1 3CIHSEPC 1 UNITED STATES DISTRICT COURT 1 SOUTHERN DISTRICT OF NEW YORK 2 ------------------------------x 2 3 IN RE: 4 SEPTEMBER 11 LITIGATION 21 MC 97 (AKH) 5 ------------------------------x 5 6 New York, N.Y. 6 December 18, 2003 7 10:10 a.m. 7 8 Before: 8 9 HON. ALVIN K. HELLERSTEIN, 9 10 District Judge 10 11 APPEARANCES 11 12 KREINDLER & KREINDLER 12 Attorneys for Plaintiffs 13 BY: MARC S. MOLLER 13 JAMES P. KREINDLER 14 14 BAUMEISTER & SAMUELS, P.C. 15 Attorneys for Plaintiffs 15 BY: MICHAEL F. BAUMEISTER 16 DOROTHEA M. CAPONE 16 17 SPEISER KRAUSE NOLAN & GRANITO 17 Attorneys for Plaintiffs 18 KENNETH P. NOLAN 19 HANLY & CONROY, LLP 19 Attorneys for Plaintiffs 20 BY: PAUL J. HANLY, JR. 20 21 22 23 24 25 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 2 3CIHSEPC 1 APPEARANCES (Cont'd) 2 CONDON & FORSYTH 2 Attorneys for Defendant American Airlines 3 BY: DESMOND T. BARRY 3 4 FLEMMING, ZULACK & WILLIAMSON 4 Attorneys for Defendant 5 The Port Authority, et al. 5 BY: RICHARD A. WILLIAMSON 6 BRADFORD STEIN 6 JASON COHEN 7 7 8 JONES, HIRSCH, CONNORS & BULL, P.C. 8 Attorneys for Defendant Globe Aviation 9 BY: JAMES P. CONNORS 9 10 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 3 3CIHSEPC 1 (In open court) 2 THE COURT: Good morning everyone. 3 Mr. Baumeister, I will hear you in support of your 4 order to show cause. 5 MR. BAUMEISTER: Thank you, your Honor. 6 Good morning. 7 THE COURT: Good morning. 8 MR. BAUMEISTER: Your Honor, I am here this morning, 9 along with my colleagues, on a very simple proposition, and 10 that is the Fund closes down forever more midnight Monday, 11 December 22. I am interested, we are interested, in keeping as 12 many options open to the families as we possibly can, and we 13 believe, indeed, that we have been given this opportunity by 14 this court. The question is, am I seeking an advisory opinion? 15 No. Am I seeking an opinion on a matter that is in front of 16 this court? I believe so based on the following argument. 17 In your prior two orders, your Honor, in July and 18 November, you set up a suspense docket, and in that suspense 19 docket, which I relied upon and many of my colleagues relied 20 upon, we were given the opportunity to file a lawsuit and put 21 it into suspense for the sole purpose of filing documents, 22 filing pieces of paper with the Fund to determine if we could 23 get a fair and adequate award. 24 THE COURT: That wasn't the purpose. 25 MR. BAUMEISTER: All I can say, your Honor, is many of SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 4 3CIHSEPC 1 the individuals here, myself included, believed, what would be 2 the other reason for filing a suspense docket for the lawsuit 3 if not to pursue some kind of a claim. Not to elect a claim -- 4 THE COURT: Congress intended that people have until 5 December 22 to decide whether or not to go into the Victim 6 Compensation Fund. Because of shorter periods of limitations 7 in the New York statutes at that time, and in particular in the 8 Port of New York Authority contract implemented by statute, 9 there was a shorter period of limitations. That shorter period 10 of limitations derogated from the right that Congress gave. 11 In my view, and in response to requests and after 12 working it out with the special master, I provided that the 13 statute provided that a shorter period of limitations could be 14 satisfied by the filing and that there would not be an election 15 of remedies that could derogate against filing in the Victim 16 Compensation Fund if that lawsuit were put in suspense during 17 the period that is effective. I note also, it is my 18 recollection, that that election was not precluded by the 19 explicit terms of the statute, only by implication. 20 You are suggesting to me, in effect, the flip side of 21 what I did, and I am not sure that the flip side is a valid 22 exercise of my discretion and authority. 23 So please go into the statute and see what the statute 24 says. 25 MR. BAUMEISTER: All right, your Honor. If I could SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 5 3CIHSEPC 1 just get to the statute. If I could just answer the court's 2 point that you just made for one second. 3 THE COURT: Of course. Yes. 4 MR. BAUMEISTER: There would be no need to have a 5 suspense docket then, your Honor, because if that were the 6 situation, I have a case in suspense and now if by the mere 7 filing with the Victims' Compensation Fund, if that constitutes 8 an election, then there is no need for me to unsuspend my case. 9 It is over. I have made an election. 10 I think Congress intended two things. 11 THE COURT: Well, what's happened is that people have 12 stipulated to a voluntary dismissal of their lawsuit so it was 13 taken off the suspense calendar and dismissed, and indeed that 14 is what we are going to do. We are not looking to determine 15 what has been an automatic election. What we are doing is 16 seeking the cooperation of all of you to make the very 17 difficult administrative chores placed on us a little easier, 18 so that if people could go into the Fund, they will tell me 19 that in the form of a stipulation of dismissal. 20 MR. BAUMEISTER: Well, your Honor -- 21 THE COURT: If they don't stipulate, we will dismiss 22 it otherwise, as we have to. But it would be much easier for 23 us to do it by way of stipulation and order. 24 MR. BAUMEISTER: Maybe I am not making myself clear, 25 your Honor, and I apologize. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 6 3CIHSEPC 1 If we are on the suspense docket, Mr. Williamson's 2 position is, the mere filing of a piece of paper with name, 3 rank and serial number on it constitutes an election. If you 4 take that to its logical extreme, once you have therefore 5 elected, if the court would uphold Mr. Williamson's position, 6 there is no need for a suspense docket because you have 7 elected. 8 Congress said you can do one of two things. You, the 9 victim -- and what constitutes a waiver for purposes of 10 litigation, I would submit to the court, isn't a question of 11 regulation or regulatory interpretation, it is a question of 12 what constitutes a waiver of your right to proceed with one 13 forum or another. For example, Mr. Williamson's interpretation 14 is the mere filing of a piece of paper constitutes an election. 15 The regulations when you look at them, candidly, are not very 16 precise. The language, filing a submission, filing a claim, 17 submitting a claim, are not all very well clearly defined. 18 I will give you a little bit of history, your Honor. 19 Filing means you start the process. You cannot get 20 any kind of determination as to a preliminary assessment 21 without filing more than name, rank, serial number, without 22 giving economic data, without providing information, without 23 answering the Fund's questions and maybe even doing a hearing. 24 To do anything less than that is a meaningless exercise. So at 25 that point in time -- SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 7 3CIHSEPC 1 THE COURT: Your argument is you don't even have to 2 sign. 3 MR. BAUMEISTER: I'm sorry, your Honor? 4 THE COURT: You don't even have to sign. You don't 5 have to put your signature on it. 6 MR. BAUMEISTER: We don't. 7 THE COURT: No. Your argument to me is that in order 8 to constitute a filing, to begin the process with the special 9 master, all you have to do is put down your identity. You 10 don't even have to sign the paper apparently. 11 MR. BAUMEISTER: Apparently that is correct. So that 12 mere act of simply putting in a piece of paper, like 13 Mr. Williamson's interpretation, means we have elected when we 14 don't even know the number. 15 THE COURT: Mr. Schilling's submission this morning 16 seems to suggest that. 17 Is Mr. Schilling here? No. OK. 18 MR. BAUMEISTER: Continuing along with that line, your 19 Honor, the regulations themselves anticipated in the early 20 days, and they have been evolving and maturing with the intent 21 that we are all trying to get as many people into the Fund or 22 into litigation with a serious, reasonable consideration of 23 both options. One of those criteria is to look at what the 24 potential is in the Fund, weigh it against the risk benefits of 25 litigation, see what the spread is for a particular type of SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 8 3CIHSEPC 1 case, and we then have the clients make the decision as to 2 which option is the best. In fact, in your order you said, in 3 your November order, the Victims' Compensation Fund enacted a 4 procedure to permit families to submit preliminary application 5 without waiving the right to sue. You said that right in your 6 order on November 26th. 7 We relied upon the fact that we could submit a 8 preliminary application, get a number, get an assessment, have 9 a decision with the clients as to which was best. 10 The way the regs were originally written, it was 11 anticipated that when you filed the first piece of paper on 12 that 17-page form, you would then sign an immediate waiver of 13 your right to sue. That was anticipated in the early days. 14 That has gone by the boards. 