The Camp Lejeune Justice Act - What Happens Next?

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Sam Fendler:  Hello, and welcome to this Federalist Society virtual event. My name is Sam Fendler, and I'm an Assistant Director of Practice Groups with The Federalist Society. Today, we're excited to host “The Camp Lejeune Justice Act - What Happens Next,” featuring Mark Behrens, Professor Paul Figley, and Ashley Keller.

Mark Behrens is a partner in Shook, Hardy & Bacon's Washington D.C. office. There, he serves as co-chair of the firm's Public Policy Practice Group. Mark has deep experience in litigation and appeals. He has authored or co-authored over 150 amicus briefs put before the Supreme Court. He has published more than 50 scholarly articles, and he is affiliated with a host of professional societies.

Professor Paul Figley is a Professor of Legal Rhetoric at the Washington College of Law, where he was named Law Professor of the Year in the 2012-13 academic year. Before entering the Academy, Professor Figley served for three decades as a litigator in the Department of Justice and led the DOJ's torts branch for fifteen years.

Ashley Keller is a founding partner at Keller Postman LLC, where he focuses on product liability, class action, arbitration, and other matters. Before opening Keller Postman, Ashley co-founded the litigation finance firm Gerchen Keller that would grow to over 1.3 billion in assets under management before its 2016 acquisition.

If you'd like to learn more about today's guest speakers, you can see their full bios on our website, fedsoc.org. After our speakers give their opening remarks, we will turn to you, the audience, for questions. If you have a question, please enter it into the Q&A function at the bottom of your Zoom window, and we'll do our best to answer as many as we can.

Finally, I'll note that, as always, all expressions of opinion today are those of our guest speakers and not The Federalist Society. We'll start with Mark. Sir, thank you very much for joining us, and the floor is yours.

Mark Behrens:  Thank you very much, Sam. Thank you to The Federalist Society and the opportunity to be here with Ashley and Paul. The Camp Lejeune Justice Act, I want to spend the first few minutes framing how the Act came about and what it does, and then we'll get into a discussion about aspects of the Act.

In 1982, the United States Marine Corps discovered that a number of the water wells at Camp Lejeune in North Carolina were contaminated with volatile organic compounds, toxic chemicals. The United States Department of Health and Human Services has estimated that as many as one million military and civilian staff and their families may have been exposed to this contaminated drinking water between the early 1950s and as late as the 1980s.

Up until the passage of the Camp Lejeune Justice Act, those families weren't able to recover in lawsuits against the federal government. In August of 2022, President Biden signed the Camp Lejeune Justice Act as part of a much bigger bill. There was a comprehensive bill known as the PACT Act, the Honoring our Promise to Address Comprehensive Toxics Act, and it deals with a lot of different issues, such as burn pits in the Middle East and things like that, but Section 804 of this very comprehensive bill is the language that we're going to talk about today to provide relief to people with harms due to drinking contaminated water at Camp Lejeune.

So, first of all, who can sue? Who has a claim under this new legislation? It applies to anybody who lived, worked, or otherwise was exposed to water at Camp Lejeune for at least 30 days between August 1, 1953, and December 31, 1987, or whose mother met these conditions during the time that she was pregnant, so somebody with an injury as a result of in-utero exposure can also be a claimant.

The bill changes the standard tort standard for causation. A plaintiff must merely show that the contaminated water was at least as likely as not the cause of the person's medical condition, not that it actually was the cause. So if there are two potential causes, one being exposure to the contaminated drinking water and an alternative cause and they're both as likely, the plaintiff wins. This is not the case under the Federal Tort Claims Act or traditional tort law, but it's a special causation standard that was part of this Act to facilitate recoveries for victims and their families that were exposed to the drinking water.

Harm is not defined in the legislation, so there's nothing specific in the legislation to identify the types of claims that could come forward. There are claims under VA disability benefits where there are presumptive criteria that set forth a number of conditions that people can file disability benefits and, presumptively, if they have one of these conditions, they are presumed to have gotten it from the water, but in the bill itself, it just says "recovery for harm," and then that would be an issue to be worked out.

Also, there is immunity limitations. Typically, the federal government, under the Federal Tort Claims Act—and Paul Figley is maybe the nation's leading expert in this field—will be able to tell you that there are a number of defenses that are typically available to the federal government, when the government is sued. Those are waived in this bill.

And also, what the bill says is that any state law, such as a statute of repose that exists in North Carolina that sets an outer time limit on tort claims, those don't apply either. So there's a very permissive causation standard and a waiver of traditional defenses that the government would have in a case like this.

If somebody meets these criteria and has a case, they can file, first, an administrative remedy with the Navy to try to pursue a recovery. Most of the claims will probably be resolved in this manner, but if a person is not satisfied with the Navy's determination or the claim is denied, then there is an opportunity to file a tort lawsuit against the federal government, and those cases are exclusively venued in the Eastern District of North Carolina, the federal district court where Camp Lejeune is based.

The bill also provides that there shall be a right to jury trial in those cases. This is another aspect of the bill that is highly favorable for plaintiffs because I can't imagine a forum that is more favorable to plaintiffs for these types of cases than the Eastern District in North Carolina.

Now, if somebody is successful in bringing an administrative claim or, ultimately, in a tort lawsuit, the bill does provide for setoffs, so the award will be reduced by any amount that the plaintiff has received and a disability award or payment or other benefit provided by the VA or through Medicare or Medicaid. And then, lastly, the bill provides that there are no punitive damages.

