Sheila Birnbaum '65 talks about overseeing 9/11 victim compensation fund at Annual Alumni Luncheon

At NYU Law’s Annual Alumni Luncheon on January 31 at the Pierre, an audience of roughly 400 gathered to thank the outgoing president of the NYU Law Alumni Association, Rocco Andriola ’82, LLM ’86; to welcome incoming president Carren Shulman ’91; and to hear an engaging keynote address by Sheila Birnbaum ’65, a partner at Quinn Emanuel Urquhart & Sullivan whose iconic stature in the practice of products liability and mass torts litigation has earned her the nickname “Queen of Torts.”

Attendees at the Annual Alumni Luncheon

In Birnbaum’s speech, provocatively titled “You Think It is Easy to Distribute $2.7 Billion,” she reflected on her experiences as the current special master of the September 11th Victim Compensation Fund. Like any New Yorker, Birnbaum was deeply affected by the terrorist attacks of 2001, and recalled watching out her window the smoke rising from the rubble.

In 9/11’s aftermath, Congress created the September 11th Victim Compensation Fund. During its original iteration, the fund was administered by special master Kenneth Feinberg ’70 until it closed in 2004. In 2011, the fund was reopened with an expanded scope.

Naturally enough, when offered the job of special master, Birnbaum sought advice from her fellow Law School alumnus. “I called Ken and I said, ‘Should I do this?’ He said, ‘Sheila, you’re crazy! My job was easy. Yours is going to be very hard.’”

Feinberg had a salient point. The original incarnation of the fund had the entire US Treasury behind it, and claims were limited to those killed or injured within the strict boundaries of the terrorist attacks. Ultimately, the fund successfully supplanted the vast majority of 9/11-related lawsuits and paid out more than $7 billion to the claimants. Subsequently, Birnbaum was charged with mediating the remaining cases not handled through the fund, and managed to settle virtually all of them.

The new version of the fund, on the other hand, presented considerable practical challenges. To begin with, the amount was strictly limited to $2.775 billion, which included the costs of administering the fund. Further, only $875 million could be distributed in the first five years of the fund, with the rest of the money becoming available in the sixth and final year. This left Birnbaum working to figure out how much to pay people when the final number of successful claimants would remain uncertain until the very end, and when giving a dollar to one person meant taking a dollar from another.

Sheila Birnbaum '65

The other set of quandaries involved the complexity of assessing a claim’s validity under the fund’s broadened scope. Many of the current claimants were volunteer responders whose activities around Ground Zero were not always documented; the passage of a decade did not help matters.

Birnbaum offered a succinctly wry summary of the delivery of her tough assignment: “There’s no offices, there’s no equipment, there’s no people. There’s you. Good luck.” She oversaw the setting up of a computer system, the creation of online claim forms, and the hiring of staff; the fund now has 75 employees working on behalf of some 56,000 registered potential claimants. About 12,000 have proceeded to file eligibility claims, she said, with about 4,500 found to be eligible so far. The goals, she continued, were to treat all claimants fairly and equally, to maintain a transparent process, and to inform the community as much as possible about that process.

While the administration of the fund may be a bureaucratic nightmare, Birnbaum also stressed that the whole enterprise was really about people’s lived nightmares. Internal appeals hearings for claims had begun the very week Birnbaum delivered her speech, and the first claimant they heard from was a burly police officer.

The man, who had gone to Ground Zero to search for a friend buried in the rubble, subverted Birnbaum’s expectations. “This big, tough guy starts crying uncontrollably as the memories of 9/11 came back to him,” she recalled. “He said to us that he had never told this story to anyone, not even his own wife.” His tears, Birnbaum explained, were for the fact that no detectives from the unit were there when the body was ultimately found.

“It was so heart-wrenching,” she said. “It was like this event had happened yesterday. And though for us it’s 13 years since 9/11, for people that were there, for people that were on the pile, for the first responders, for the construction workers, for the maintenance workers, for the people who lived in the neighborhood, for many of them it’s as real today as it was then.”

Posted on February 6, 2014