15 Now the way the procedure works -- and I have a copy 16 of that order if you would like it, your Honor. 17 THE COURT: Would you hand it up? 18 MR. BAUMEISTER: I would. 19 Now, your Honor, the way the procedure works in the 20 evolution of the regulations, the way the procedure works 21 today, is the only time there is truly a meeting of the minds, 22 and we have submitted application after application, is since 23 the waiver of your right to sue is not done when you file your 24 claim, and that is why there is a lot of loose language in the 25 regulations. When you look at the regulations, it says you SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 9 3CIHSEPC 1 only submit "a claim" when you waive your right to sue, 2 consistent with congressional intent. 3 We all agree, including Mr. Williamson, that the 4 families are not going to try to get a recovery from the 5 Victims' Compensation Fund and a recovery in litigation. The 6 issue really is, when do the families elect one or the other. 7 You elect litigation when you have an active lawsuit; it is not 8 an election when you are in suspense. You elect the Fund, not 9 when you file a perfunctory document or you give them economic 10 data to give you a number, but you elect when you sign a waiver 11 form, which originally came at the beginning of the procedure. 12 And today the way the procedure works is I give the Fund, they 13 work very hard, they are doing a terrific job in trying to 14 bring everybody in. They now give me a number. Maybe we go to 15 a hearing. They come back, we negotiate, we talk, and then 16 there is an award. When I get the award and I say my client 17 will accept it, along with that award comes that signature page 18 with a waiver form, and it says right there, I accept the award 19 and I waive my right to sue. 20 THE COURT: So you're saying the election doesn't come 21 in until the client accepts the award. 22 MR. BAUMEISTER: Until there is a meeting of the 23 minds. Until the client signs the waiver. 24 THE COURT: Is that what the statute says? 25 MR. BAUMEISTER: The statute is circular. This is the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 10 3CIHSEPC 1 interesting thing. The statute, for purposes of submission -- 2 and Special Master Mr. Feinberg submitted to the court a letter 3 today taking no public position on this, but he did make the 4 distinction to the court of the difference between filing and 5 submitting. 6 When you look at the language in the regulation for 7 submission, which is different than filing -- 8 THE COURT: Let's go to the statute, Mr. Baumeister. 9 MR. BAUMEISTER: Your Honor, the statute, I would say, 10 doesn't give you a clear picture. When you look at submission 11 of the claim, as Mr. Feinberg cites it in his letter, and I 12 will give you the exact cite, and I have a copy of it, your 13 Honor, if you would like the regulation and his letter. 14 THE COURT: Section 405(c) -- 15 MR. BAUMEISTER: That is for filing, your Honor. 16 THE COURT: -- (3) says, Upon the submission of a 17 claim under this title, the claimant waives the right to file a 18 civil action or to be a party to an action. 19 MR. BAUMEISTER: The reason for that, your Honor, is 20 in the early days you were required when you submitted a claim 21 to sign the waiver form. That is not what happens in practice 22 today in most cases. So when the regulations were written, it 23 was written with the intent that you sign the waiver when you 24 submit your initial 17-page document. That doesn't happen. 25 If you look at the next section under (d), it says, SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 11 3CIHSEPC 1 submission of a claim, section -- do you have that, your Honor? 2 THE COURT: Where do you want me to look? 3 MR. BAUMEISTER: Subparagraph (d), submission of a 4 claim. 5 THE COURT: I have it. 6 MR. BAUMEISTER: Again, the regulations were written 7 as of the initial two years ago, but clearly encompassed within 8 congressional intent was election or election, you can't get 9 two recoveries. They define submission of a claim specifically 10 to say that the Act provides that upon submission of a claim 11 under the Fund the claimant waives the right to file a civil 12 action or to be a party in an action. 13 The only place that a claimant waives the right to a 14 civil action is in that waiver form that was originally 15 attached and filed two years ago but now comes with the award 16 letter when there is a meeting of the minds. I will take your 17 award, I have considered both options, and now I will go 18 forward and I will sign the waiver and I have clearly elected 19 and then we suspend. It is a complicated web, your Honor, but 20 that is the practical matter of where we are. 21 The suggestion by Mr. Williamson is that the mere 22 filing, much less the submission, the mere filing of a piece of 23 paper, signed or unsigned, subjects you to a litigation defense 24 that you thereafter -- put aside the regulatory language. For 25 your purposes and this courtroom, you have waived your right to SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 12 3CIHSEPC 1 proceed with litigation. 2 As I suggested, Judge, your two orders fly in the face 3 of that, the practice of what is going on flies in the face of 4 that. And, more importantly and overridingly, there is 5 absolutely no prejudice to Mr. Williamson or the defendants. 6 If 200 people are suing Mr. Williamson and 150 of them go in 7 and get a preliminary application, get a number they find 8 acceptable, and then elect the Fund with a waiver, that's 150 9 less people that are suing Mr. Williamson and his client and 10 the other defendants. To preclude the option of allowing us in 11 these last few days to do that, your Honor, will cause many 12 people to have a sword of Damocles over their heads and they 13 will not opt to run any risk by any defendant raising that 14 defense. 15 Why is it important in the last few days? There are 16 three categories of cases, your Honor. Those that were in 17 suspense that have applications pending and are providing 18 information. As an example, we give them the 17-page document, 19 we give them the economic data, we give them an expert's 20 report, they come back and say, We need A and B. We come back 21 with that, and then they say, We want to do a hearing. After 22 that, then they say, This is the number, and we talk about it. 23 Many of these cases, dozens, if not hundreds, in the suspense 24 category have filed a preliminary application, they have not 25 waived their rights, and they have elected to determine that SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 13 3CIHSEPC 1 number so they can weigh that number against the litigation 2 risk benefit and make a decision. That's hundreds of cases in 3 your suspense calendar. 4 Second category of cases. New York cases do not have 5 to file until March 11. There are New York people sitting on 6 the fence. They have neither filed nor have they filed with 7 the Fund yet. Now there is an avalanche of things coming in. 8 Many people are concerned, if I am thinking about litigation 9 and I file a mere piece of paper, then I am precluded from 10 litigating. What do I do? There is a tremendous amount of 11 confusion going on. The last thing we want to do is in a sense 12 take that group of cases and say, you're now suffering at the 13 hands of this bureaucratic procedure, you are now suffering yet 14 another tragedy. 15 A third group of cases -- 16 THE COURT: That doesn't seem to be a tragedy at all. 17 First of all, people know that if they don't file by December 18 22 in the simplified form that the special master has provided 19 and perfect it by January 22 they are out notwithstanding any 20 longer period of limitations in New York law. The period of 21 limitations in New York law deals with the right to sue, not 22 with the right to go to the Victim Compensation Fund. 23 MR. BAUMEISTER: Your Honor, I understand that. My 24 point is a little different. It is tragic in the sense of -- 25 THE COURT: There is no tragedy involved there. It is SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 14 3CIHSEPC 1 a matter of knowing -- 2 MR. BAUMEISTER: It is a poor choice. 