The fallout of this is that CBO, the economic scorecard for Congress, estimates that the claims will cost the government $6.1 billion over 10 years, but there's no limit on the payments. The payments could, in fact, be much greater than this. The Navy recently told members of Congress that it has already fielded 20,000 cases, and the minimum claim is for $10 million. So if you just took that, the total would be $200 billion, the number of cases they have already and the amount of the minimum claim.

Now, of course, that could be less because of the reductions for benefits some already received, but this is going to be an enormously costly litigation for the federal government. And one of the issues for that is -- One of the issues that relates to that, then, is what is the appropriate amount of compensation for plaintiffs' attorneys? And we'll get into that today. But the bill as finally passed, unlike the Federal Tort Claims Act, has no limit on attorneys' fees.

And there has been some talk. I've read quotes from the American Legion, for example, where they say their executive director told Bloomberg, "We certainly heard reports of firms charging an excess of 40 or 50 percent." And so, I think a legitimate discussion should be in a case like this where the government has made it much easier to file a lawsuit than you would have in a normal tort system, is it appropriate for attorneys to be charging those kinds of fees in cases rather than have the bulk of the money go to veterans and their families?

Sam Fendler:  Ashley, are you available to follow up there?

Ashley Keller:  I am. Thank you for that introduction, Sam. It's great to be on another Federalist Society panel, and it's good to meet my new friends Paul and Mark. I'll start with some prefatory housekeeping matters.

First, I have a vested interest in the answer to the question posed by this debate. In full disclosure, my firm, Keller Postman, represents many thousands of Marines. I didn't grow up wanting to be a billboard lawyer, but you may have seen commercials on Fox News and other outlets that my firm is advertising on. And so, here I am. It's a worthy cause. So that financial interest, I wanted to put right out there at the beginning.

I'll also say I'm a proud member of The Federalist Society and a proud conservative while also being a plaintiff's lawyer. Those things don't always go hand in hand, but that's another oddity, I guess, that you could say that's associated with my resume. And I will say as well that I think we economic conservatives and FedSoc types sometimes have a blind spot when it comes to the plaintiffs' bar where a lot of the principles that we normally espouse somehow don't apply there because maybe we think that plaintiffs' lawyers are icky or often are donating to the political team that we don't subscribe to, and I think a little bit of that is going on here with the debate that we're having.

The way it's framed is, should there be some sort of contingency fee rate reduction associated with plaintiffs' lawyers who represent Marines? What I would call that is good, old-fashioned price fixing. The government should come in at a federal level and set the prices that a private actor like myself charges to other private actors for the provision of goods and services.

And normally, we conservatives recoil when we hear price fixing, but somehow in this context, the editors of The Wall Street Journal and the other conservative economic groups think price fixing is a-okay. And let me offer just a couple of reasons as a sketch—and obviously, we can flush this out some more during the Q&A—why I don't think that that is appropriate here.

So one argument that has been bandied about is that our veterans are vulnerable. They wore the uniform of the United States, and so this is a particular group that shouldn't be taken advantage of by us ruthless, bloodsucking plaintiffs' lawyers, and frankly, I think that's just preposterous. I'm extremely grateful that these men and women wore the uniform of the United States, and so I'm not going to patronize them by treating them like children. They're more than capable of deciding for themselves who they want to represent them and the fee that they're willing to part with in exchange for that representation.

And so, the notion that this is some vulnerable group that somehow doesn't have its faculties about them and they can't make choices just like anybody else in a free market system is something we should reject, just as we should reject the proposition that gas stations shouldn't be allowed to charge veterans the market price for gas because they wore the uniform of the United States. I mean, give me a break.

We just heard from Mark that the causation standard in the Camp Lejeune Justice Act is different. That's true. He said it's a very permissive causation standard. I'm not sure that that's true. The difference between the normal causation standard of preponderance of the evidence where we plaintiffs have to show that it's more likely than not that the harmful agents led to the harm as opposed to at least as likely—so we've gone to a tie goes to the Marines rule—I don't think that changes the rules all that much. It puts us in a situation where, if we're in equipoise, the plaintiff wins, but I would say, so what?

There are lots of other situations in the law where plaintiffs get this sort of benefit. There are strict liability legal regimes at the state level all the time and nobody uses that change from the default preponderance of the evidence standard to say, "Well, now we have to engage in price fixing and interfere with these private contracts." So that argument doesn't carry a lot of water with me.

The next thing that I heard Mark say was that sovereign immunity has been waived here, and of course, I agree with that, too. If sovereign immunity hadn't been waived, we wouldn't be talking about price fixing at all because the price for my legal services would be zero. I wouldn't do it. If the government didn't waive sovereign immunity, there would be no tort, period. You can't sue the king for violation of the king's laws unless the king consents. That's an ancient principle, and Congress had to lift sovereign immunity for this tort to exist.

We can debate the policy wisdom of Congress having done that. I think that it was appropriate here. I can understand the arguments on the other side, but that's kind of orthogonal to the question of whether, once Congress has decided to lift sovereign immunity, it should also interfere with the private arrangements between lawyers and the clients that they're going to represent.

Another argument that I think Mark alluded to that's important is there is an administrative review process that's been set up as an exhaustion of administrative remedies before you can get to court. And I think that there's a good faith but false perception by a lot of those who favor fee caps that this is going to resolve the overwhelming majority of claims and the veterans are going to get fairly compensated, so we lawyers don't have to do very much other than fill out some forms. I want to disabuse folks of that notion.

