Comparing bridge compensation vs. the 9/11 fund

Thursday’s passage of the Senate bill for victims of the I-35W bridge collapse came through a unanimous 63 to 0 vote — who could vote against it, really? But that doesn’t mean there wasn’t some agonizing in the chambers. Debate lasted nearly two hours, and mostly centered on this notion: Should the state set a cap on individual compensation? How can you put a price tag on a life lost or extraordinarily altered?
 
Sen. Ron Latz, DFL-St. Louis Park, set a prudent tone as the Senate bill’s chief sponsor. His proposal set an individual cap of $400,000 per victim, which differs from the state statute that limits state liability to $300,000 to individuals. His fund also tops out at $25 million, a far cry from the $1 million cap already on the law books that the state can pay out for a single event. So, in that regard, the Senate bill is a different beast indeed.
 
But the House approved a $40 million fund two weeks ago, with no such limit on individual claims.

“All of our hearts are in the same place,” Latz said. “I view this bill as a battle between our hearts and our minds. It was constructed as a balance between our hearts and our minds.”
 
Discussion about the collapse being a “man-made” disaster — without assigning blame, of course — made a distinction from compensation for, say, a tornado or flooding, the idea being that this event is sui generis. For that, the argument went, the old notions of caps should fall by the wayside. (Most of the debate, interestingly, was among DFLers.)
 
Sen. Scott Dibble, DFL-Minneapolis, offered an amendment that would push the fund up to $38 million, and eliminate a cap on any individual claims. Dibble opined that “I don’t think we’ll see any stratospheric settlements,” and said he believed $38 million would cover all uncapped claims. Eventually his amendment went down, 53 to 9.
 
Tragedy by the numbers
It was suddenly easy to sympathize with lawmakers on this one. On the one hand, $400,000 probably won’t even begin to cover medical bills and income loss for some victims and families. On the other hand, the state is in a $935 million budget shortfall, bad enough financial standing as it is. (Victims and survivors who buy into the compensation fund would waive the right to sue the state or the city of Minneapolis; and Latz noted that victims could pursue compensation through other entities.)
 
Gov. Tim Pawlenty originally had called for $40 million in compensation in his proposed budget, but Latz indicated he has worked closely with the governor’s office to craft the Senate proposal. Latz also said he had consulted lawyers who are representing the plaintiffs.
 
“I don’t know that anyone has reached that cap — yet,” he said. 
 
Still, it doesn’t sound like a lot of money. No one on the floor mentioned 9/11, but that thought was sure tossed out there in the days after the collapse. Luckily, more rational heads have prevailed since then — as horrific as it was, the bridge collapse doesn’t really compare in size and scope to what happened in New York.
 
But there is a parallel between the bridge fund proposals and the 9/11 fund, which was enormously controversial, but ultimately viewed in retrospect as a successful compensation plan.
 
First, some obvious differences. That plan had some rather large payouts and dealt with a huge number of victims — some $7 billion went to families of the 2,880 killed and the 2,680 who were injured in the attacks or in the rescue efforts that followed, according to a report released in November 2004. And that fund was federal. (More than one Minnesota lawmaker noted that there was no time to wait for federal money on this one.)
 
But, based on a Washington Post story about the 9/11 payments, maybe $400,000 is in line, on average, while likely not enough for some of the worst-case scenarios and families of the deceased.
 
“Families of the people killed collected awards averaging more than $2 million, and the injured drew payouts averaging almost $400,000,” the Post reported. “The awards for death claims ranged from $250,000 to $7.1 million, and for injury claims from $500 to $8.6 million. Many families also received charitable donations and insurance payments that were not included in the figures cited in [the] 114-page report.”

Comments (1)

  1. Submitted by Paul Schatz on 03/17/2008 - 02:05 pm.

    It’s interesting that the highest payouts for 9/11 went to the families of people who died. Although death is terrible and the grieving is sometimes nearly endless, the costs are usually lower. To put it crudely, dead people do not need long term medical care which can be extremely expensive.

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