3 THE COURT: -- knowing and understanding of rights, 4 and I suspect that you and your colleagues are doing what you 5 can to clarify people's positions. 6 There is another thing that bothers me, 7 Mr. Baumeister. You're saying that no election arises until 8 you decide to accept. Now, let's follow this through. 9 I provided in the order that you cite that if people 10 don't in effect tell me by February 6 their election of what 11 they did, they are out no matter what. Yet, you have told me 12 that if a person decides by January 22 to perfect something 13 that they submitted on December 22, then there is a hearing, 14 then there is a negotiation, then there is a discussion. That 15 February 6 date becomes academic because there is no election, 16 you say. In fact, you want me to keep the suspense docket open 17 until your clients decide to accept that which is offered by 18 the special master. 19 MR. BAUMEISTER: No, I do not, your Honor. 20 THE COURT: That seems to me the consequence of what 21 you are saying. 22 MR. BAUMEISTER: Let me see if I can tell you what it 23 is exactly that I want. 24 THE COURT: I will tell you right now I am not going 25 to do that. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 15 3CIHSEPC 1 MR. BAUMEISTER: I wouldn't want you to. I don't want 2 it to be open ended. 3 There are a couple of events that are going to 4 transpire. We know for sure December 22 you either get 5 something to the Fund or you are forever more precluded. 6 THE COURT: But under your theory everybody will get 7 something to the Fund because he wants to decide and keep it 8 open as long as possible, get what he can get from the special 9 master and then bring it to the defendants and say, do better. 10 This is the kind of leverage that I am not interested in 11 providing. 12 MR. BAUMEISTER: No. Your Honor, in that context, it 13 isn't that the defendants -- and I want to make it clear. No 14 defendants are negotiating with us on the litigation front. It 15 is not a question of trying to use one to leverage the other. 16 THE COURT: It seems to me that there is a motivation 17 on your part to take what you can from the Victim Compensation 18 Fund and then go to the defendants and say, why don't you 19 sweeten it a little bit and, if you do, I will give up the 20 lawsuit. I am not going to give you that. 21 MR. BAUMEISTER: That is not what I am asking you for 22 at this time at all. That is not happening right now. 23 THE COURT: Yes, but that is necessarily implied in 24 what you are saying. I am not saying you are going to do that, 25 I am just saying that I don't want to let you do that. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 16 3CIHSEPC 1 MR. BAUMEISTER: I understand that, your Honor. I am 2 really talking about two separate -- 3 THE COURT: If I were in your position, that is 4 something I would want to do. That is what you have to do to 5 protect your clients and get as much as you can for them, but I 6 am not going to let you do that. 7 MR. BAUMEISTER: Your Honor, I appreciate it. I hear 8 you. I want to make a clear point here, and I hope I can do it 9 succinctly. 10 There are two classes of cases that that becomes an 11 issue in. Yes, there is a potential for some of those cases to 12 go beyond March 11, the passenger cases in particular where 13 there could be potentially -- and I am not suggesting for a 14 minute that any defendants would agree to this or have even 15 agreed to it. There might be a way to have some kind of a 16 mixed result between the Fund and the defendants. But that is 17 not what I am talking about today. 18 What I am talking about today is something different. 19 And we will know after March 11, everyone who has the right to 20 sue will have sued. After December 22, everyone who has the 21 right to go into the Fund or everyone who decides to go into 22 the Fund will have to have done it. I am talking right now 23 about the second group of cases, the families that are faced 24 with a difficult decision. 25 I as a lawyer sit there and I say, If you are a ground SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 17 3CIHSEPC 1 victim, these are the risk benefits on appeal, collectability. 2 If you are an airplane victim that was involved in the tower 3 crashes, there is a separate set of risks due to 4 collectability. If you are a Shanksville, Pennsylvania, or an 5 American 77 Pentagon, there is a third set of risks. 6 In my professional judgment, client A, if we went to 7 litigation given the time, given the delay, given all of these 8 risks, a potential recovery could be this, but you have to 9 weigh the risk benefits. Mr. Baumeister, what do I weigh that 10 against? Well, we went to the Fund and we got an idea of what 11 the Fund would give you. Certainty, it's now this is the 12 benefit. You now, client, have to make a decision. 13 THE COURT: I understand. 14 MR. BAUMEISTER: Do I do A or do I do B? 15 THE COURT: As I understand the statute, Congress was 16 not interested in providing a complimentary remedy. Congress 17 was interested in providing an alternative remedy. The 18 beneficence of the American public was expressed in the Victim 19 Compensation Fund, but it was never intended to be an aid to 20 litigation. It was intended as an alternative to litigation. 21 Now, I have remarked in my decisions that people have 22 a choice, but your suggestion is that there is something 23 different than choice, and I just don't see it, Mr. Baumeister. 24 I don't see it. We have to go right back into the statute and 25 the regulations that you seem to be avoiding. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 18 3CIHSEPC 1 The statute seems to me to preclude that which you 2 advocate. I read it to you. 3 MR. BAUMEISTER: Your Honor, if I could, just on the 4 record and for the court, I want to make it absolutely clear. 5 I am not asking for this one system to compliment the other. 6 Clients can't make a decision about litigation or the Fund in a 7 vacuum. All we are asking is that the clients, the families, 8 be given the right to proceed to determine which option is best 9 for them, and the regulations -- 10 THE COURT: Mr. Baumeister, you and your colleagues 11 have had clients in the Victim Compensation Fund, I'm sure. 12 The special master has not been shy in telling people what they 13 might expect. You have a body of knowledge to make fairly good 14 judgments about what people are likely to get if they enter the 15 Victim Compensation Fund, and I believe that you are in a 16 pretty good position to advise the client about alternatives. 17 I don't see from a practical point of view why clients 18 need this kind of dispensation that you are requesting, and of 19 more importance, I don't see that there is discretion on my 20 part in the statute or in the regulations. 21 MR. BAUMEISTER: Your Honor, it is -- 22 THE COURT: That is what I have to follow. 23 MR. BAUMEISTER: OK. That is why I point you to the 24 regulations. 25 THE COURT: I am just a district judge. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 19 3CIHSEPC 1 MR. BAUMEISTER: Your Honor, first off, what Mr. 2 Baumeister may able to say -- there are hundreds of lawyers 3 representing clients in those three categories of cases right 4 now trying to make a decision before December 22. They don't 5 have that same body of knowledge. They don't want to have to 6 make an election by simply filing a piece of paper. 7 Number two, the regulations specifically provide, a 8 filing does not constitute an election, only a submission does. 9 THE COURT: Let me go into this with you. The one you 10 read is subsection (d) of Section 104.21. A claim shall be 11 deemed submitted for purposes of Section 405(c)(3)(B) of the 12 Act when the claim is deemed filed pursuant to Section 104.21 13 regardless of whether any time limits are stayed or tolled. 14 To go back under the definition of filing, and that is 15 in 104.21(a), the regulation reads, A claim shall be deemed 16 filed for purposes of Section 405(b)(3) of the Act (providing 17 that the special master shall issue a determination not later 18 than 120 days after the date on which a claim is filed) and for 19 any time periods in its part when the claims evaluator 20 determines that both the eligibility form and either a personal 21 injury compensation form or a death compensation form are 22 substantially complete. 