There have been tens of thousands of administrative forms filled out and submitted to the government as part of this administrative review process. I can speak to that because we filled out a lot of them on behalf of our clients, and precisely zero clients have been paid. Precisely zero have been even made an offer to settle their claims.

I'm not casting any aspersions on the really hard-working, good faith professionals at the Department of Navy and the Department of Justice who have a deluge of things that they have to work through, but this is not going to be a simple process. And I think there's going to be—quite likely as part of my zealous representation of my clients—a fundamental disagreement about what these claims are worth.

So the idea that we're just connecting some dots on a couple of forms, fill them out for our clients, and then reap 40 percent contingency fee, and so we didn't really deserve the ultimate percentage of the award that we're going to get, that's based on a premise that, thus far, has not been borne out by reality.

Another argument that you heard more allude to—He's really good at setting up these arguments because he's a good polemic for his side—is we get to bring these cases in front of a jury in North Carolina. I'm missing the ‘therefore.’ Why does that justify price fixing? Almost every plaintiff's case is brought in front of a jury. The default is that we plaintiffs' lawyers get to argue our case to a jury of our clients' peers and we get to charge a 40 percent contingency or whatever the market and state ethical rules will normally bear for that.

So the idea that we get jury trial rights here because Congress has, once again, made a policy choice to say, "We're going to put these torts and these victims in the same position as any other tort victim" really doesn't say anything about whether the market price for attorney services ought to be upended by members of Congress.

And so, some final remarks that I think people need to be thinking about when we talk about price fixing or interfering with the attorney-client relationship and the fees that we're allowed to charge is, number one, you're betraying a fundamental distrust of free market principles.

If you really think that we're not going to work very hard on the plaintiff side and so we shouldn't be willing to take a lower fee, other plaintiffs' lawyers should advertise and say, "Hey, I'll take your case for only 25 percent. Come on over here and give me your business," and the client can make a choice. "Would I rather go with those folks at Keller Postman who are charging more but are saying they're going to deliver better value for me, or would I rather go with the discount lawyers?"

There's nothing wrong with people shopping around and for both the supply side and the demand side having different choices. That's what makes a market. But to set the caps at a congressional level and dictate this as a matter of federal law and policy is betraying fundamental free market economic principles that I think most of us conservatives normally subscribe to.

A second consideration that I think FedSoc types should be attuned to is federalism. In almost every other context, we would say that fee caps, if they're going to be imposed at all, should be done at the state level. That's something for state bar authorities and state ethics rules. Even when you're dealing with a federal cause of action, Congress doesn't set the fees that I can charge to represent a plaintiff in an antitrust case or a patent case, and so you have to come up with some special justification for why Congress ought to interfere here with those state law rules.

And then the final point I would make is there's a lot of water under the bridge. Like I said at the outset in my full disclosure to all of you, I've signed a lot of clients. I have existing contractual relationships that are valid under the law. To pass a new fee cap at this point after those contracts are signed, I think, interferes with my property rights, and if this were any other context, I think conservatives would cry bloody murder at that.

If Boeing had a defense contract with the United States that had been entered into to get a particular margin to deliver goods to the military, and then after the fact, Congress said, "We don't like this. As a matter of policy, you've got to charge a lower price," we would rightly defend Boeing and say that that's inappropriate.

And so, I think the folks that are advocating price fixing need to come up with a justification for taking away a contractual right that's already been entered into thousands of times over, and of course, not just with my firm, but with many others as well. So with those overview remarks, let me pass it to Professor Figley.

Prof. Paul Figley:  Thanks, Ashley, and thanks to Sam and The Federalist Society for having us and to Mark for leading it off. This is a different kind of situation than in the typical tort case. As Ashley points out, sovereign immunity is the standing rule, and absent a waiver, there is no recovery from the government.

When Congress set up the Federal Tort Claims Act and generally waived sovereign immunity for torts by government employees, it established an administrative claim system, and that's worked pretty well. As Ashley says, it's not a cure-all, but it's a chance to get the cards on the table administratively, and if the case can be settled on that level, on terms agreeable to both parties, the case will disappear. If that doesn't happen, then the plaintiff can bring suit in federal court.

When Congress set up the FTCA, it established a cap of 20 percent attorneys' fees for claims that are settled on the administrative level and 25 percent for claims that preceded the litigation, whether that went to judgment or the case settled after suit was brought.

On the veterans level, there's another standing administrative scheme for veterans compensation, and there, prior to a decision being made by someone in the VA, no attorneys' fees can be charged. After that, if there's some kind of an appeal brought either before the VA or the Board of Veterans Appeals, there is a presumption that a 20 percent or less fee is reasonable and a fee of greater than 33.3 percent is not reasonable.

So we have that as a backdrop to why there's even a discussion about attorneys' fees. Under this statute, Congress adopted the FTCA's approach of having an administrative claims level and then a right to bring suit if no settlement was resolved. I don't know why no claims have been settled yet. I'm sure that the people at the Navy and Justice are overwhelmed with a number of claims, and they may be planning to make some offers towards the end of the period, but if not, they're well aware that suits can be brought.

Whether there should be a cap, it's a difficult question, and as Ashley points out, part of it is just a matter of good capitalism. If people go out and seek the best deal, they can find it. If they don't, they may not. There are some reports of fees being charged at 60 percent, and that would take someone who hadn't shopped at all making a poor choice where a client would give up that much. That was in some news releases by a couple of senators. They didn't give specific examples.

