Archive for the ‘Compensation’ Category

The 9/11 First Responders Bill is Fair Enough (but just barely)

December 23rd, 2010 No comments

Over at, I have a just-published piece that looks at the 9/11 first responders bill that was passed yesterday.

A regular readers of this site know, I have a strong interest in this issue of compensating victims of disaster: How do we do so in a way that’s fair not only to those compensated, but to others who suffer life’s indignities but don’t have a fund in their name? In this case, I think that the law is probably justified; but if it is, so is compensation for victims of Hurricane Katrina.

I’m only upset that the editor (who’s great) eliminated my favorite phrase: “Jon Stewart’s incinerating anger….” Oh, well. At least you get to read it.

Best of the holidays to all. I’m blogged out for now.

Article on BP Compensation Fund

July 22nd, 2010 No comments

Over on Slate, I have an article today on the BP compensation fund, administered by Ken Feinberg (he of 9/11 Compensation Fund and Executive Compensation overseer fame). I explore how the law that Feinberg says he’ll rely on actually isn’t good for most claimants, but that I expect him to compensate most of them anyway. I’m a fan of his, but I hope this isn’t a “puff piece.”

A shameless plea: If you read it and like it, please “like” it by sharing to Facebook. It matters how well the piece is received.

Five Questions About the BP Compensation Fund

June 17th, 2010 No comments

A timeline of the disastrous BP oil spill in the Gulf of Mexico

Under withering pressure from the White House and an enraged public, BP has agreed to establish a compensation fund for those affected by the oil spill. (We need a new name for this disaster. “Oil spill” doesn’t quite capture the magnitude of what happened.) For now, BP has committed to a cool $20 billion for the fund (to be paid into the fund in four yearly installments). That’s welcome news, as is the announcement that Ken Feinberg will be the Fund’s administrator. I’ve had a couple of brief conversations with Feinberg in connection with his administration of the September 11 Victim Compensation Fund. Although the Fund itself was open to criticism for using government money to pay up to $8 million for the best-compensated vicitms, Feinberg himself was fair and compassionate. He also oversaw executive compensation in the wake of the financial bailout, and somehow managed to do that well, too.

The Fund is just now being set up, but here are a few key questions I have:

1.  Will the money, once in the Fund, be shielded from creditors if BP goes into bankruptcy? That’s vital.

2.  Who will be eligible for recovery? The talk has been about compensating fishermen for economic losses, but what about, say, restaurant owners whose businesses are affected or even destroyed by the inability to get fresh fish? How about hotels that accommodate sun-seeking tourists? Under the prevailing tort law, they’d have a tough time recovering. What about under the Fund? How heavily will it lean on tort law?

3. Will recovery be limited to provable economic loss? What about those who suffer personal injury, possibly as a result of inhaling the vapors? Is the fund intended to compensate them, too?

4. What kind of evidence will count? How flexible will Feinberg be?

5. If a party loses, or doesn’t like the amount of compensation Feinberg awards, by what standard will the appellate panel (of three judges) review his decision? And if the case goes to court, do we start all over again.

Assuming the above questions can be worked out in a satisfactory way, I like this Fund. It takes worker compensation law as a rough model. Both allow quicker and more certain compensation than would be available under the slow, maddening, and unpredictable tort law. And both are funded by the very entities that are presumed to have caused the injury.

This already important story will become an increasing subject of focus as the months go by, and attention shifts from the on-going spill to the tragic and long-legged stories of clean-up and compensation.

9/11, Katrina, and the BP Oil Spill: The Inconsistency of Compensation

May 29th, 2010 2 comments

The by-now predictable, tedious, and irresponsible Republican bulwark against raising or eliminating the criminally low liability cap that would leave claimant against BP out in the cold really has me frosted. And it’s gotten me thinking about how we compensate people for loss in front-page cases: September 11; Katrina; and this BP oil “spill.”

Let’s talk about who was responsible for these tragedies, and how the victims have (or haven’t been) compensated for their losses.

September 11 was, of course, a terrorist act, but under established principles of tort law, other actors could be liable: airport security, airlines, and — further down the chain — the federal government, for missing the warning signs. But the government, to bail out the struggling airline industry, and in an effort to pile sandbags full of money at the border, created the Victim Compensation Fund. At taxpayer expense, the Fund (not really a “fund” at all) paid out more than seven billion dollars, mostly to surviving family members of those killed when the Towers fell. Some received millions, because payment was largely based on a tort model. I’ve criticized this approach, noting that government should not be compensating people as though they’re tort victims, and that doing so reflects a confusion between the principles of corrective justice (righting an imbalance between two parties caused by one party’s negligence) and distributive justice (deciding how best to allocate the resources across society).