23 Now that seems to suggest that the date of filing may 24 be later than the date of the submission. And the date of 25 election -- your colleagues seem to be agreeing with my SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 20 3CIHSEPC 1 reading -- and the date of election of remedies you're saying 2 is 120 days after the date of filing. So one thing will be 3 clear. We are not going to do anything based on that election 4 form. 5 The statute and the regulations provide a scheme, and 6 the purpose of the argument would now be confined to telling me 7 when is the date of election under this statute as defined by 8 the regulations. The date of submission, that is, by December 9 22, or the date of filing, which is when a claims evaluator 10 determines that the forms are substantially complete. 11 MR. BAUMEISTER: The point I made to you originally, 12 your Honor, these regulations were drafted when the submission, 13 when the filing and the waiver, which is part of section (d), 14 it says you cannot submit a claim unless, quote, the claimant 15 waives the right to file a civil action. 16 THE COURT: Mr. Baumeister, please don't reargue that 17 which I have already determined. 18 MR. BAUMEISTER: What I am saying to the court is that 19 the regulations -- 20 THE COURT: I will give you a chance. 21 MR. BAUMEISTER: -- the regulations, your Honor, are 22 such that the election occurs when there is a waiver of the 23 right. 24 THE COURT: Mr. Baumeister, please tell me how to 25 determine the statute. That is my guide. You keep on slipping SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 21 3CIHSEPC 1 away from the point. Don't do that. You are not an effective 2 advocate if you slip away from the point. If you have 3 something difficult, recognize it and deal with it. 4 The statute reads that the election comes upon 5 submission. What am I to do with that, Mr. Baumeister? Ignore 6 it? 7 MR. BAUMEISTER: No. Your Honor, I apologize to the 8 court. Upon the submission. Section (d) says, submission has 9 to include a waiver of your right to sue. 10 THE COURT: Where? 11 MR. BAUMEISTER: Section (d), first sentence. 12 THE COURT: It doesn't say it has to have an election. 13 It says, upon the submission of a claim there is a waiver. 14 MR. BAUMEISTER: That's the point. 15 THE COURT: So what is the definition of submission? 16 MR. BAUMEISTER: Submission -- and that is why I say 17 submission as originally defined in the regulations, there 18 wasn't a problem because you waived -- 19 THE COURT: It was the equivalent of filing. 20 MR. BAUMEISTER: Precisely. That's the point. 21 THE COURT: And so you're telling me that date can be 22 anything up to January 22. That is your argument. 23 MR. BAUMEISTER: That date can be -- that is the 24 position some people take, your Honor. For purposes of my 25 argument, it occurs when there is a waiver of your right. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 22 3CIHSEPC 1 That's a pure election. 2 THE COURT: I don't agree with that. So let's forget 3 about that. So the argument is going to be either an 4 equivalent to submission and filing as defined by the 5 regulation or something earlier than that. 6 MR. BAUMEISTER: Then, your Honor, if we fall back on 7 that position, if the court does not accept the concept of a 8 waiver has to be incurred before there is an election, we would 9 ask at a minimum, and the special master has publicly said this 10 and put it on his web site, that at a minimum in order to 11 protect these clients' rights you allow them to file a piece of 12 paper and it not constitute an election until, quote, it is 13 deemed substantially complete. 14 That is a fall-back position, your Honor. I still 15 stick by the waiver argument. But I believe if the court is 16 attempting to fashion a remedy here that allows the clients to 17 go forward and at least have some opportunity in those three 18 classes of cases, certainly filing papers and allowing them to 19 get substantially complete would be an alternative remedy for 20 the families. 21 THE COURT: Anybody else on the plaintiffs' side want 22 to add anything? 23 MR. MOLLER: Your Honor, I think the last point 24 Mr. Baumeister made is where I would like to start. 25 THE COURT: Why don't you take the podium. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 23 3CIHSEPC 1 MR. MOLLER: Good morning, your Honor. 2 THE COURT: Good morning. 3 MR. MOLLER: I think walking through the statute, 4 which is the road map that you suggest we follow, I think will 5 get us to the answer that everybody seeks here. 6 405(a) describes the filing of a claim in the words, A 7 claimant may file a claim for compensation under this title 8 with the special master, etc., etc. 9 You then turn to 405(c)(3)(B), limitation on civil 10 action. It says, upon the submission of a claim, rather than 11 upon the filing of a claim. The word submission is substituted 12 for filing in this ambiguously drawn statute. But filing and 13 submission in the statute are in all likelihood intended to be 14 synonymous. 15 In the regulations that were drafted, submission of a 16 claim is again the term used, and it is 104.21 of the regs. A 17 claim shall be deemed submitted for purposes of this Section 18 405(c)(3)(B) of the Act when the claim is deemed filed pursuant 19 to 104.21, regardless of whether any time limits are stayed or 20 tolled. 21 There is another provision which the special master 22 has put in here which discusses substantially completed, which 23 means that the trigger for effectively deeming something filed 24 occurs when the substantially completed standard has been 25 recognized in a particular case by the special master. So the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 24 3CIHSEPC 1 special master effectively holds the trigger as to whether 2 something should or should not be considered filed. 3 THE COURT: And he said that is not going to occur 4 until no later than January 22, 2004. 5 MR. MOLLER: That is what he said in the most recently 6 published materials, but there is also this 120-day period 7 issue. 8 THE COURT: That 120 days is for him to evaluate and 9 pay the claim, but that is triggered by the filing and 10 submission date. 11 MR. MOLLER: Right, but the substantially completed is 12 when the special master determines that the claim has been 13 deemed filed because I now have everything that I need in order 14 to decide the claim. 15 THE COURT: And that can come as late as January 22. 16 MR. MOLLER: So in terms of our immediate concerns -- 17 THE COURT: Your argument is keep the options open to 18 January 22. 19 MR. MOLLER: Right. And that imposes a mutual burden. 20 It imposes in a sense a burden upon the special master to help 21 us understand the value of our claims in terms of the data that 22 is being submitted. He can withhold his substantially 23 completed determination in the exercise of his discretion and 24 therefore not trigger action. From the standpoint of the 25 defendants, they don't really even have a dog in this fight SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 25 3CIHSEPC 1 because they want, I would think, to give every claimant -- 2 THE COURT: They should decide what is good for them, 3 not you. 4 MR. MOLLER: The point is they should not be objecting 5 before January 22 because the more people go into the Fund, the 6 less their exposure. 7 THE COURT: They are also concerned about leverage in 8 the way that I mentioned, at least they should be concerned. 9 I think I have the plaintiffs' arguments. 10 MR. MOLLER: I don't have anything to add. 11 MR. NOLAN: Your Honor, I would just like to point out 12 to the court that the special master issues a letter to each 13 family when the file is substantially complete. 14 THE COURT: The regulations seem to suggest that there 15 needs to be an evaluation of that nature. 16 MR. NOLAN: There is an actual document generated. 17 THE COURT: He is saying it is going to happen before 18 January 22. 19 MR. MOLLER: What the special master does, he sends 20 you a letter saying your file is now substantially completed 21 and that then would constitute filing. 22 THE COURT: I am not sure I am going to go along with 23 that, but let me hear Mr. Williamson. 24 MR. WILLIAMSON: Good morning. A couple of thoughts. 25 First, Mr. Baumeister said early on that they are not really SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 26 3CIHSEPC 1 seeking an advisory opinion. We submit that that is what is 2 happening and that the request to your Honor is inappropriate. 