## Facts

- Congress created the September 11th Victim Compensation Fund (VCF) as an alternative to civil litigation, authorizing compensation for economic and noneconomic losses based on harm, claim facts, and individual circumstances.
- The Attorney General appointed Kenneth R. Feinberg as Special Master to administer the VCF and issue implementing regulations.
- The regulations used presumptive award tables keyed to income and family status, with deductions for collateral sources and “personal consumption.”
- The presumptive income tables extended only to the 98th income percentile; claimants seeking higher awards were required to show “extraordinary circumstances.”
- Plaintiffs were representatives of deceased high-income September 11 victims who alleged the Special Master effectively refused to compensate high earners for their full projected lost earnings.
- Plaintiffs pointed to statements attributed to the Special Master (suggesting awards would rarely exceed roughly $4–6 million) and argued the scheme functioned as a de facto cap despite no express statutory cap.
- Plaintiffs sued under the Administrative Procedure Act (APA), challenging both the legality of the regulations and the Special Master’s implementation.
- The district court granted summary judgment for defendants; plaintiffs appealed.

## Issues

1. Whether plaintiffs showed that the VCF regulations or their implementation imposed an unlawful de facto cap on high-income awards contrary to the statutory direction to account for economic loss and individual circumstances.
2. Whether the regulations—especially limiting presumptive tables to the 98th percentile and requiring “extraordinary circumstances” for very large awards—were arbitrary, capricious, or contrary to law under the APA, or instead a permissible interpretation entitled to Chevron deference.

## Decision

- The Second Circuit affirmed summary judgment for defendants in a per curiam decision.
- The court held plaintiffs failed to provide reliable evidence that a fixed de facto cap governed awards.
- The court upheld the regulatory framework as a reasonable construction of the statute and entitled to deference under Chevron.
- The court accepted the rationale that very high-income projections were too speculative for standardized presumptive tables, justifying a percentile cutoff with case-by-case review above it.
- The court rejected the claim that considering factors such as personal consumption and financial need was forbidden by the statute’s reference to “individual circumstances.”

## Legal Principles

- When a statute grants broad discretion and does not clearly prescribe a compensation formula, a reasonable implementing interpretation will be sustained under Chevron.
- The absence of an express statutory cap, combined with an individualized “extraordinary circumstances” pathway, undermines claims that a presumptive-table structure necessarily creates an unlawful cap.
- Allegations of an unlawful de facto policy require concrete evidentiary support (such as final determinations demonstrating a fixed ceiling), not merely generalized statements or speculative inferences.
- “Individual circumstances” in a congressionally created administrative compensation program may permissibly include deductions and evaluative factors that differ from full tort-style replacement of projected earnings.

## Conclusion

The Second Circuit upheld the VCF’s presumptive-award framework and extraordinary-circumstances mechanism as a permissible exercise of delegated discretion and found the record insufficient to establish that the Special Master imposed an unlawful de facto cap on high-income claims.


Schneider v. Feinberg, 345 F.3d 135 (2d Cir. 2003)