To call what happened in New Orleans “Katrina” is really a misnomer, because the hurricane isn’t what caused the widespread and continuing destruction of large sections of the city: the government did so, through the negligence of the Army Corps of Engineers in connection with the building and maintenance of the levee system, and of untold bureaucrats in designing the Mississippi River-Gulf Outlet (“MR-GO”). The government is immune from suit for the levee failure (but not for MR-GO related negligence), so those injured, financially wrecked, or rendered homeless in the wake of Katrina had to content themselves with the meager assistance afforded by the Federal Emergency Management Agency. (Criticisms of FEMA’s response are legion and some, like this one from Kevin Drum in Mother Jones, are devastating; but they miss the more central issue.) I’ve criticized this approach in several places, including the documentary film “America Betrayed,” and this article.

Now comes the BP disaster, which threatens to swamp the rest. Yet because of an ill-considered federal law that I discussed here, BP will be liable for clean-up, but for only a relative pittance ($75 million) for liability to those economically or otherwise ruined. Unless this cap is lifted — and the legal change is made to apply retroactively — or unless there’s a government “fund” created, many of those destroyed by BP’s probable criminal acts will be entitled to…nothing.

How can our different responses to these tragedies be explained? Only by thinking about politics and power, not by looking at justice. But there might be a limit: Expect the law to change, and for BP to be held accountable. (Please!) If not, President Obama has suggested that the taxpayers will be on the hook. If we are (and I wouldn’t object), let’s spend more time thinking about a better model of compensation when we’re all left holding the bag.

And we must demand more comprehensive regulation: As Rachel Maddow pointed out this week (with her outrage well-justified by the facts), a similar spill went on for months about thirty years ago, and the same useless efforts were made then, as now, to stop it. She concludes, correctly, that Big Oil has gotten much better about drilling deeper and deeper (200 feet v. 5,000 feet), with correspondingly higher risks, but not any better at all about stopping it once it happens. Enough.

BP and the Undercompensation Follies

May 3rd, 2010 1 comment

A television reporter stands beside oil booms at the coast of South Pass, south of Venice, Louisiana, as oil leaking from the Deepwater Horizon wellhead continues to spread in the Gulf of Mexico, May 2, 2010. A huge wind-driven oil slick bore down on the U.S. Gulf coast on Sunday, threatening an environmental catastrophe, and the Obama administration heaped pressure on BP Plc to halt the uncontrolled spill from its ruptured Gulf of Mexico well. Since the explosion and sinking last week of the Deepwater Horizon rig, a disaster scenario has emerged with hundreds of thousands of gallons of crude oil spewing unchecked into the Gulf and moving inexorably northward to the coast.

I was appalled but not shocked to read today that legislation passed in 1990 (that created the “Oil Spill Liability Trust Fund”) limits the liability of BP in connection with this incident to $75 million. That’s right: a tiny fraction of the total amount of damages this disaster, which may prove to be unprecedented, will ultimately cause. In addition, BP is responsible to pay for the cost of containment and clean-up — good, but no help to those economically or physically injured.

That liability limit was part of a 1990 law that created a trust fund to cover more substantial liabilities, and that is funded by a very miniscule tax on each barrel of oil paid by the companies (who will then naturally pass it off to consumers). That tax will fund an additional $1 billion to be used as a compensation fund for each incident, no matter how enormous. And disasters don’t get any more enormous than this one.

Today, NJ Senator Bob Menendez introduced a much-needed bill that would raise the cap on oil companies from $75 million to, oh, $10 billion. Even this might not be enough, given that the sea fishing business is a $6 billion dollar industry per year in the Gulf alone. Menendez intends for his bill, called (I love this) the “Big Oil Bailout Prevention Act” to apply retroactively and thereby force BP to pay. This could be a political fight worth watching. Who’s going to stand up for oil in this case, and what will happen to their careers if they do?

In general, I favor deals limiting liability in exchange to paying into a compensation fund. But this particular fund doesn’t meet my minimum fairness requirements. First, the amount the companies have to pay in is so teensy, and therefore so easy to pass along to the consumer, that it doesn’t seem like much of a fair exchange — and in any case doesn’t force anyone to consider the true environmental costs of oil drilling. Second, if the government is going to get involved in a compensation fund, it has the responsibility to make sure that people are adequately compensated from that fund. The $1 billion dollar limit doesn’t do that.

