September 11 And Airline Protection/Victim Compensation Programs

Far beyond the criminal and national security ramifications of the September 11 terrorist attacks are the legal liability issues. And, of course, Congress managed to further confuse matters when it passed a law providing relief to the airlines, including liability limitations. AVweb's Phil Kolczynski examines the current state of the law and what impact, if any, there may be on either the affected airlines or on plaintiffs.


Far beyond the criminal and national security ramifications of the September 11 terrorist attacks are the legal liability issues. And, of course, Congress managed to further confuse matters when it passed a law providing relief to the airlines, including liability limitations. AVweb’s Phil Kolczynski examines the current state of the law and what impact, if any, there may be on either the affected airlines or on plaintiffs.

Phil KolczynskiPerhaps no single event in the history of the aviation industry has caused such immediate an impact and potential long-term damage as the terrorist attacks of September 11. The terrorists chose to attack America through the aviation industry. The resulting fear has all but put the airlines out of business. Tens of thousands have lost jobs. At least 6,000 people were killed and over 8,000 were known to be injured. Legal claims for losses are estimated between $10 and $15 billion.

Eleven days after the September 11 disaster, Congress passed emergency airline bailout legislation designed to provide unprecedented financial/liability protection for domestic air carriers. In its rush to act, Congress left many other elements of the aviation industry unprotected. Unfortunately, extreme pressure to act precipitously may also have created unnecessary problems for those who must implement the well-intended protection of Congress. Airline managers may succeed in restoring pre-September flight schedules. The people of the United States may return to flying rather than fearing. Will the bailout/liability protection measures work to protect the airlines against financial disaster because of $10 to $15 billion of lawsuits?

This article will discuss the legal issues associated with the airline bailout legislation, including an analysis of the Air Transportation Safety and System Stabilization Act, legislation conceived and passed by Congress and then enacted into law by President Bush in the days immediately following the September 11 terrorist attacks.

The September 11 Victim Compensation Fund (the “Fund”) was specifically designed to shield the airlines against anticipated lawsuits by the victims of the September 11 disasters. On September 22, 2001, President Bush signed into law the “Air Transportation Safety and System Stabilization Act” (the “Act”). Title IV of Public Law 107-42, 115 Stat. 230 (2001). The Act provides for mega-buck airline financial stabilization, unprecedented aviation insurance protection, air carrier tax benefits, improvements in air transportation safety and a generous Victim Compensation Fund. The whole Act, distilled to its essentials, is designed to do one thing — protect the airlines.

As of the publication of this article — October 15, 2001 — no federal statute has been enacted to protect any other component of the aviation industry or the people in the industry who are out of work. (A bill has been introduced in Congress, entitled “The General Aviation Small Business Relief Act of 2001,” sponsored by Rep. Bill Shuster (R-Penn.). This bill would allow the Small Business Administration to provide grants “equaling the losses incurred as a result of FAA or DOT orders,” to issue loans with no payments or interest for one year and “to allow the Secretary of Treasury to extend for two or four months the due date for certain excise taxes paid by qualifying companies.”)

The airline bailout “Act” of September 22, 2001, guarantees the following protection for the airlines:

