry. of Erir, 89 A.D. 2d 376 (N.Y. 1982), aff'd 60 N.Y.2d 296 (1983) ("It has long been recognized that pecuniary advantage results as well from parental nurture and care, from physical, moral and intellectual training, and that the loss of those benefits may be considered within the calculation of "pecuniary injury") (citations omitted).
²⁹ See September 11 Victim Compensation Fund of 2001, 49 U.S.C. § 40101 (2001), AT TIT. 4 § 402(5) (Definition Of "Economic Loss")
³⁰ N.Y. Est. POWERS & TRUSTS LAW § 5-4.3(a) (McKinney 2001)
³¹ See, e.g., Shue v. Red Creek Central Sch. Dist., 266 A.D. 2d 899 (N.Y. 1999) (damages awarded for loss of decedent's earnings, household services and parental guidance).
³² See, e.g., Winbourne v. Eastern Airlines, 758 F.2d 1016 (5th Cir. 1984) (decedent wife's household services and salary as teacher together comprised economic losses).
³³ See John Ward Economics, John Ward Economics Time-use Analysis (unpublished manuscript, on file at NOW Legal Defense).
³⁴ See generally Arlie Hochschild, The Second Shift: Working Parents and the Revolution at Home (1989) (working women's unpaid household services and caregiving).

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