It’s easy to blame BP for actions that likely could have resulted from any big oil company’s actions. But the company does deserve blame for moving so slowly, for underestimating the extent of the damage, and for trying to shift blame to the contractor that actually operated the rig.(The legal contribution and indemnity issues here are fascinating in a perverse kind of way.) Yet one wouldn’t expect them to win a safety award after this — wait, they might? (The company is a finalist for this award. Apparently, just like baseball’s MVP award, this prize is given so far ahead of time that it can be embarrassing: players can win them even if they fail miserably in the playoffs, and BP could win based on its actions before this gusher started.)

It’s time for someone to stop this and tilt the playing field back towards level. Right now, oil is sitting its heavy butt on one end of the see-saw, and the Gulf Coast, the environment, and the rest of us are flying off the other end.

U.S. Government: Compensate Katrina Victims

November 21st, 2009 1 comment

The recent news that a federal judge has ruled the U.S. Army Corps of Engineers, and by extension, the U.S. Government, liable for at least some of the preventable disasters associated with Hurricane Katrina should lead the government to do what it should have done long ago: Provide generous, long-tail assistance to help the residents of New Orleans get back on their feet.

To see why, just take a moment to compare what “we’ve” done for victims of another disaster: September 11. In that case, the Victim Compensation Fund was created to pay not even the survivors of that horrific event, but their families — in some cases, to the tune of millions of dollars. In all, the Fund spent just under seven billion dollars in taxpayer money for an event that the government was not responsible for.

With respect for the victims of that tragedy, I argued against such lavish compensation here and here. Part of the motivation was to avoid potentially crushing liability against  the airlines for their dismal security procedures,1 but that would have better been done through a direct bailout of those industries. Wait! We’d never bail out a failing company.

By contrast, the government awarded only the minimal payments available under federal disaster relief to Katrina’s victims, despite documented negligence (or worse) on the part of state, local, and federal government. And  the federal government, rather than defend the suits against them on the merits, has raised every possible procedural argument. First, they argued that they couldn’t be responsible for the flood-induced breaches of levees that the Corps had built or maintained, because of the Flood Control Act of 1928. That Act does clearly provide governmental immunity in connection with flood control projects, so the court held that the statute barred some of the claims.

Other claims, though, were based on acts of shocking negligence in connection with the maintenance of the White Elephant known as the Mississippi  River-Gulf Outlet (MR-GO), a navigation short-cut from New Orleans to the Gulf of Mexico. Here is a good summary of the allegations of negligence,  which were accepted by the court after a long trial:

The claimants alleged the government failed to properly design, construct, operate and maintain the MRGO, a 76-mile man-made ship navigation channel that connects the Gulf of Mexico to the Port of New Orleans Inner Harbor Navigation Canal. The claimants further alleged that the design of the MRGO (with the surface width being wider than the bottom width), along with the inevitable widening that would occur from waves in the channel, allowed the MRGO to act as a “funnel” for the Hurricane Katrina storm surge. Additionally, the salt water that was allowed to enter the MRGO from the Gulf allegedly killed off the storm-slowing plants and vegetation, further contributing to the “funnel” effect for the storm surge.

Since MR-GO isn’t a flood control project, the immunity probably doesn’t apply. But because of where MR-GO is situated relative to the damaged and destroyed neighborhoods, only residents in the Lower Ninth Ward and St. Bernard Parish were able to recover. Others are out of luck.

The government is considering an appeal. If one is filed, the brief would likely argue that the more general immunity under the Federal Tort Claims Act protects them. Interpreting and applying that immunity is challenging (for reasons that would numb any and all non-lawyers, and many lawyers as well), but my guess is that the judge’s opinion on that issue would stand.

The Government is likely afraid of the many millions of dollars it might have to pay out once others join the suit. But anyone who hasn’t already filed is barred by the statute of limitations. So the total payout that would be required isn’t clear; and in any event almost surely wouldn’t approach the amount paid out for 9/11.

Here’s a radical idea, government lawyers (Obama Administration): Settle the case! Offer structured payments. Set up enterprise zones and incentives for loans to start-up businesses. Build homes for people.  Rebuild the private medical and public health infrastructure. Such initiatives are long overdue. I have mixed feelings about tort liability against the government in any case, but surely some kind of considered, carefully designed compensation has by now become a national imperative. It won’t erase this national disgrace from our history — nothing can, or should — but it would be a compelling show of compassion.

  1. So now we have to divide our personal hygiene products into small bottles in order to board a plane.

America Betrayed

March 20th, 2009 1 comment

Hurricane Katrina was a bit player in the disaster that befell New Orleans; a Category 1 hurricane (there, although stronger elsewhere), it was able to swamp the city only because of an egregious, decades-long failure on the part of the Army Corps of Engineers to ensure that the levee system protecting New Orleans was sound.