  • Disaster relief loans up to $10 billion. (Interestingly, there has been only one taker so far, America West, which just about everyone agrees will be one of the first carriers to fail, if any do.);
  • Financial compensation to $5 billion for direct and incremental losses. (Money to stem the flow of green blood caused by terrorists, not financial losses due to poor management);
  • Special support to ensure scheduled air service to outlying communities. (the safest routes);
  • Reimbursements of premium increases by aviation insurers. (Who gets this money? Will the airline insurers promise not to include terrorist-caused loss exclusions in their policies at renewal?);
  • A commitment to spend $3 billion on airline safety and security. (Better too late than never.);
  • Special limitations on air carrier liability regardless of fault. (What if the factual accident reports of the September 11 terrorist crashes reveal clear airline negligence?);
  • An airline liability cap on all compensatory and punitive damage claims arising out of the crashes. No air carrier shall be liable in an amount greater than the liability insurance coverage maintained by the air carrier on September 11. (United and American reportedly each had $3.2 billion dollars coverage on September 11.);
  • A government insurance umbrella for air carriers, their vendors and subcontractors for third-party losses due to terrorism. The umbrella covers losses in excess of $100 million, during the 180-day period from the passage of the Act. (Perhaps this provision should be called the aviation insurance company stop-loss benefit?);
  • A new and exclusive federal cause of action controlling all lawsuits arising out of the terrorist-related crashes of September 11. (No creative lawsuits in state and federal courts.);
  • Original and exclusive jurisdiction for all September 11 lawsuits in the U.S. Federal District Court located in Manhattan, N.Y. (Defendants will all be in “one court,” before “one” set of judges, with jurors drawn from “one” district — the “one” encompassing the scene of the disaster. “One” question: How does the court find unbiased jurors?);
  • A Victim Compensation Fund run by the U.S. Justice Department with no spending limit, designed to generously and rapidly compensate victims if they do not sue the airlines.

The Fund is so unique and so controversial that it deserves in-depth analysis.

The September 11 Victim Compensation Fund

Congress created an unlimited Fund to provide monetary compensation for individuals who were physically injured because of the terrorist-related aircraft crashes of September 11, 2001. The key components of the victim compensation Fund are:

  • A no-fault insurance program by the government — a victim will not have to prove who was at fault in order to collect compensation from the Fund;
  • No ceiling or limit on the amount of money to be paid by the federal government to victims or the representative of survivors who file claims under the Fund;
  • One person, a “special master,” appointed by the Attorney General, will decide how much each claimant is paid. The special master will use hearing officers to help evaluate the claims;
  • The Attorney General’s special master is not subject to confirmation by the Senate;
  • Any decision by the special master is final and not subject to appeal in any court;
  • The special master will decide whether a claimant is “eligible,” the “extent of harm” and the “individual circumstances” for which a claimant will receive compensation and the amount of compensation;
  • The special master must make his decision within 120 days after the date the claim is filed;
  • The claimant will be paid 20 days after the decision of the special master;
  • The only eligible claimants are “individuals” who suffered physical harm or death because of the plane crashes of September 11, either on the ground or in the aircraft (terrorists and co-conspirators are excluded);
  • The Fund only covers individuals who have suffered “physical” harm as a result of the terrorist attacks on September 11;
  • To be eligible, an individual (injured or deceased) had to be “present at” the site of a September 11 crash, and be there at the time of the crash or in its “immediate aftermath”;
  • A claimant will have two years from the date on which regulations are promulgated under the Act to file a claim on the compensation Fund;
  • A survivor who files an early lawsuit will have 90 days from the issuance of regulations to withdraw the lawsuit and file a claim within the Fund;
  • Upon filing a claim under the Fund, claimants will immediately and permanently give up their right to file any lawsuit against any party responsible for their injuries on September 11;
  • Individuals who submit claims to the Fund have the right to be represented by an attorney but there is no provision for the payment of attorneys’ fees;
  • This Fund does not presently cover any other terrorist attacks on any other occasion;
  • Claimants will have some rights to present evidence including witnesses and documents, and other due process rights to be determined by the special master;
  • The special master will not pay for punitive damages from the Fund;
  • The special master “shall” “reduce the amount of compensation paid under the Fund by any collateral source compensation the claimant has received or is entitled to receive.

The Victim Compensation Fund Could Be Very Fair

Economic Losses…

The Fund provides for recovery of both “economic” losses and “non-economic” losses. The “economic” losses payable under the Fund rival those of the states whose laws provide the most generous compensation for pecuniary loss of individuals who are seriously injured or killed. Economic losses covered under the Fund include “any pecuniary loss resulting from harm (including the loss of earnings or other benefits related to employment, medical expense loss, replacement services loss, loss due to death, burial costs and loss of business or employment opportunities) to the extent recovery for such loss is allowed under applicable state law.” This definition of “economic loss” means that the special master must, in the case of decedents, pay for all of the lost earning potential of a person physically injured. The special master should compensate for wage increases, bonuses, fringe benefits, second-career opportunities, pensions, cost-of-living increases, etc., and any monetary benefits the deceased person would have provided to their survivors.