3 This isn't the first time. 4 THE COURT: It is a little different. The situation 5 is different. You made it very clear that you are going to 6 pursue a defense that if anyone has not completed a claim -- 7 I'm sorry. You are going to pursue a defense that if anyone 8 does anything with the Victim Compensation Fund in the way of 9 putting any kind of paper that will constitute a defense, in 10 your theory of elections remedies will be made. 11 The plaintiffs said there will be people, or there are 12 likely to be people who will put in some piece of paper in the 13 Victim Compensation Fund but not pursue it, never completing 14 their claim under a procedure that is allowed by the special 15 master, and they will decide before January 22 that they are 16 not going to pursue the claim, they want to pursue a lawsuit, 17 they want to have that right preserved and they need to know 18 that there is no defense. I don't see that this is not the 19 kind of a real case or controversy that would take this out of 20 the advisory opinion rule. 21 MR. WILLIAMSON: They do say that that might occur and 22 they do want to keep, in their words, their options open. 23 That's true. 24 With respect to our being clear on what our clients' 25 position is, you're right, and we felt that was the right thing SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 27 3CIHSEPC 1 to do. So that to the extent that people wanted to put forward 2 the proposition to your Honor and then rely on our silence to 3 their detriment, we felt that would be inappropriate. 4 THE COURT: Honorable thing to do, Mr. Williamson. 5 MR. WILLIAMSON: With respect to whether the 6 propositions being advanced by your Honor is one that you could 7 or should endorse, we submit that it is not for reasons you 8 have already articulated in the questioning. 9 THE COURT: But as the argument evolved, the 10 definition of filing and the definition of submission seems to 11 contemplate a January 22 date. 12 The special master has said that his interpretation, 13 which is final and absolute, is that as long as someone files a 14 piece of paper identifying the claimants by December 22, the 15 real information doesn't need to be put in until January 22, 16 and if that is done he will consider the submission and filing 17 date as a date of January 22 or whatever date the files are 18 complete. That would be the filing date. 19 Then I wonder in interpreting the statute whether I 20 should consider the regulation in that context and consider 21 that this claim has been submitted within the meaning of 22 statute 405(c)(3)(B) at the date that the filing is 23 substantially complete. 24 MR. WILLIAMSON: I think the analysis really doesn't 25 take us there, your Honor, and there are a couple of reasons. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 28 3CIHSEPC 1 First, leaving aside the question that a special 2 master's regulations cannot contravene the express terms of the 3 statute, nevertheless let's look at them and let's look at what 4 the special master's stated position is in the submission that 5 we just received today. 6 If you took plaintiffs' position to its logical 7 conclusion, it would mean that, in their words, filing a piece 8 of paper or submitting something, signed or unsigned, whatever 9 they want to call it -- sometimes they call it preliminary, 10 sometimes bare bones, today a piece of paper, whatever it is, 11 something that they can say doesn't constitute a filing of a 12 claim or the submission of a claim in the words of the statute. 13 We will get it in by next Monday and that will be OK because we 14 will satisfy the statutory deadline. But the logical extension 15 of that argument, your Honor, is if it isn't the submission of 16 the claim, you have missed the statutory deadline of Monday. 17 Now, that may not be a position that the special 18 master is going to advance, but that is not the point. The 19 point is it refines the analysis and it informs the analysis of 20 whether this proposition that we can somehow in our view 21 circumvent the provision of the statute, and you seized upon 22 the very one that I was going to reference, that upon the 23 submission of a claim, the claimant waives the right to file. 24 Congress did not -- we submit you're right again -- 25 intend the Fund and its generosity in the aftermath of this SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 29 3CIHSEPC 1 national tragedy to be more than an alternative to litigation, 2 but rather to be an alternative to litigation. Not an aid to 3 litigation, not a way of either inducing defendants or the 4 special master to pay more in such a circumstance. You are not 5 supposed to double dip here. You are supposed to decide you 6 want to take advantage of the generosity of this country and 7 submit to the special master and seek recovery. 8 The proposition that is advanced to you, among others 9 today, even though these are very sophisticated, experienced 10 lawyers who, as you note, have substantial experience with the 11 Fund, they tell you, but there are others out there, maybe they 12 don't know as much as we know about what the awards are likely 13 to be. But as your Honor noted in your Collaio decision, 14 through the tables of presumptive awards those who suffered 15 irreparable loss from the terrorist-related aircraft crashes of 16 September 11, 2001 are enabled to predict the awards for which 17 they are eligible. 18 So first we have more than a year of experience of the 19 plaintiffs' executive committee, which is in touch with other 20 plaintiffs. That is their representatives for the other 21 plaintiffs' lawyers as a liaison. And we have the point that 22 your Honor made. The special master has bent over backwards to 23 help people decide whether or not to file with the Fund. 24 In the letter submitted dated December 17 from 25 Mr. Schilling, instead of supporting the application, as SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 30 3CIHSEPC 1 Mr. Baumeister's affidavit in support of the order to show 2 cause would suggest, he doesn't do that. And further he says, 3 and I quote, Nothing that the special master has previously 4 said with respect to the filing of partial claims has indicated 5 any view on whether the filing of such a claim constitutes or 6 does not constitute an election of remedies. 7 He goes on to say, The process was established solely 8 to help people meet the December 22nd deadline. 9 So you really can't have it both ways. You really 10 can't say I submitted a paper, a piece of paper, a file, a 11 claim, a bear bones, a preliminary, but it doesn't count if I 12 decide later on that it shouldn't count and I want to pull it 13 back. I will say I didn't meet the deadline. 14 THE COURT: Let me see if I can put into statutory 15 terms that which you are telling me, Mr. Williamson. 16 Section 405(a)(1) provides that a claimant may file a 17 claim for compensation under this title with the special 18 master. Section 405(a)(3) provides that no claim may be filed 19 under that paragraph I read after the date that is two years 20 after the day on which regulations are promulgated under 21 Section 407. That date of two years is December 22. So that 22 is last date on which a claim may be filed. 23 405(c)(3)(B) provides, Upon the submission of a claim 24 under this title, the claimant waives the right to file a civil 25 action or to be a party to an action in any federal or state SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 31 3CIHSEPC 1 court for damages sustained as a result of the 2 terrorist-related aircraft crashes of September 11, 2001. 3 Now, the special master has liberalized the definition 4 of submission and filing. As long as a particular piece of 5 paper is filed within the December 22 deadline, two years, 6 satisfying Section 405(a)(3), the argument is that the date on 7 which that filing will be considered a submission can be as 8 late as January 22, 2004. Your argument to me, Mr. Williamson, 9 is that since the special master has in effect near absolute 10 power to implement the Fund that Congress will appropriate and 11 make decisions of award and distribution, that can't change the 12 statutory regime as to the election that comes from the act of 13 filing satisfying the December 22 date. 14 I am not going to preclude the right to file a civil 15 action thereafter. My analysis gives rise -- and I am not 16 saying that I am agreeing with Mr. Williamson. I want to think 17 about it a little more. But it gives rise to another issue. 18 We have a large number of cases that have been filed 19 and are under suspense, and arguably those already have been 20 filed in court and so may not be affected by the analysis that 21 I have just delivered since they already filed even though 22 suspended. But one could argue that after December 22 if 23 someone puts in any kind of paper that would constitute a 24 satisfaction of the two-year bar date and has not filed a 25 lawsuit by that period of time, that person is precluded. Will SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 32 3CIHSEPC 1 that be an appropriate way to reconcile the different 2 contentions that are being advanced? 