This failure, which received considerably less attention than the horrific failure of government at all levels to respond to the disaster, is the subject of Leslie Carde’s searing documentary, “America Betrayed.”  The film, about to come out in limited release (so far, only to Portland, Oregon and New Orleans), features prominent scientists, award-winning journalists, and some of the many residents whose lives were tragically and needlessly upended by a combination of neglect and corruption.

I’m in it. Leslie Carde contacted me  because of this article I had written on the generous compensation that had been awarded the families of 9/11 victims.  The compensation, running to millions of dollars of taxpayer money in some cases, represented a dramatic and unprecedented departure from our usual response to disasters, which is to provide just enough government funding for people to struggle back to their feet. Leaning into a strong headwind, I argued that the 9/11 Victim Compensation Fund had to be justified by principles of distributional fairness on a society-wide level, and that it could not be so justified.

Based on this article, Carde thought that I might have something to say about the comparatively poor treatment that the victims of Katrina had received from the government. She was on the beam. I had just written another article expressly comparing these two cases. (You can find and download it here, under the title: “What Does Justice Owe the Victims of Katrina and September 11?”)  In polite academic terms that I can cast aside here, I strongly criticized what I saw as disparate treatment in the government’s financial response to the two disasters. While the horrors of 9/11 engendered the Victim Compensation Fund, New Orleans residents received meager FEMA relief, including those now-infamous, formaldehyde-riddled trailers. This appalling disparity was heightened by the fact that the government was in large part to blame in the case of Katrina, but not so much with regard to the events  of September 11.

So in my brief — yet career-making — appearance in “America Betrayed” I call into question this disparity, and invite us to wonder at the reason for it. This comes towards the end of the film, when Carde expands her lens beyond Katrina to talk about deeper problems of infrastructure, readiness, and — ta da! — justice. For most of the film, prepare to be awed (not in a good way) by the horrific failures of your federal government to protect its citizenry. Can we please devote some of the stimulus money to infrastructural improvements that might reduce the chances of another needless catastrophe?

Oh, wait: Louisiana Governor Bobby Jindal — more concerned about his own future star within the out-of-touch Republican Party than with (for example) the citizens of his state, has turned down some of the stimulus the money. In his career-destroying response to Obama’s speech to a Joint Session of Congress, he also criticized money in the stimulus package for monitoring volcanoes for possible eruptions — you know, eruptions that could spell disaster for those in the path of the lava.

Quick study, that Gov. Jindal.

You Ain’t Seen Nothin’ Yet

January 26th, 2009 1 comment

Probably too much was made of the Oof! of Office misadministered by Chief Justice John Roberts to finally-President Barack Obama last week. We might learn something from the Justice’s error, though.

The likely cause of the mistake was identified, and properly pilloried, by the Harvard psychologist and linguist Steven Pinker in an op-ed piece that ran in the NY Times: Roberts attempted to rewrite the oath to conform to his own pedantic — but incorrect — ideas of proper grammar. (As a sometimes-pedant myself, I have learned painful lessons about the importance of actually being right.)

Likely because of his extensive study of Latin during his Catholic school boyhood, Roberts likely subscribes to the “rule” against splitting infinitives; this is no rule at all, but a slavish import from Latin where infinitives can’t be split, because they consist of only one word. Thus did Roberts place the word “faithfully” at the end of a sentence that should have had the President “solemnly swear that I will faithfully execute the office of president of the United States.” Instead, the Chief Pedant wanted him to “solemnly swear that [he would] execute the office of president to the United States faithfully.”

This was a change up with which the almost-President would not put (to follow another silly “rule” about not ending a sentence with a preposition). Obama stopped, gave the Justice a chance to correct himself, and then they moved on.

Can’t I just move on, too? OK, in a minute. First, I want to suggest that the adherence to rules that don’t make a lot of sense can be dangerous when applied to the business of judging. Pinker reminded me that Roberts had also “amended” a Bob Dylan quote to remove an “ain’t”; as a kid, I remember chanting that “I ain’t gonna use ‘ain’t’, cause it ain’t in the dictionary.” Whatever meta-statement the previous sentence may or may not make, here’s a rule that I think we can all agree on: If you’re trying to show off your pop culture chops, editing Bob Dylan subverts your goal.