A few states, such as New York, allow only pecuniary damage recovery in wrongful death cases, refusing to compensate for non-economic losses. Some states allow non-economic damages but put monetary limits on such losses. Even in the majority of states that allow full recovery of non-economic losses, certain non-economic losses such as hedonic damages and those involving a loss of enjoyment of life are controversial and infrequently awarded. Congress said that, under the Act, “any kind” of non-economic losses will be paid.

…Non-economic Losses

“Non-economic” losses are defined in the Act to include losses for “physical and emotional pain, suffering, inconvenience, physical interment, mental anguish, disfigurement, loss of enjoyment of life, loss of companionship, loss of consortium, hedonic damages, injure to reputation and all other non pecuniary losses of any kind or nature.” All non-economic losses can be hard to measure. Yet Congress has chosen to allow recovery under the Fund for almost any non-economic losses — “all other non-pecuniary losses of any kind or nature.”

Compensation for claims payable from the Fund should be ample as long as the Department of Justice (DOJ) “measures” the losses liberally. The DOJ must also avoid arbitrary mathematical compensation formulas, and pay according to the “individual circumstances” of the victims. However, the DOJ has already implied in its Advanced Notice of Rulemaking that it is looking for ways to develop “schedules and statistical methodologies” thatfs could facilitate the mass production of claims within the mandated claim determination period.

Problems With The Victim Compensation Fund

At the time this article was being written, the DOJ was working on regulations to interpret and implement the Victim Compensation Fund Act. The DOJ plans to provide both substantive and procedural guidelines for how claims will be handled within the Fund. Hopefully, many of the problems discussed will be resolved by means of the implementing regulations. Congress has ordered that the regulations must be issued within 90 days of the passage of the Act, which means by December 21, 2001. The Justice Department has already issued an Advance Notice of Rulemaking (ANRM) for the September 11 Victim Compensation Fund. This DOJ notice already acknowledges problems with the Act and seeks public comment to help with resolving them. Here are a few of the problems and questions arising from the Act.

The 90-Day Implementation Deadline May Result in Arbitrary Procedures…

In 90 days, the Attorney General must rapidly create a body of rules and procedures to dispense an unrestricted amount of federal money to over 14,000 potentially eligible victims from different states and counties. The Act requires that the special master must rule on claims within 120 days after the enactment of the regulations. There will be very little time for legal review and amendment of the 90-day rules before the special master’s decisions are final. Despite the best efforts of people at the DOJ, the unrealistic deadlines may result in arbitrary procedures that may be unfair for some people.

On November 5, the Justice department gave the public merely 21 days (until November 21) to comment on its advanced notice but without revealing any of the draft rules. The DOJ has been deluged with comments.

…What Laws or Rules Will Control Eligibility and Other Key Issues?…

The Act provides that the laws at the place of the crash will apply to those lawsuits that are filed in the federal court in Manhattan. However, the Act does not specify what laws should be used by the special master to evaluate claims under the Fund. The definition of “economic loss ” in the Act allows pecuniary loss to be recovered to the extent that such recovery is allowed under “applicable state law.”

This is the only reference to state law in the legislation but it suggests that the special master should refer to state law. But, to which state law? The DOJ, in its ANRM, admits that there are many legal issues not covered by this unique legislation. Can the special master develop uniform rules independent of survivors’ rights under state laws? If so, how will the rules be fair to survivors whose rights vary depending on their home state?

…The DOJ as a Trustee for the Victims?…

Some believe that the DOJ is in something of a conflict of interest when functioning as a trustee for the Fund. Although the lawyers at “Justice” are some of the best lawyers in government service, the ones who are experienced in handling wrongful death civil cases are usually “defense” lawyers. The civil (versus criminal) lawyers of the DOJ are usually tasked with protecting the money of the taxpayer against claims by victims, when the United States is involved in civil litigation. (After many airline disasters, the lawyers of the DOJ’s Aviation Unit defend against victim claims.)

