Zoeller: Victim Compensation is 'Model For The Future'

September 11, 2012

News Release

Indianapolis, Ind. -- At a 9/11 anniversary law school panel discussion that reviewed the Indiana State Fair stage collapse, Attorney General Greg Zoeller said the victim-compensation process that nationally renowned expert Kenneth Feinberg helped Indiana design is a model approach that could be used again in case of some future tragedy.

Zoeller today officially thanked Feinberg, an attorney and law professor, for his assistance to the Attorney General’s Office last fall in helping develop a claims process and formula for the first phase of compensation to State Fair victims. When seven people died and more than 50 were injured in the stage-rigging collapse August 13, 2011, the medical bills incurred exceeded the $5 million limits of the Indiana Tort Claim Fund. Facing difficult decisions about which victims could be paid within that cap, Zoeller soon after the disaster contacted Feinberg, the nation’s leading expert on victim compensation, and requested his assistance, which Feinberg readily offered.

“One year ago we were staring into the abyss with many unanswered questions on how to allocate limited state dollars under law to victims of a multiple-fatality, mass-casualty event. Ken Feinberg with his prior experience designing victim compensation plans after 9/11, the Virginia Tech shootings and the BP Gulf oil spill was the ideal expert who could help us navigate through these difficult financial and ethical decisions. We are enormously grateful for the wisdom, insight and moral authority Ken Feinberg brought to developing this process over several difficult months, and he donated his services at no cost to the state or taxpayers,” Zoeller said.

“We learned a great deal from establishing the successful compensation programs to pay the victims of 9/11 and other tragedies in our nation's recent history and it was a privilege to assist the Attorney General in designing a plan for Indiana State Fair victims. We hope it will be instructive to others in the future,” Feinberg said.

Feinberg returned to Indiana today to participate in panel discussion with Zoeller and others on the first phase of State Fair victim compensation. The event took place at Indiana University Robert H. McKinney School of Law in Indianapolis, and it also looked back on Feinberg’s earlier role administering the compensation plan for 9/11 victims. Today is the 11th anniversary of the September 11, 2001, terror attacks.

The Attorney General’s Office administers the Indiana Tort Claim Fund. Last fall, in frequent consultation with Feinberg, Zoeller’s office devised a process where victims of the State Fair stage collapse submitted claim forms for review. With $5 million in tort claim funds available, Zoeller’s office with Feinberg’s guidance developed a formula for compensating the victims. Estates of the deceased would receive at least $300,000, a victim who suffered paralysis would receive at least $500,000, and other injured victims would have up to 65 percent of their medical bills compensated. Out of 114 claims submitted last year, the State was able to offer settlement payments to 63 claimants, including the estates of seven deceased victims. All claimants but one accepted the State’s offers, and the full $5 million in the first phase was distributed to claimants by December 2011.

“Our priority was to speed the maximum state compensation available to victims as soon as possible without lengthy litigation, in an equitable way that treated victims with dignity. Ken Feinberg’s experience from past disasters helped us achieve that goal. While we hope we are never faced with another such tragedy on state property, the model he helped the Attorney General’s Office develop in the first phase of compensation could be utilized again here and in other states,” Zoeller said.

Separately, after the state’s full $5 million was distributed in the first phase, the Indiana General Assembly in March 2012 approved House Enrolled Act 1376 that allocated another $6 million in supplemental relief to State Fair victims. Using a different formula from the Feinberg plan in the first phase, the second phase of compensation in the legislation raised the payments to the seven estates to $700,000 each, the statutory maximum. It created an arbitration process for adjudicating claims from the injured for medical bills and lost wages. And it provided that claimants with non-permanent physical injuries would have 100 percent of their out-of-pocket medical expenses (after insurance) paid, up from the original 65 percent. The legislation shielded the victims from owing any state income taxes on the compensation, and it gave the Attorney General’s Office the authority and flexibility to attempt to resolve indemnification claims made by one private defendant in various State Fair-related lawsuits.

The process for calculating amounts victims will receive out of the $6 million second phase is under way. The three-member arbitration board is conducting hearings and considering documents and testimony provided by claimants and their attorneys. In passing HEA 1376, the Legislature required that the $6 million second phase be distributed to claimants no later than January 2013. Zoeller’s office intends to complete the arbitration process and issue checks this fall, ahead of schedule. The Attorney General’s Office also attempted to mediate a combination private settlement with two private defendants that could have brought additional private funds to victims. Although a strong majority of claimants agreed to the offer, one of the private defendants declined to proceed with the agreement without the few remaining claimants on board; so that proposal is null and the supplemental relief will involve the $6 million in state money only.

Including the $5 million first phase where Feinberg assisted and the separate, $6 million second phase that the Legislature approved, State Fair victims will receive a total $11 million from the State of Indiana -- not counting private donations collected by the State Fair Commission.

Feinberg was the featured speaker and Zoeller was a panelist today at a Continuing Legal Education (CLE) forum at the law school that focused on the legal intricacies of victim compensation. In thanks for Feinberg’s advice and assistance on the first phase to assist State Fair victims, Zoeller today presented the Massachusetts native with an “Honorary Hoosier” award in recognition of his public service to Indiana at no cost to the state.

Source: Office of Attorney General Greg Zoeller