3 MR. WILLIAMSON: If I follow your Honor's inquiry, I 4 think that the genesis of the Mulligan order, you correctly 5 recalled, that you yourself noted at the time when we were here 6 that there was a lacunae in the statute and created the process 7 of the suspense calendar for the reasons you articulated. 8 Our client wasn't in that instance prejudiced or its 9 interests weren't affected because it would be -- 10 THE COURT: Were not prejudice, you're saying? 11 MR. WILLIAMSON: Were not at that time. As you may 12 recall, Mr. Baumeister asked me a number of times during the 13 oral argument to consent to the process, to publicly consent, 14 and I couldn't do it, and you in fact noted that. But that 15 wasn't my issue. That wasn't our client's issue. If anybody's 16 issue, that was a Mr. Feinberg issue. 17 Mr. Feinberg's representative here that day said in 18 advance they would abide whatever your Honor decided. However, 19 you correctly noted that there was a lacunae in the statute on 20 that issue, but that doesn't mean that the converse proposition 21 is correct. 22 The converse proposition advocated today is that you 23 can really avoid an election of remedies. What you can do is 24 pursue dual remedies. You can, if we view the Fund as water, 25 you can dip your foot in the water and if you like the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 33 3CIHSEPC 1 temperature, you can stay in, and if you don't like the 2 temperature, you can take your foot out, we will make believe 3 you never put your foot in and instead you will start a 4 lawsuit. 5 THE COURT: But that was always the process up until 6 today. 7 MR. WILLIAMSON: Not so. 8 THE COURT: Well, under the way that I interpreted the 9 statute, or even though I didn't need to interpret it at all, a 10 person was allowed, it seems to me, to take a sounding from 11 Mr. Feinberg even without any piece of paper, because 12 Mr. Feinberg was accessible for that purpose, and get an idea 13 of how he would be treated before he made a filing. 14 MR. WILLIAMSON: Therein lies the distinction. 15 THE COURT: And then he could come and decide whether 16 to sue or not. 17 Now, some people took advantage of that and arguably 18 may have played one thing off against another and took 19 advantage of the metaphor that you just discussed in terms of 20 putting a toe into the water, but that was a procedure that was 21 alive. What Mr. Baumeister and his colleagues advocated is 22 that that procedure remains available until either there is a 23 substantial completeness of the filing or January 22, 2004 24 comes upon, whichever is earlier. 25 MR. WILLIAMSON: I submit that what they really want SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 34 3CIHSEPC 1 to do, in their words, is establish propositions that fly in 2 the face of the statute and are antithetical to the 3 congressional intent of creating the Victim Compensation Fund. 4 They really want to have it both ways and play one off against 5 the other. 6 THE COURT: What about lawsuits that are already on 7 file? 8 MR. WILLIAMSON: If the special master wished to 9 entertain an application, that was my first point, going back 10 to the genesis of the Mulligan order. If the special master 11 wanted to entertain an application to the Victim Compensation 12 Fund, notwithstanding that a lawsuit had been filed and placed 13 on the suspense docket pursuant to the Mulligan order, the 14 special master could entertain that, and his representative 15 said on that day in court they would abide that order. That 16 took care of that. 17 Now we have the converse proposition, and at least for 18 our clients the statement's been made today there is no 19 prejudice. Well, that is dead wrong. The prejudice to our 20 clients is the same as the prejudice to any defendant. 21 THE COURT: You are prejudiced by losing the right 22 that the statute has given. 23 MR. WILLIAMSON: Of course. If we took the analogy of 24 a statute of limitations and you say to somebody, why don't we 25 take away your statute of limitations defense, is that SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 35 3CIHSEPC 1 prejudicial? Of course it is. Exactly. 2 THE COURT: Any other defendant? 3 MR. WILLIAMSON: I had one more point, your Honor. 4 THE COURT: Yes. 5 MR. WILLIAMSON: I won't go back and quote the 6 propositions that were advanced to you that we submit are 7 directly contradictory to the statute. We have been over that. 8 The last point is, we submit, your Honor, that it is not in 9 these plaintiffs' interest for you to grant this relief. 10 I want to advance the thought, your Honor, obviously 11 it is in our clients' interest for these people to be able to 12 file with the Fund and hopefully receive awards that they find 13 satisfactory, but what would be the worst thing of all is for 14 them to continue with this notion that they can, in our view, 15 reinterpret or get around, what we say is really trying to 16 happen here, the statute, to then dip their foot in the water, 17 want to pull their foot out of the water and say now we have 18 decided we are going to go the other way, we are going to start 19 a lawsuit or activate a lawsuit, either way, brand new one, old 20 one, doesn't matter, have us and maybe other defendants, maybe 21 not other defendants, move to dismiss and succeed, because then 22 these people will receive nothing. They will receive no 23 compensation by continuing to pursue this tactic. 24 So we think in the end -- and I know they are not our 25 clients, but we care -- we don't think, frankly, it is in their SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 36 3CIHSEPC 1 interest for your Honor to grant this relief at the end of the 2 day. 3 THE COURT: What you are telling me is even if I 4 accept the plaintiffs' argument and rule that they may do what 5 they wish to do, you nevertheless have the defense, and in the 6 fullness of time an appellate court might agree with you and 7 disagree with me, assuming I take this position, and so what I 8 have given them would contractually not be theirs. 9 MR. WILLIAMSON: Right. 10 THE COURT: I guess that is what Mr. Baumeister is 11 going to have to think about. 12 MR. WILLIAMSON: Yes. 13 THE COURT: Mr. Barry. 14 MR. BARRY: I will be brief because I think there is a 15 position somewhere between that being advocated by 16 Mr. Williamson and that being advocated by the plaintiffs. 17 I think the statute, as you correctly point out, draws 18 a distinction between filing a claim and submission of a claim. 19 The only time that waiver is used, that word is used in 20 submission of a claim, I think that the special master has 21 publicly stated, and notwithstanding a letter today I think the 22 regulations support that submission of a claim is when the form 23 is submitted as substantially complete. That date, that 24 deadline, is January 22. I don't think it can be extended. I 25 think a reasonable interpretation of the statute as it stands, SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 37 3CIHSEPC 1 the language of the statute calls for a deadline of that date, 2 and that would be the election. I think that is a reasonable 3 interpretation, your Honor. 4 THE COURT: What about the argument that someone who 5 even puts a piece of paper in and has not filed a lawsuit is 6 precluded by the putting of a piece of paper into the Victim 7 Compensation Fund stating that he wants to go ahead? 8 MR. BARRY: And then is precluded from filing a 9 lawsuit thereafter? 10 THE COURT: Yes. That would allow anyone who is on 11 the suspense calendar to take advantage of the extra month but 12 not anybody else. 13 MR. BARRY: I think that call is the special master's, 14 and I don't see any language in the statute that would guide me 15 to give you a correct answer and interpretation for that. I 16 think the call is the special master's. I don't think that he 17 would take the position contrary to the interest of the victim 18 filing that piece of paper. 19 THE COURT: Thank you, Mr. Barry. 20 Last word, Mr. Baumeister. 21 MR. BAUMEISTER: Your Honor, just -- 22 THE COURT: Take the podium, please. 23 MR. BAUMEISTER: Your Honor, in a sense that is the 24 reason we brought this issue two years today before December 22 25 is because we do need some clear direction. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 38 3CIHSEPC 1 What Mr. Williamson is saying is, even if you give us 2 clear direction and allow us to do it, there is still a risk 3 because an appellate court may overturn it at some point. That 4 creates a real conundrum to all the plaintiffs' lawyers out 5 there who need publication of that or are filing these things 6 believing it may not be an election, and that causes us great 7 concern. 