Will the hearing officers be DOJ lawyers? Will they be political appointees? When the DOJ issues rules, it should facilitate the liberal and remedial intent of the Act. It remains to be seen whether compassionate hearing officers will be appointed with substantial experience in evaluating wrongful death cases.

Will the DOJ require all hearings to take place in Washington, D.C.? Will the special master appoint hearing officers in different regions where a substantial number of survivors reside?

Claimants have two years to file their claims. Those who can afford to postpone claims are likely to take a “wait-and-see” approach to find out how the early claimants fare. Any perceived unfairness or stinginess will support the “opt-out” advocates.

…There are Serious Issues as to Who is Eligible Under the Fund…

The Act makes clear that only individuals who are “physically injured” may file a claim with the Fund. Thus, all the corporations, businesses and property owners who suffered devastating losses in the World Trade Center cannot file claims with the Fund.

Believe it or not, the definition “physically injured” is open to interpretation. Thus, those who were not harmed physically but were emotionally or mentally traumatized by the horrendous events on that morning may not be eligible claimants under the Fund. Some courts have ruled that the physical manifestations of post-traumatic stress syndrome may constitute a physical injury. The DOJ suggested in its ANRM, that because this is a no-fault system, perhaps only “seriously” injured people qualify as physically injured.

…The “Personal Representative” Requirement May Cause Trouble…

Individuals physically injured are the proper parties to file personal injury claims. Which of the survivors in death cases are entitled to file claims within the Fund? Each state has different laws as to who may file a claim for the death of loved one. Some countries allow a broad category of survivors to claim for the death of a loved one. The Act designates the “personal representative” as the only individual authorized to file a death claim, but it doesn’t define “personal representative” or specify whether a survivor’s home law should interpret that important assignment. Under various state wrongful death laws, heirs of the decedent may file claims directly. In some states heirs may file indirectly through a legal representative, not necessarily designated as a “personal representative.”

Who is qualified to act as a personal representative? Can one representative act without conflict on behalf of all heirs and survivors who are entitled to claim? The DOJ is currently seeking comment from the public on dealing with this problem, one that is not easily resolved. Each of the survivors of a person who died may have different or competing damage claims. What if a young professional who died was divorced and remarried? The decedent’s minor children from a prior marriage may have pecuniary loss claims for support in conflict with the new spouse’s claims for pecuniary support. What if some of the heirs want to opt out of the Fund and pursue litigation while other heirs want to file claims within the Fund?

…Major Controversy Exists Over the Collateral Source Reduction Requirement…

The Act requires that the special master shall reduce the amount of compensation paid under the Fund by the amount of collateral source compensation the claimant has received or is entitled to receive. This is a real eye-opener for trial lawyers. In most states a tort victim is entitled to collect compensatory damages through the legal system and can still keep any insurance, disability payments, workers compensation or other collateral benefits, etc. The tort victim can keep such collateral source compensation as long as it comes from a source independent of the wrongdoer. Lawyers know this principle as the “Collateral Source Rule.”

The idea behind the collateral source rule is that if an individual has had the foresight to make arrangements for life insurance, health insurance and disability insurance, or any benefit payable as a result of injury or death, the individual should not be deprived of the benefits because he may be able to obtain compensatory damages. Similarly, if victims have the good fortune to receive charitable donations or federal, state or county benefits, they should keep them to help with their suffering. In typical cases, why should a wrongdoer get to offset the victim’s independent benefits against its own monetary liability for causing the injury?

The collateral source rule has been attacked by the insurance industry as a windfall allowing victims a double recovery. Legal commentators suggest that there may not be a double recovery because victims usually do not recover full compensation for their injuries by settlement or even in the courts. Some believe that if there is to be a windfall to the plaintiff, it is preferable to giving the defendant a windfall by relieving him of any of his monetary liability.

The controversy over the collateral source rule has resulted in tort reform legislation in some states seeking to force injury and death victims to disgorge other collateral source benefits they receive if at the same time they receive a damage settlement or judgment in court. For example, the Ohio Legislature passed a law requiring the subtraction of collateral source benefits but that legislation was overturned by the state Supreme Court.