But the government's concern in the FTCA—and I think with the VA—is that the money go to the injured party, not to the attorney, and the initial draft of this statute provided that sort of a scheme. It was dropped out, and it was in the midst of the last-minute flurry of putting together an omnibus bill. And I don't know why it wasn't there. It's not, and certainly, it is open to, right now, any contract that an attorney can get someone to sign.

There's been an argument presented that the FTCA limits should apply here, and the only place I've seen it is on websites of plaintiffs' attorneys. And I think they're doing their best to find a way to get more potential clients. I don't think that argument applies at all. The FTCA's fee caps applied to suits brought or settled under the FTCA procedures, and that's simply not the case here.

Absent legislation, attorneys can charge whatever they want—subject to bar review, I suppose—but I don't know that that's the best. I would vote for the FTCA numbers. I think that guarantees a significant return for attorneys. And it's the standard -- Twenty-five percent is the standard that applies to the toughest litigation that people bring against the United States.

And the United States is a special defendant in another way, too. In a difficult case, one of the big considerations is how much money does the defendant have? How big is the insurance policy? And when the United States is the defendant, you're going to recover all the money that the judgment says, and that is a factor, I think, that weighs in support of having some limit. And with that, I'll turn it back to you, Sam.

Sam Fendler:  Thank you very much, Professor Figley, and thank you also to Mark and Ashley for your opening remarks here and for framing the debate. I'll note at this point to the audience that we are going to turn to Q&A. So again, if you have a question, please enter it into the Q&A function at the bottom of your Zoom window, and we should have a good amount of time to get to a lot of questions here.

I want to start -- I think each of you, in the lens of your own expertise, has discussed the attorneys' fees and the market for attorneys' fees and this type of stuff, so I think I want to start by asking all of you -- And perhaps we can go in the same order. We'll start with Mark.

Ashley makes a compelling point that, for Congress to set a fee cap, it seems like price fixing, but then on the other end, one might argue that price fixing could be happening at the level of the law firms saying, "Well, we're all going to offer 40 percent, and that's what you got. Maybe you could shop around and get 35 if you're lucky."

And so, there could be questions about whether there's competition on that end of the equation as well. I'm wondering what you think about that discussion about the market that's involved here and if you could speak a little bit more on this competition for fees.

Mark Behrens:  Yeah. A couple of points that you raised are very important. One is, as Ashley mentioned, if the federal government hadn't passed the statute and waived immunity, there wouldn't be any litigation. So I think it's appropriate, if the government is giving people the right, to put some limitations to make sure that most of the money goes to the victims and not their lawyers.

I think it's a bad look here for the trial bar when you have the VFW's legislative director saying some firms see veterans as cash cows. You know, I just think that's a bad look for the trial bar. You know, you read about predatory law firms. It's a bad look. There is a precedent.

When the government says we're going to waive sovereign immunity and allow the lawsuit, as Paul said, the Federal Tort Claims Act, for years, has had some limit to provide an incentive for people to bring lawsuits because, if people are injured, there needs to be an incentive for lawyers to bring those cases because we want people that are sick to be compensated. We want them to have adequate, in fact, good representation. In history, the Federal Tort Claims Act is that the fee cap does, that the people are still able to sue the government and get good lawyers to do that.

Now, to go to your question about this price fixing, as conservatives, yes, we're generally about the free market, but here, I think the free market doesn't work. And Ashley mentioned the difference between these cases and when we go shopping for gas is, when I go down the street and I see an Exxon station or a Chevron station or BP or 7/11, they've got their price out front in big letters. I know what it is and I can be a sophisticated consumer. I know what gas should cost, and I can see the prices. I can make an educated decision about what is the best for me.

That doesn't fly here because the veterans are not sophisticated shoppers. Many of them have probably never worked with a lawyer. They don't know that there's a different causation standard. I'm sure the law firms are not sitting down with them saying, "Let me tell you about these cases." There's a weaker causation standard here than in the tort cases and all of the other things in this bill that depart from the tort system. I'm sure that discussion is not having with them. And if they call different lawyers, they're probably all being quoted the same fee.

There wouldn't be competition if every gas station you want to charge the exact same amount for gas, and that's what's happening, I believe, in these cases because that's what we see generally in the personal injury context. So you have people, they're not Boeing dealing with the federal government. They're not sophisticated in terms of being shoppers for legal services.

The advertisements that they see on TV—that are probably being run by lead generators financed by third-party funding litigation—are not telling them the full facts of what is in this law and how easy it will be for them to recover compared to other tort cases. They're often not told that there are setoffs for benefits that they may have received already. And so, they're not sophisticated in this, and the free market system is not working in this context. And for those reasons, I think a fee cap is an appropriate issue to be discussed.

Ashley Keller:  A couple of responses there. If all of us plaintiffs' lawyers were getting together and agreeing that we were only going to charge 40 percent, someone should bring an antitrust violation against us for that. That's classic cartel behavior, and I can assure you that my firm is not engaged in that, and I'm highly confident that other firms are not also. So that's a little bit of a non-sequitur.

I also don't think it's true that there's no price discrimination, I do think that there are law firms out there charging different fees, providing choice to these Marines. I also don't agree with the notion that our fees are not transparent. It's not like a gas station sign where you can see that in the commercial, but these are not buried in tiny, small prints like you would see on any one of the Fortune 100 companies' consumer contracts of adhesion that a lot of people sign. Our fees are stated in bold. Oftentimes, we have to make it very clear to clients based on state ethics rules.