8 Focusing in on, agreeing that the court's 9 interpretation of submission equates to substantially complete, 10 and that can be either under the court's previous order where 11 you said, The compensation fund enacted a procedure to permit 12 families to submit a preliminary application without waiving 13 the right to sue and allowing these families until January 22 14 to complete supplementation of the preliminary applications -- 15 THE COURT: What are you reading from? 16 MR. BAUMEISTER: I am reading from your order, 17 November 26. 18 -- where there are lawyers out there who have received 19 this order, believe they can file a preliminary application 20 without waiving their right to sue, and what I am saying to the 21 court is the reason I press this issue to the court is to get 22 some clear direction as to what we can and cannot do in this 23 regard, accepting the court's definition that submission, 24 filing equates with substantially complete. Your Honor, we 25 would accept that, but I think the court has to make note to SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 39 3CIHSEPC 1 lawyers out there that will read this transcript and/or look at 2 your order that there is the caveat Mr. Williamson may 3 ultimately take this to an appellate court, even though the 4 other defendants in this case are not asserting it. 5 THE COURT: That is understood. 6 MR. BAUMEISTER: Thank you, your Honor. 7 MR. MOLLER: May I just say one thing -- 8 THE COURT: Yes. 9 MR. MOLLER: -- without being prolix. 10 It seems to me that part of the issue is whether 11 filing is a single event or a process. 12 THE COURT: I think the point has been made. 13 MR. MOLLER: 104.21 makes it clear. 14 THE COURT: Mr. Williamson, you wanted to say one more 15 word? 16 MR. WILLIAMSON: Just to, albeit codefense counsel, 17 just to disagree, if I understood Mr. Barry's thought, we would 18 submit on the question put to Mr. Barry that the answer is that 19 it is not the special master's call. 20 THE COURT: I have your argument. 21 I will take a short recess and then I will come back 22 with a decision or tell you I need to reserve. 23 (Recess) 24 THE COURT: I have been presented with an order to 25 show cause by the plaintiffs asking why an order should not be SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 40 3CIHSEPC 1 entered ruling that the mere filing of a preliminary 2 application with the Victim Compensation Fund, which is not 3 substantially complete for the purposes of obtaining a 4 preliminary estimate from the fund as to the amount of an 5 award, will not constitute an election of remedies or a defense 6 to a claimant's right to proceed with litigation. 7 I provided, in signing this order on December 16, 8 2003, that service was to be effected no later than noon 9 yesterday, December 17, and may I find, Mr. Baumeister, that 10 service was completed as ordered? 11 MR. BAUMEISTER: Yes, it was, your Honor. 12 THE COURT: All right. As stated in the motion, the 13 motion is denied, but I will grant relief as stated in the 14 short opinion that will follow, which I hope to edit and put on 15 the web page either tomorrow or Monday. 16 I hold that the filing of a claim for compensation 17 with the special master, as contemplated by Section 401(a) of 18 the Air Transportation Safety and System Stabilization Act, on 19 the form developed by the special master and satisfying the bar 20 date of December 22 will be considered under the regulations 21 promulgated by the special master as being submitted with 22 filing substantially completed on the earlier of the date that 23 it claims evaluator determines that the forms are substantially 24 complete as provided by Section 104.21(a) of subpart (B) of the 25 regulations, or January 22, 2004 as provided by the policy SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 41 3CIHSEPC 1 statement issued by the special master on December 22, 2003. I 2 guess it is an as of date. 3 Let me develop the reasoning. 4 Section 405(a)(1) provides that a claimant may file a 5 claim for compensation with the special master on the form 6 developed pursuant to subparagraph 2. Subparagraph 2 requires 7 the special master to develop a claim form that provides 8 various aspects of detailed information with respect to the 9 claimant -- the physical harm that was suffered, or death, the 10 possible economic and non-economic losses that the claimant 11 suffered, information regarding collateral sources of 12 compensation that the claimant has received or is entitled to 13 receive, and other information required by the special master. 14 Subparagraph 3 provides that no claim may be filed 15 after the date, that is two years after the date on which 16 regulations are promulgated under Section 407 of the Act, and 17 that date is December 22, 2003, four days from today. 18 The problem arises with respect to this motion 19 pursuant to Section 405(c)(3)(B)(i), which provides that upon 20 the submission of a claim under this title the claimant waives 21 the right to file a civil action or to be a party to any action 22 in any federal or state court for damages sustained as a result 23 of the terrorist-related aircraft crashes of September 11, 24 2001. There are exceptions which are not applicable and which 25 I do not have to read. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 42 3CIHSEPC 1 That means that if a claimant enters the Victim 2 Compensation Fund but decides to depart from it and to pursue 3 his right to go to law, there is a potential that the mere 4 entry into the special master's procedures may have constituted 5 an election, depriving the party of a right to a civil 6 recovery, and that would create the potential that a claimant 7 can obtain recovery in neither forum, neither the procedure 8 established as a reflection of the beneficence of the American 9 public in providing the Victim Compensation Fund or the right 10 known to law to sue to recover damages where the law allows 11 such recovery. 12 Now, if that is a result that is commanded by statute 13 or regulation, it is my job as a district judge to enforce it, 14 but whether or not there is election is a proposition that 15 follows upon a reading of the statute and the regulations and 16 procedures that have been promulgated pursuant to statute. And 17 as I held in Collaio v. Feinberg, my job is to give various 18 degrees of deference and respect to regulations and procedures 19 implemented by the special master. 20 The regulations provide under Section 104.21(a) that a 21 claim shall be deemed filed for purposes of Section 405(b)(3) 22 of the Act, and that is the provision which requires the 23 special master to complete his process of review, determination 24 and written notice of award not later than 120 days after 25 filing. So for that purpose the special master has stated that SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 43 3CIHSEPC 1 he will construe the Act and define filing as that date, and I 2 quote, when a claims evaluator determines that both the 3 eligibility form and either a personal injury compensation form 4 or a death compensation form are substantially complete. 5 Pursuant to the informational bulletin that was 6 provided to me by the government submission of this morning, 7 that date can happen no later than January 22, 2004. Now that 8 is a date, that filing date, that triggers the 120-day period 9 of review and determination. The statute, however, does not 10 necessarily decree results and consequences of a legal nature 11 from that date. 12 There are two dates with which we are concerned of 13 legal consequence. One is the date by when a claim must be 14 filed. That is, by December 22. That is under Section 15 405(a)(3). The second date of legal consequence with which we 16 are concerned is the date when a waiver to file a civil action 17 or to be a party to a civil action occurs, and that occurs 18 "upon the submission of a claim," as provided by Section 19 405(c)(3)(B)(i). 20 The regulations define submission. Section 104.21(d), 21 it provides that the section I just read of the Act provides 22 that upon the submission of a claim under the fund, the 23 claimant waives the right to file a civil action or to be a 24 party to an action in any federal or state court for damages 25 sustained as a result of the terrorist-related aircraft crashes SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 44 3CIHSEPC 1 of September 11, 2001 except for civil actions to recover 2 collateral source obligations. That is substantially the 3 language of the statute. 