During development of the Act, partisan disagreements erupted when rushing to draft the victim compensation Fund provisions. Republicans wanted a collateral source compensation offset requirement in the Act and were able to prevail on this point. As a result, the Act defines collateral source as “all collateral sources including life insurance, pension Funds, death benefit programs, and payments by federal, state or local governments related to the terrorist-related aircraft crashes of September 11, 2001″ [emphasis added]. This is not good for those victims who had the foresight to pay premiums for life insurance and disability insurance or who have retirement funds or entitlement to workers compensation and other benefits that they expect to receive separate from any legal claims they have.

Lawyers representing victims who have significant collateral sources may consider advising their clients about the option to file lawsuits in the courts to avoid this reduction.

…Will Victims Be Denied Claim Recovery To The Extent They Receive Charitable Donations?…

Charitable organizations have raised hundreds of millions of dollars with promises to the donors that the money would be given to the victims of the September 11 disaster. Charitable donations for the victims of a disaster would normally fall within the definition of collateral source compensation under many states’ laws. Survivors would normally get to keep the donations and still pursue legal claims. Instead, tort reform-minded Members of Congress decided to further their agenda through the Fund. The Act says that the special master “shall” subtract collateral source benefits. Because the definition includes “all collateral sources,” the Attorney General and the special master are under a congressional mandate to subtract all collateral benefits. As one result, an enormous political and public relations nightmare is developing over the question of whether any donations given to the victims out of various charitable funds will be offset against the recovery from the Victim Compensation Fund. The DOJ has already issued press releases suggesting that, despite the collateral source requirement in the Act, they would prefer not to treat charitable donations as collateral sources under the Fund.

What if the Attorney General allows the victims who file claims with the Fund to keep only the charitable donations but not other collateral sources? It would seem unfair to subtract the collateral sources of those victims who had the foresight to buy life insurance, disability insurance, etc., or the right to receive worker’s compensation but allow others to keep donations. Perhaps the Attorney General should allow all collateral sources to be kept up to a certain amount? This would enable people to receive the money they need now and still file a claim to obtain full compensation from the Fund. Such a compassionate compromise would reduce the incentive to file a lawsuit and thereby fulfill the policy goal of the statute — to protect the airlines.

…The Right To Opt Out Of The Fund And File a Lawsuit…

The Act allows a potential claimant to opt out of the Fund and pursue litigation in federal court and it created an exclusive federal cause of action for the September 11 cases. Only one court is designated for all of the lawsuits resulting from the September 11 disaster — the U.S. District Court for the Southern District of New York. Victims will have to file their federal lawsuits in Manhattan and will have to comply with special federal procedures designated by the judges of the Southern District of New York.

Additionally, the Act makes clear that any lawsuit must be evaluated under the substantive laws of the place where the air crashes occurred on September 11, unless inconsistent with federal law. Thus, the September 11 lawsuits will be covered by New York, Pennsylvania or Virginia substantive law, including those states’ choice of law rules.

Many expect that survivors of New Yorkers killed in the World Trade Center disaster will choose to file claims with the Fund instead of lawsuits in the federal court in Manhattan. New York lawyers are saying that New York law in death cases is not as generous as the provisions of the Fund. According to New York lawyers, survivors of a New Yorker who has died may recover their economic losses but have no right to recover their non-economic losses.

…Will Lawyers Advise Clients to file lawsuits?…

Lawsuits take years. Congress has promised that, within 120 days from filing a claim, the special master will approve claims by eligible individuals for compensation under the Act and will pay the compensation to the survivors 20 days later.

The major airlines involved in the disaster of September 11 are reported to have “only” $3.2 billion of insurance each available to cover the losses resulting from the crashes on that day! (I never thought the word “only” could be used with those numbers.) Because the aircraft and ground victim losses are estimated to exceed $11 billion, the only place where a September 11 victim can be sure to get compensation is from the Fund!