So these are not hapless Marines who are being duped into signing a contract and not seeing the material terms, including the price that we're going to charge. But even if you don't agree with that, there's a huge over-inclusion problem in what Mark just said. Wanting the money associated with a tort to go to the victim, that's true in every tort. There's nothing unique about the Camp Lejeune Justice Act, vis-à-vis that or vis-à-vis Marines, and yet attorneys are allowed to charge a free market rate without Congress interfering in every other cause of action.

And it's also an over-inclusive non-answer to say, "Well, Congress waived sovereign immunity here. They created the cause of action, so we should engage in price fixing." Congress created the Sherman Antitrust Act. Congress created the Lanham Act. Congress created the patent rules. Congress creates lots of causes of action. The TCPA where plaintiffs' lawyers bring claims on behalf of their clients, a lot of them are easier-to-win cases. If you call somebody who's on the do-not-call list, there's a statutory liquidated damages amount, period. You owe that money as a defendant.

Plaintiffs' lawyers can still charge a free market rate associated with those causes of action because Congress doesn't engage in price fixing. So the fact that Congress had to affirmatively act here to give the Marines recourse is no answer for the fact that Congress doesn't otherwise intervene in the free market choices between clients and lawyers.

And so, I think Mark and Paul have to come up with some special justification for why we should do it here, and the closest thing I've heard is, "Well, we do this with the Federal Tort Claims Act." The fact that Congress has misguidedly fixed prices in one other example, I don't think is a good reason or defense for price fixing here. Let's make the affirmative case for price fixing and stand by that if we really think that that's a good idea, but saying, "Well, they did this some other time, so we should price fix again," that doesn't have any resonance with me.

Sam Fendler:  Professor?

Prof. Paul Figley:  Very rarely do I find myself in the middle, but I am. I spent an afternoon looking at plaintiffs' firms websites seeking Marine clients, and it's clear there's a lot of competition on price. And some of it gets a little catty. There are people throwing ethical bombs at other people and making legal assertions about what this statute requires that are simply wrong, but offering to use the 25 or 20 percent number that they say the statute quietly adopts, it doesn't. And I do see real competition for these clients, so that part, I have to go with Ashley.

On the other hand, this is a special kind of a case, because here, Congress has decided who's going to win and who's going to pay. Now, they haven't decided everybody wins. There are some limitations, but they have sure indicated that they expect the Department of Justice and the Department of Navy to recognize that Congress wants these cases settled and at a fair court damages price as opposed to an administrative compensation scheme.

And I think when Congress is putting billions of dollars into something, it can certainly put limits on what attorneys' fees might be, and I'm sure Ashley would agree with that. The question is what should Congress do? And that's a little harder. I understand Ashley's arguments about standard fees being used, but I think the standard here really should be what would a typical plaintiff in an FTCA case, who is suing only because the United States Congress decided to waive sovereign immunity for that particular kind of claim, and Congress further determined that 75 percent of that money should go to the client as opposed to the attorney. I think that's a sound approach and that's the one I would adopt.

Sam Fendler:  We were getting ready for this program and doing some research, and it came to our attention that there was a group of Republican senators who were trying to introduce a bill to put attorney fee caps in, getting ahead of this conversation.

Now, Ashley, I want to ask you this question. Senators Chuck Grassley and a few others, they were proposing a fee cap of 10 percent. Do you think if something like that were put into place, let's say, and it said between 2 and 10 percent, but let's say 10 percent at the high end, do you think that that would negatively impact veterans by way of having a less competitive market, or less attorneys maybe willing to represent them?

Ashley Keller:  Yeah, I'm positive that it would. You know, price fixing has sort of the standard economic effects that you would expect, and the provision of services as plaintiffs' lawyers to plaintiffs is no different than any other market. If you impose a 10 percent fee cap when the normal contingency fee rate in most situations for pure contingency matters is closer to a third, or 40 percent, you're going to get very different legal services provided to those veterans.

The plaintiffs' lawyers are going to treat it as just a box-checking exercise." All my job is is to fill out some form and maybe go back and forth by letter briefs with the Department of Navy or Department of Justice to try and fight for a little bit more." But the idea of going all the way through a jury verdict and preparing experts to testify and things of that nature, which are highly capital intensive, actual capital and human capital, I think you're going to get much less vigorous efforts.

So, again, I very much respect Senator Grassley and I think Senator Sullivan, who are leading that charge. And Senator Sullivan is a Marine himself. He wore the uniform of the United States and is very much entitled to our respect for that, but I think they're just viewing this through the wrong lens. They think that this is a pure administrative process where plaintiffs' lawyers aren't going to do very much. They can ensure that we won't do very much if they try and cap our fees, but if they want the sort of zealous advocacy that lawyers typically bring to client matters, they need to stay out of the market.

But I will agree with Paul. Normally, as a FedSoc guy, I have a problem with a lot of the things that Congress does from an Article I Section 8 perspective. I don't think they actually have the power to do what they're doing. There's no doubt here they have the power. It wouldn't be unconstitutional, other than maybe the takings issue that I referenced that no one has talked about yet.

I already have signed contracts that are legal with a lot of my clients that this would upend if you made it retroactive, but putting the takings issue to one side, Congress has the power to set fees if they want to anytime they create the cause of action. The question is, should they?  And just like in any other context, any other market, I would say no, they should not.

Sam Fendler:  So Mark, I want to ask you the same question. You're in favor, it seems, both procedurally and philosophically of these fee caps, but do you think 10 percent is appropriate, or is that too low? What do you think that would affect -- how that would affect the market?

