Court Dismisses Class Action Challenging 9/11 Victim Compensation Fund Eligibility Criteria

The litigation centered on whether the Fund’s methodology for calculating the "relative risk" of disease causation—specifically its use of a 20 percent threshold for environmental exposure and its treatment of non-9/11 related health factors—violated the reauthorization of the September 11th Victim Compensation Fund.

Bayer and Johnson & Johnson, acting as parties with financial interests in the Fund’s solvency, challenged the Fund’s Administrator, Kenneth Feinberg, arguing that the eligibility standards were arbitrary and capricious. They contended that the Fund’s approach to weighing competing causes of disease unfairly excluded valid claims.

The district court had granted summary judgment in favor of the Fund, holding that the Administrator’s interpretation of the reauthorization statute was reasonable and entitled to deference. The court found that the Fund’s methodology for determining causation fell within the Administrator’s statutory discretion.

The Second Circuit agreed, holding that the Fund’s use of a 20 percent relative risk threshold was a permissible construction of the reauthorization act. The court rejected the argument that the threshold was arbitrary, noting that the statute did not mandate a specific scientific standard for causation.

The appellate court also upheld the Fund’s practice of discounting the relative risk of disease caused by non-9/11 factors. The court determined that the Administrator could reasonably conclude that the reauthorization required a focus on 9/11-related exposures, even if other factors contributed to the plaintiff’s illness.

Bayer and Johnson & Johnson argued that the Fund’s methodology created an irrebuttable presumption that non-9/11 factors precluded recovery, effectively barring claims from individuals with complex medical histories. The court rejected this reading, finding that the Fund’s approach allowed for case-by-case assessments.

The decision reinforces the broad discretion granted to the 9/11 Victim Compensation Fund Administrator in interpreting the reauthorization statute. It signals that courts will likely defer to the Administrator’s methodological choices regarding causation and eligibility, provided they are not arbitrary or contrary to law.