In 2001, in the wake of the attacks on the World Trade Center, Congress enacted legislation to create the World Trade Center Victims’ Compensation Fund. In ensuing years, this fund approach was widely heralded as a fair, expeditious means for resolving mass tort claims. However, a number of scholars subsequently have raised serious challenges with regard to the legitimacy of the WTC Fund. With the recent creation of the Gulf Coast Claims Facility in the aftermath of the Deepwater Horizon explosion and BP Gulf Oil spill, the various criticisms of the WTC Fund have even more powerful resonance. If the WTC Fund represented a movement towards the embrace of fund-mechanisms for resolving mass tort claims, then the Gulf Coast Claims Facility not only has expanded on this model, but advanced the model in an even more radical, less lawful direction. In this view, it is difficult to discern any basis for legitimacy for the Gulf Coast Claims Facility. For those concerned with the rule of law, equity, and fundamental fairness, the Gulf Coast Claims Facility ought to be a cause for concern.
As this article suggests, the arc of special master and GCCF administrator Ken Feinberg’s career neatly demonstrates the evolution of at least three different fund models, progressing from arguably the most legitimate to the arguably the least legitimate (and most lawless). This evolution illustrates a seamless progression from (1) a judicially-approved and managed class action fund to (2) a Congressionally-mandated and supervised fund, to (3) a defendant-created and directed fund. In the haste to embrace the fund approach to mass claim resolution, little attention has focused on how these “funds” have evolved from entities governed by the rule of law to a model essentially unconstrained by law.
This paper compares several dimensions of the World Trade Center Victims’ Compensation Fund with the Gulf Coast Claims Facility. By focusing on various aspects of fund creation and implementation, the purpose is to draw attention to the ways in which the Gulf Coast Claims Facility is unlike the WTC Fund. After this lengthy exploration of these two funds, the article concludes with a discussion of the concept of a “fund approach” to the resolution of mass tort litigation, and raises concerns about this model. This final assessment considers the Gulf Coast Claims Facility in the context of other fund resolutions of mass claims, returning to the theme that the Gulf Coast Claims Facility represents a radical and troubling departure from other fund resolutions of mass claims, about which rule-of-law advocates ought to be concerned.
Linda S. Mullenix, Prometheus Unbound: The Gulf Coast Claims Facility as a Means for Resolving Mass Tort Claims - A Fund Too Far, 71 Louisiana Law Review 819 (2011).