Mark Behrens:  You know, I'm not involved in the legislative effort. I'm not lobbying for it. I do support the concept of a fee cap, so I can't negotiate should it be 10 or 12 or 17. I can tell you what the federal legislation that's been introduced—the current legislation—would do. And it's gone up a little bit because I think, as you mentioned, there had been, I think it was a 10 percent fee cap, and then there were questions raised, "Does that strike the right balance of encouraging really good lawyers like Ashley and his firm to participate in this area and provide relief to people that need it?"

And so, it seems to have come up. It's not quite as high as the Federal Tort Claims Act. It seems to be that legislation right now has settled in the middle of those two places. There's a bill in the House—it’s HR925, and in the Senate, it's Senate Bill 378—and it's the Protect Camp Lejeune Vets Act.

Now, the current legislation would limit attorneys' fees to 12 percent for an administrative settlement. That's if you file a claim and it settles before it has to go to court. If it goes to court, then there's a 17 percent cap, and that is inclusive of the additional expenses because, a lot of times what we see in tort cases is that the fee, whether it's 30 or 40 percent, that's just part of the cost to the victim.

They also have to generally pay for the lawyer's expenses, which can be very substantial in cases like this because to prevail in a case, Ashley's going to have to find an expert who will testify that -- Even with the weaker causation standard, you still have to have an expert that will say, "It's my belief that this person's multiple myeloma or leukemia or non-Hodgkin's lymphoma, whatever it may be, is at least as likely caused by contaminated water as something else."

And so, the other side is going to have to hire experts. That can be very expensive. If cases do go to trial, they would have to travel to the Eastern District of North Carolina, hotel expenses, travel. Litigation is very expensive. And today, the plaintiffs' firms can not only get their fee, but they can also recover all of their ancillary expenses that go with bringing the case forward. So the fees may be much larger. The total payout maybe 50 percent or more to plaintiffs' firms out of these recoveries.

The federal legislation, again, says it's either 12 percent capped fees and cost if the claim is solved in an administrative manner, and 17 percent of it goes all the way through to a tort lawsuit. And then there would be a requirement that the attorney would submit a certification that they followed the fee caps in the statute.

And I think, again, they seem to have struck -- Again, I'm not here to negotiate or say what the standard should be, but it seems where the senators have landed now in the House bill is somewhere between the 10 percent that was initially proposed in the Federal Tort Claims Act. And I think where they've landed is probably fair, in terms of, it does seem to me to be high enough to incentivize lots of lawyers to get involved in these cases, and yet still finds a way to preserve the bulk of the money for the people who are suffering the actual harm.

Ashley Keller:  Can we go out of order and I jump in real fast, Sam?

Sam Fendler:  Sure. We'll go to Ashley and then Professor right afterwards.

Ashley Keller:  Just real fast, I have to pick on my friend Mark here. If you're going to favor government intervention and price fixing as opposed to letting the free market work, I think it is incumbent on you to actually pick a number and not just say, "I'm not going to get into the exact amount that we should fix prices at," because if you let the free market work, you can trust, assuming you believe in free market principles, that we're going to reach an efficient equilibrium.

But if you're going to set the price yourself because you think there's a market failure, I don't think it's enough to just say, "Twelve percent sounds about right. That'll probably incentivize the plaintiffs lawyers enough," why not 13? Why not 20? You've got to come up with the rationale. Has Congress done any hearings? Have they investigated what it would do to the market if they set it at 12 instead of 13?

I would respectfully say the answer is no. We certainly haven't seen that in the public eye. So once you're going to fix prices, I think you have to be the regulator and justify it and not just say, "Well, I like it in concept, but I'm going to interfere with the free market without pinpointing exactly where I'm going to fix the price." I don't think that that's appropriate from a policy perspective if you're going to wade into the debate on the side of saying that free market principles have failed here, so we need an intervention. You need to say how you'd intervene, and that's the problem with price fixing. I don't trust government regulators to do that.

Mark Behrens:  I think it's fair. Yeah, it's fair. You know, on these issues, I tend to let the policymakers set the policy. So I think the policy is there should be a fee cap., but in terms of what the numbers should be, I agree there needs to be an exploration to make sure that the fee cap strikes that balance that they're looking to find.

Sam Fendler:  Professor?

Prof. Paul Figley:  HR925 and S378 are the Republican current versions. Representative Nadler came out with one a couple of weeks ago—It doesn't have a number yet, but it's on his website—and he proposes 20 percent administratively, which is the administrative limit under the FTCA, and if the case goes to litigation, 33 1/3, which is the standard for the top of what's reasonable under the VA system for handling appeals.

You know, it's good to say that there should be a dialogue and a rational way to decide, but there really isn't. I mean, the dialogue is fine, but ultimately, to put any number down is to pick a number. And under the FTCA and all the very difficult tort cases that people bring there, they're able to get really good attorneys at 25 percent, and I stand by that because it's an established number that has worked in the past. Twenty-six or twenty-four, would it make any difference? I don't know.

Mark Behrens:  I think they can find really good attorneys to do it for 17 percent, too.

Ashley Keller:  How do you guys know that? Paul, they can't get me for 25 percent.

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Prof. Paul Figley:  If I get hurt or my mother gets hurt, I'm calling you up.

Ashley Keller:  You should. I hope that never happens, obviously, but --

Prof. Paul Figley:  Do you ever take FTCA cases?

Ashley Keller:  No.