Lawyers who advise the September 11 victims to forego filing a claim with the Fund and to pursue litigation in the court must carefully analyze all of the issues confronting such victims advantages to litigation. Some situations which will require particular scrutiny by lawyers include:

  • Survivors covered by state laws allowing recovery of the same losses as the Fund but without the procedural limitations that may be imposed by the DOJ;
  • Survivors who have most of their potential recovery swallowed by the Collateral Source Compensation reduction;
  • Survivors who may have a good chance at recovering all of their damages by settlement from an airline defendant’s insurance coverage;
  • Survivors who may not agree that a “personal representative” approved by the Fund will adequately present their claim;
  • Survivors who may be disqualified from eligibility under the Fund even though they were injured by the disasters.

Even if lawyers determine that clients may get more money through litigation, the rapid payment and certainty of payment offered by the Fund are compelling considerations. These factors must be weighed against the difficulty of getting settlement or judgments through the courts, the time delay, the sufficiency of insurance or assets to pay settlements, and the further uncertainty of collecting a judgment against the certain culpable defendants. Further, lawyers must investigate the facts to determine if they can prove liability.

Who Is Legally Liable For The September 11 Disaster?

Are the terrorists the only causes of these crashes? Do other entities have legal liability? The survivors who choose to file a lawsuit will have to prove the legal cause or causes of their injuries and probably, the percentage of fault of each liable party.

The Airlines…

The airlines would be the focus of any litigation. However, many lawyers suggest that it would be difficult to prove that the airlines should have foreseen and prevented the deaths on the ground. Arguably, the airlines could be legally liable for injuries to their own passengers; the likelihood of a terrorist attack on an airliner’s occupants is not unforeseeable. Pan American Airlines was held liable for its failure to use adequate screening and security measures to prevent terrorists from smuggling a bomb on board Pan Am Flight 103. As common carriers, the airlines have the highest duty of care for their passengers. They are legally responsible to ensure that the aircraft is airworthy in all respects before flight.

The carriers may be legally responsible if they have negligently allowed dangerous passengers to board the aircraft. The airlines also may be held liable if they are negligent with regard to their responsibilities for airport screening and baggage handling. Although the airlines often hire private companies to do the screening, they may still be legally liable for the negligence of those companies. Arguably, the airline passenger and baggage screening duty is nondelegable. The Act caps airline monetary liability exposure at the limit of their liability insurance, the $3.2 billion noted above. Lawyers will be forced to look for other deep pockets.

…Security Companies…

Who else might be legally liable such that survivors may sue for the deaths and injuries of September 11? Security companies may be subjected to intense legal scrutiny as to whether they failed to properly screen the terrorists.

We do not have all the evidence from the accident investigations into the cause(s) of the September 11 crashes. Preliminary indications suggest that the terrorists used box-cutters to commandeer the aircraft. Were bombs or other devices smuggled aboard the aircraft? FAA security regulations apparently allowed knives up to four inches in length to be carried aboard airliners on September 11. Accordingly, the question must be asked whether even security personnel failed to comply with FAA regulations. Questions also exist as to whether the terrorists created any suspicions at the airports that would have caused prudent security personnel, following norms in effect on September 11, to suspect the terrorists. Even if security individuals did the minimum expected of them by the FAA, the companies that screen for airlines should be held to a much higher industry standard (the highest duty of care).

But even if the security companies were held legally liable for the events of September 11, their insurance will probably be insufficient to pay all of the damages. Victims may consider lawsuits against the airports, depending on whether there are facts to suggest that the physical security of the airport was actually compromised by the terrorists.


Lawyers representing World Trade Center victims may suggest that the lessors or lessees of the property were negligent with regard to the evacuation plan for the building or the design and construction of the towers.

Product liability lawyers may suggest that the aircraft were not designed adequately to withstand hijacking! Is there any evidence yet that the terrorists broke through the cockpit door and defeated the minimal security systems in place on board the aircraft in order to achieve their objectives?

…Uncle Sam…

Is the United States government a legal cause of the September 11 disaster? The FAA has been criticized for many years for failing to establish higher minimum security standards for air carriers in passenger and cargo screening. Meanwhile, news reports suggest that the FAA has repeatedly been put on notice over the last few years that it was pitifully easy to take over an airliner. The crescendo of international terrorism against the United States increased recently but the safeguards did not.