4 The regulations go on to provide in the same 5 subsection, the following: A claim shall be deemed submitted 6 for purposes of Section 405(c)(3)(B) of the Act -- that is the 7 Act section I just read -- when a claim is deemed filed 8 pursuant to Section 104.21 regardless of whether any time 9 limits are stayed or tolled. In other words, according to the 10 regulations duly promulgated, the act of waiver of remedy does 11 not occur until the filing date that has been defined for 12 purposes of the running of the 120 day-period. 13 The regulations thus equate the date of submission 14 from the date not when the process of filing occurs, but when 15 the process of filing is substantially complete, provided that 16 that date is not later than January 22, 2004. That is the 17 interpretation that I must respect, and barring some other 18 interpretation or policy that conflicts, that is the 19 interpretation I must follow. 20 I find no conflicting policy or interpretation that 21 would compete with the interpretation I just read out. Clearly 22 there has been a high degree of sensitivity on the part of the 23 special master with regard to providing information and 24 inviting filing of all those who suffered by the tragedy of 25 September 11. As the special master wrote, "I have spent SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 45 3CIHSEPC 1 almost two years in a determined effort to publicize the 2 September 11th Victim Compensation Fund of 2001 by traveling 3 throughout the nation, meeting with families, injured victims 4 and the general public. My goal has been to make sure that 5 every eligible claimant is aware of the program and has every 6 opportunity to file a claim with the fund. I have conducted 7 town hall meetings, sent personalized letters, authorized 8 notices to be published in newspapers, made web announcements 9 and coordinated with the airlines, charities, foreign 10 consulates and government agencies in an effort to explain the 11 benefits of the September 11th Victim Compensation Fund of 12 2001." 13 Now that degree of activity by the special master must 14 be respected. If the special master has provided a procedure 15 by way of encouraging people who have heretofore been almost 16 paralyzed by the tragedy and the aftermath of the tragedy of 17 September 11 for pursuing their rights, that procedure still 18 invites filings under the liberalized definition provided by 19 the special master. It would be cruel of the court not to 20 afford the same degree of sensitivity in the absence of some 21 strong policy that would conflict with it. As I say, I found 22 none. 23 We are talking whether or not an election should be 24 applied against cases that are already on file, albeit in 25 suspense, and liberally the process of election provided by SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 46 3CIHSEPC 1 Section 405(c)(3)(B) does not apply to already filed civil 2 actions. So one could argue that there is no ground of 3 election, at least until the filing is substantially complete 4 and prior to January 22, 2004. 5 I reject any right to keep the process open after 6 January 22, 2004. As you all know, I have taken the position 7 from the outset of these litigations that the litigations are 8 to proceed at their own pace. I have rejected efforts to stay 9 the litigation until the dates provided for going into the 10 Victim Compensation Fund pass, and I have moved this case in 11 terms of as much speed as the complexity of the case has 12 allowed. 13 To adopt Mr. Baumeister's suggestion of keeping the 14 potential of election open beyond January 22, 2004 would 15 conflict with that policy and make it extremely difficult to 16 continue with the lawsuits, and I as a judge owe it to the 17 litigants before me, and I think counsel owe it to the clients 18 who have elected to come into court and seek their remedies in 19 that fashion, to maintain that pace and to pursue the 20 litigation as if there were no Victim Compensation Fund. For 21 indeed, that has been the election of the parties choosing to 22 sue and who have not accepted the offer of the special master 23 even at this late date to come before. If they wish to sue, I 24 will provide the procedure looking to evaluate the rights and 25 obligations as the law provides. But that means that the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 47 3CIHSEPC 1 request to keep the process open until a later date, as 2 Mr. Baumeister suggests, would not be sensible and would 3 conflict from the policy of requiring proper speed of procedure 4 in the courts. 5 So I reject any date later than January 22, 2004 as 6 the date by which an election is to be provided. 7 In my previous order of November 26, I provided for 8 the elimination of cases on the suspense docket, and I held 9 that by February 6, 2004, approximately two weeks after the bar 10 date of January 22, 2004, that suspense docket will be 11 eliminated, either because the cases are dismissed by reason of 12 the election of remedies or because they will become active. 13 There will be no suspense docket after that date. The 14 whereas clause that Mr. Baumeister cited to me was intended by 15 me as a preliminary observation establishing the procedure of 16 ending the suspense calendar. It is this order that I issue 17 now that will control. 18 I hold that a claimant who satisfies the statutory 19 definition of filing a submission as defined by the regulations 20 by the process established by the special master for when that 21 filing becomes substantially complete, as long as it is before 22 January 22, 2004, will not constitute a waiver of the right to 23 file or maintain a civil action or to be a party to a civil 24 action as provided by Section 405(3)(B). 25 One modification. In dealing with the suspense SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 48 3CIHSEPC 1 calendar, there is another suspense calendar which has been 2 necessitated by my actions and by the pendency of review in the 3 Second Circuit with regard to injuries suffered by cleanup 4 workers in the aftermath of September 11 and which may or may 5 not be subject to removal. Without repeating the order I 6 issued in that respect, there are continuing proceedings in the 7 Second Circuit and which will be required before a magistrate 8 judge before that becomes complete, and my order today is not 9 intended to deal with that. 10 Have I missed anything? All right. 11 This will constitute my order. 12 The court stenographer has been kind enough to offer 13 to provide it to me electronically, so I will edit it and try 14 to get this out tomorrow, hopefully, and post it on the web 15 page so it will be notice to all, but all before me know what 16 the order is and may proceed accordingly. 17 I understand, Mr. Williamson, that it is your 18 obligation as counsel for the Port Authority to protect it in 19 all respects, an effort that you have been doing 20 extraordinarily well, and that you expect that the defense of 21 election will, notwithstanding my ruling of today, nevertheless 22 be filed on behalf of the Port Authority with regard to anyone 23 who enters the Victim Compensation Fund by submitting any piece 24 of paper, however you define it. And at some point in time 25 after this case is complete, then maybe an appeal and the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 49 3CIHSEPC 1 Second Circuit Court of Appeals may possibly hold contrary to 2 my ruling today. That is a risk that the plaintiffs will have 3 to run, and all I can do as a district judge is express my view 4 of the law as best I can, and I have done that. But my rulings 5 are subject to review, and that review can sometimes bring 6 about risks of frustration and disappointment to litigants who 7 follow the ruling I may have pronounced. That is the risk of 8 litigation that will have to be run. 9 Congress provided a long period of time within which 10 to make filings before December 22, 2003. A later filing in 11 the manner contemplated by the special master satisfying the 12 December 22 date by the submission of a form, by completing 13 that form later may create risk. But that is a risk that I 14 can't eliminate and which will remain in litigation. I just 15 want to make it clear to all concerned that if Mr. Williamson 16 and his client decide that they should proceed with that 17 defense, that is their right and I find nothing wrong or 18 improper in maintaining that right. 19 Thank you very much. 20 (Adjourned) 21 22 23 24 25 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300