Prof. Paul Figley:  Well, that's a good -- I mean, that's a solid answer. Nonetheless, really good attorneys do take them and -- 

Mark Behrens:  And I think another issue here that plays a role in this is the role of third-party litigation funding because attorneys are going to be able and are more likely to take on speculative lawsuits if they know some of the risk is being offloaded onto a third party.

I think a lot of these cases, like any other mass torts of today, are being fueled largely by third-party funding in these cases. And we're seeing the model. It's the third-party funding and the lawsuit advertising that can really ramp up and generate thousands of cases in a very short period of time. This is just the latest example of that model being deployed.

Sam Fendler:  Ashley, you know a thing or two about that.

Ashley Keller:  I do, and I'm a little baffled by that answer. You know, how lawyers are capitalizing their advertisements to get Marines as clients doesn't say much to me about what fee they should be allowed to charge. And to the extent that what I heard Mark just say is that third-party litigation funding lets lawyers take more speculative cases, that runs directly counter to Mark's argument that a fee cap price fixing is justified here because these are practically guaranteed.

The causation standard is lower. The government is the payer. These are all going to pay up. So on the one hand, third-party litigation funding leads to more speculation, but on the other, these are ironclad claims that plaintiffs are definitely going to win. There's a disconnect there.

Mark Behrens:  Well, no, because there are going to be speculative claims in the pile because the bill doesn't say -- For example, for VA disability benefits, there are a list of eight presumptive conditions. If you have one of these eight presumptive conditions and you were exposed to the water over that 30-day period and you were not dishonorably discharged, you have a claim. So there are certainly going to be cases where—I assume in the civil context or the administrative remedy as well—if you have one of those eight conditions, there really is no contingency in the cases.

There could be some where there is some contingency, depending on if the illness is not one that's as likely caused by drinking water or something else. But I think what my point is, is that the third-party funding that is going into these ads is fueling a lot of this litigation. And the reason why the fee cap comes in is that these ads that are being run are misleading in many ways because I've seen ads where the VFW and the American Legion are saying, "When we talk to lawyers, they're not telling us that there are setoffs involved here." They're being baited into filing these claims based on less-than-complete information.

So I think that's a problem. And also, they're not being told what the level of contingency fee is in this case, and then, ultimately at the end, again, the fee cap goes to, "Do we want the money to go to the lawyers or do we want it to go to the victims?" And so, whether the cases are slam dunk or speculative, either way, the goal should be to have more money go to the victims than to the law firms.

Sam Fendler:  So let's talk about that. We have a question from our audience that is talking specifically about how this whole thing runs downhill and what it ends up in. And the question is could there be a scenario or what would happen in a scenario where a veteran receives expensive healthcare and their reward under the Camp Lejeune Justice Act ends up being too low to cover the subrogation requirement and high-dollar attorneys' fees? Could it turn out that the veteran actually winds up in a financially worse situation?

Prof. Paul Figley:  Well, let me take a shot at that. Under the Medical Care Recovery Act, the government has a right to recover money that was paid administratively under some scheme to a successful plaintiff who recovers under the FTCA. In my time at Justice, that was never asserted when it would have deprived the plaintiff of all the recovery. It would be waived. So it's theoretically possible, but I can't see it happening.

Ashley Keller:  Well, I'll also say everyone's going to have to give their own advice to their clients. And obviously, each client's situation is unique, but an important aspect of why I think the Marines do need representation is to help them navigate this. And let me assure you, I am never going to recommend that my client accept a settlement that involves the client paying money out of pocket because of the amount of liens that they already have from benefits received.

And so, I'm going to be fighting to ensure that their pain, suffering, and other damages are compensated at a level that is comparable to what you see in the tort system, and jury verdicts don't typically reflect just the cost of benefits that have already been provided. They reflect many other things that go into what happens when you're an injured party, like these Marines have been. So it is theoretically possible, as Paul just said, but particularly with representation, I think almost nobody is going to receive less than benefits already confirmed.

Mark Behrens:  Let me take this in a little bit of a different angle but staying on the disability benefits. The VA has disability benefits that apply to Camp Lejeune cases. These are separate, obviously, from the tort lawsuits. And what it says is, if you were exposed to the drinking water for this 30-day period and you have one of eight listed conditions, they're presumed to be caused by the drinking water, and you file an administrative claim.

My question—I'm very curious—is, again, if the free market's working, are plaintiff attorneys advising their clients that there are disability benefits out there available to veterans and you don't need a lawyer to go get those; the veteran can do those on his own or on her own? And I'm very curious about whether clients are being told about this additional remedy that's available that's easy, it's quick, and doesn't require a lawyer, or are clients not being advised about that? Because, obviously, if somebody takes advantage of that program and received benefits, there's going to be a setoff.

Because in the asbestos context, for example, in trust claims, we've seen that there is easier money for plaintiffs very quick to go through the trust system, but the lawyers are not filing those trust claims because they don't want them to be set off against a tort award. So we're seeing manipulation of trust claims in the asbestos context where, in those cases, veterans are not getting money quickly through the trust system because lawyers are trying to manipulate the system to prevent the setoffs.

And I'm curious to know—and it wouldn't be Ashley's firm, and I don't want to put him on the spot—whether this sort of thing is happening in these cases as well.

Ashley Keller:  No, you can put me on the spot. It's not my firm. I obviously can't tell you what advice Marines are getting from other lawyers who represent them when it's not my firm. I can tell you that, from my vantage point that I want veterans -- A lot of the Marines already have these benefits, by the way, because the VA helps them get them when they come in for their regular treatments if they have one of those listed conditions that are presumptive.