Post-disaster news reports indicate that many of the terrorists were in the country illegally. Those who were here legally were not being properly monitored despite known ties to terrorists groups. The performance of many agencies including the U.S. Customs Service and the Immigration and Naturalization Service can be called into question.

The United States government can be sued for the negligence of its employees in causing death and injury in airline crashes. The Federal Tort Claims Act makes the United States liable as if it were a private person for the negligence of its employees. However, the United States government has special immunities and defenses to protect itself in cases like this. If litigants are able to prove that employees of the FAA, the Customs Service, the Immigration and Naturalization Service or any investigative agencies were negligent in carrying out their responsibilities, they could sue the United States. However, the United States could raise the “discretionary function exception” to the Federal Tort Claims Act as a defense. The discretionary function exception, as interpreted by the United States Supreme Court, protects discretionary decisions involving judgment from court review. Even if the discretionary decisions of government employees were highly negligent, the United States cannot be held liable.

…And The Terrorists

Certainly the most responsible parties may be the estates of the hijackers, Osama Bin Laden, Al-Qa’eda individuals, the Taliban Regime or other financial supporters of the terrorism. Even if a judgment is obtained against the terrorists or a terrorist regime, it probably will be uncollectible. Foreign countries that aided and sheltered the terrorists are theoretically liable under a recent amendment to the Foreign Sovereign Immunities Act. Victims may sue a foreign government that has sanctioned acts of aircraft sabotage; however, only countries that have been designated as sponsors of terrorism may be sued. Incredibly, Afghanistan has not yet been designated at this writing.

Even if assets of terrorists or a foreign government that sponsors terrorism are seized, questions remain as to whether lawsuit judgment creditors may be able to collect from those assets and how long they may have to wait to get at them.


Anyone who is a survivor or victim of the September 11 disaster considering a lawsuit should consult with an attorney experienced in wrongful death cases and complex litigation matters before making a decision. Even those bent on filing a claim with the Fund may benefit from the advice of an attorney experienced with losses suffered by the survivors.

The American Trial Lawyers Association (ATLA) has suggested a moratorium on civil lawsuits resulting from the September 11, disaster. ATLA is also sponsoring a program for attorneys to volunteer to help Fund claimants without a fee. The delay on lawsuits suggested by ATLA seems prudent at this time. Nonetheless, the Fund does not provide for any advance payments for those who have suffered in this disaster. Some may need charitable donations immediately. Economic necessity may justify filing a rapid claim with the Fund before regulations and the Attorney General promulgates procedures.

It may take longer to see how the problems discussed in this article are resolved. If survivors can wait, they should seek advice from trusted attorneys to decide whether the Fund is best for them or whether they should opt out and pursue litigation. I suspect that most lawyers will want to see how the Fund works before recommending a commitment by their clients.

NOTE: The issues discussed in this article do not constitute legal advice. My objective is to alert you to some common issues so that you can avoid or minimize legal trouble. Anyone with an aviation law problem should be guided by the advice of his or her lawyer, under applicable federal and state laws, after a full and confidential disclosure of all relevant facts.

— Phil

About the author…

Phil KolczynskiPhil Kolczynski is a practicing aviation lawyer who manages his own law firm in Irvine, California. His national practice concentrates on aviation, product liability and business litigation. Phil teaches evidence, product liability and aviation law at the University of Southern California Graduate School of Aviation Systems and Safety Management. He chaired the 1990 ABA National Institute on Aviation Litigation in Washington, D.C., and has spoken nationally at numerous aviation litigation symposia. Prior to moving to California in 1983, he was a trial attorney in the Aviation Unit, U.S. Department of Justice, Washington, D.C., and the Litigation Division, Office of the Chief Counsel, Federal Aviation Administration, Washington, D.C. Before entering law school, he was a Marine Corps Captain and F-4 Phantom Pilot. He is a Commercial Pilot with instrument and multiengine ratings. Be sure to check out Phil’s Web site.