Lily Ledbetter, too, probably wishes that Roberts and his fellow conservative justices had less of an adherence to silly rules. In a 5-4 opinion onto which Roberts signed (now I can’t stop myself!), the Supreme Court ruled that Ms. Ledbetter’s sex discrimination lawsuit against Goodyear, based on unequal pay, was time-barred because she had failed to sue within the 180-days the law required. Ms. Ledbetter had worked for the company for some twenty years before realizing that her pay was substantially lower than that of every male in the same position, many of whom had far less seniority than she. Pay discrimination is often insidious and invisible, accruing over many years before the disparity becomes evident (and not disclosed by the employer, certainly).

No matter: Going against the majority of federal appellate courts and even the EEOC’s own view, the Court ignored this reality and found her claim time-barred. Thus, the factual finding that she was the victim of discrimination, meant nothing.

In dissent, Justice Ginsburg had this to say: “The Court asserts that treating pay discrimination as a discrete act, limited to each particular pay-setting decision, is necessary to “protec[t] employers from the burden of defending claims arising from employment decisions that are long past.” [B]ut the discrimination of which Ledbetter complained is not long past. As she alleged, and as the jury found, Goodyear continued to treat Ledbetter differently because of sex each pay period, with mounting harm.”

In fairness, the law in question could have been read either way. But only one reading was consistent with the remedial idea of the federal law. Because of the majority’s decision, Lily Ledbetter, who lost many thousands of dollars over the years, had no remedy.

Thus was Ms. Ledbetter cheered when the newly installed Democratic Congress passed a bill bearing her name, amending the statute to allow suits like hers. The bill passed the Senate last week, 61-36, with all four female Republican Senators (and the usually reliable Arlen Specter) joining a unanimous Democratic caucus. The House, which has passed a similar version of the bill, is expected to take it up tomorrow — on John Roberts’ fifty-fourth birthday. And the Lily Ledbetter Fair Pay Act of 2009 is expected to be the first bill that President Obama signs.

That’s two quick corrections to Justice Roberts’ actions. “You have not yet seen a thing,” to correct the woefully ungrammatical title of Bachman-Turner Overdrive’s 1974 hit (and for “uncool,” it’s hard to surpass that reference).

First Post

January 6th, 2009 No comments

Here’s the problem with starting a blog: Since most of us who consider doing so are blog readers ourselves, we’re acutely aware that the challenge is daunting. There are more blogs out there than you can shake a cyber-stick at, and reading too many in any sufficiently short period of time leaves the indelible impression that the blogosphere is graphically best represented as a series of (possibly rabid) dogs chasing each other in a dusty, never-ending vortex. (I couldn’t find such an image on the internet, although I admit that I gave up after a few minutes. Will this inexplicable coffee table do?)

doggie coffee  table

Possibly because of the intimidating nature of the challenge, I’ve been generating posts for about a month now but haven’t yet committed any of them to public scrutiny. Well, today’s my birthday so I just decided: Sheesh, just start it, already.

One reason for you to read it is that it will shortly become the most read, most interesting and insightful, and most painfully funny of all known blogs. OK, probably not, but that’s really my goal – and, one would hope, the goal of every blogger. And why not? If I’m going to do this, I need to keep in mind that there are many excellent writers out there. I want to be able to say something in a different, or (from my perspective) a better way.

You’re wondering: Around what topics and themes will this blog cohere? I’m a law professor, so some of the posts will analyze legal topics in ways that I hope are accessible, interesting, and more than occasionally amusing, to everyone. (Some legal blogs do this very well. In this vein, consider my colleague Bobby Lipkin’s excellent work. His love of the format has inspired me.) Within the legal arena, I’m very interested in issues of rights (especially gay rights) and social justice, and the connection between law and public health and policy. (See my linked publications list for examples of my articles on these topics.) A bit further afield, politics, literature, (certain) sports, and investigative journalism are other interests that will either inform or be the subject of some posts.

A few words about the blogger: In addition to being a law professor (at the Widener University School of Law in Wilmington, DE), I teach at the Yale School of Public Health (lecturing on public health law). I’ve published a couple of dozen law review articles and a smaller number of general interest (i.e., magazine and newspaper) pieces, appeared and presented at a number of conferences and symposia, have been on radio (discussing California’s Prop 8 in an NPR show on Dec. 2, 2008) and television, and am one of the featured speakers in a new film about Hurricane Katrina and broader issues of infrastructure and compensating and caring for injured or unhealthy victims of tragedy. (Now available to educational institutions and soon to be scheduled for theatrical release.)

As for my personal life: To the extent it becomes relevant in future posts (and it will, because I’ve already written some of them), I will make due disclosure. I hope you enjoy the blog, and I welcome all serious – not necessarily somber – and civil criticism.

Tomorrow: What is marriage equality for, anyway?