So they're already coming with benefits attached, oftentimes, when we first get them as clients, but we would never ever dissuade a Marine from getting benefits that they're already entitled to just because it's a setoff against the eventual reward that they're going to get under the Camp Lejeune Justice Act. The recoveries that we're going to get them are separate and apart from those benefits, and I hope that we're worth our salt here. We're going to get them many multiples of those benefits because they deserve it.

Sam Fendler:  Professor Figley, this may be a question for you. And I know that we're running a little bit low on time, but we have a question from the audience that's asking, what is the status of the exhaustion of administrative remedies cases filed in the Eastern District of North Carolina based on pre-Act admin claims, if you know, or for other panelists?

Prof. Paul Figley:  I don't know.

Sam Fendler:  Mark or Ashley?

Ashley Keller:  What's the question? On pre-admin claims?

Sam Fendler:  On pre-Act admin claims.

Ashley Keller:  Ah. So if you previously filed and you were rejected because there wasn't a waiver of sovereign immunity yet, the government's taking the position you've got to refile. So you've got to submit again now that the Act has passed. Your prior submission is not treated from the government's perspective as exhausting your remedies. You can't just go into court and say, "It's been six months since 1985 when I first submitted my claim and the Navy rejected it," because obviously, at that time, there was no waiver of sovereign immunity.

Sam Fendler:  That's helpful. I think this will be the last question before we go into final remarks, and it should be a short one. One of our attendees is asking if there's any difference in how much somebody may recover based on where they lived, which is to say, are there different housing zones on base versus right off base that have different percentages of recovery potential, or is it something like a zero-sum game; you qualified or you didn't qualify?

Prof. Paul Figley:  As I read the statute, you qualify, and then you're going to get whatever damages you can prove up.

Mark Behrens:  Yeah, I agree.

Ashley Keller:  Yeah. It's nuanced. You still have to show injury, right? So if the government could prove beyond doubt that the water you got at some little segment of the base wasn't contaminated because of whatever evidence they can muster, they could still win, but I don't think that those kind of nuances are ultimately going to play a role in the vast majority of cases.

Sam Fendler:  Understood. Well, why don't we, in our last couple of minutes here, go around the horn and do some final thoughts? And Mark, we can start with you.

Mark Behrens:  Well, I've enjoyed the discussion today. This is a very unique statute. You know, obviously, you have to feel bad for the veterans and their families that have been harmed through no fault of their own because of contaminated water trying to serve our country. You know, I think that it's good that Congress passed a statute to provide relief to them, but I think the fee cap issue is an appropriate discussion to have. And I thank you for doing that today because, ultimately, this statute was passed to help veterans and provide relief to them and their families, not to make trial lawyers extremely wealthy.

Sam Fendler:  Ashley?

Ashley Keller:  Thank you to FedSoc, Sam for hosting this. Thanks to Paul and Mark for sharing the screen with me. It's been a real pleasure to debate this topic, and I love a healthy debate. I guess I would say, in maybe contrarian fashion, there's nothing wrong with plaintiffs' lawyers getting wealthy. Yes, I'm self-interested, and so you would think I'd say that, but there's nothing wrong with wealth creation.

And my firm exists because we think we have a differentiated product and we provide superlative services to our clients, and I think our results bear out that we get them outstanding outcomes that are above what other firms produce. And, yeah, I do that in the context of a capitalist system for money, and I don't apologize that for a nanosecond. It's good for my clients that I do it for that reason. It sharpens our thinking and it makes our lawyers better. It lets us attract higher-caliber talent, and all of those things cost money.

And so, just like in any other industry, if you leave the free market to do its own thing, you typically get better outcomes, even if there are some pockets where you would say, "I wish this or that hadn't happened." The moment you start getting well-intentioned bureaucrats and politicians interfering with normal market behavior, bad things end up happening, and we conservatives complain about it all the time in other contexts.

I'd respectfully say that we haven't heard anything today that couldn't be applied to any other industry where we defend our free market bona fides. And so, essentially I would say, in the war between yourself where you're saying, "Do I side with the plaintiffs' lawyers or do I side with free market economics," go with your free market economic instincts. They're right in every other context, and they're right here as well.

Sam Fendler:  We appreciate your contribution. Ashley. Professor Figley, final word for you?

Prof. Paul Figley:  Congress is in the business of deciding things. We can all wonder at some of the things they decide. They decided to create a new scheme for handling these particular tort claims, and they left out the safeguards that they typically put in. Ashley makes this pretty persuasive argument that the 40 percent he charges is money well spent.

If you look on the internet, it's clear that there's competition, but it's also clear that some are charging 50 percent or 60 percent, and that's hard to justify. People who signed those contracts are being taken advantage of. It's government money that's funding this, and Congress has traditionally, in tort cases, put a cap on, and I think it should apply that cap here.

Sam Fendler:  Thank you very much. And on behalf of the Federalist Society, I want to thank all three of you—Mark, Ashley, and Professor Figley—for joining us. This was a great conversation. Each of you brings both a strong argument and a lot of expertise to the table, and so we thank you for sharing that with us and sharing that with our audience.

And to that latter point, I want to thank our audience for tuning in today. We greatly appreciate your participation. Please check out our website, fedsoc.org, or you can follow us on all major social media platforms @fedsoc to stay up to date with announcements and upcoming webinars. Thank you all once more for joining us, and we are adjourned.

 

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