Lawyers Face New Caps on Fees in Camp Lejeune Toxic Water Cases

The US government is attempting to block lawyers from collecting what could be hundreds of millions of dollars in fees from the Camp Lejeune toxic water cases, months after critics in Congress had unsuccessfully tried to pass legislation to cap them.

Nine days after announcing an early resolution program to help expedite compensation for veterans and others sickened by the contamination, the departments of the Navy and Justice amended it to add the legal fee limits.

That new guidance, updated and posted on Friday, says plaintiffs’ attorneys can collect only 20% of the administrative settlements and 25% of the payouts resulting from litigation. Those guidelines—substantially below the 30% and 40% percent fees some veterans said their lawyers were charging—mirror the standards used in the Federal Tort Claims Act.

The Justice Department declined to discuss the change, but Sen. Dan Sullivan (R-Alaska), one of the leading critics of legal fees facing veterans, said it followed two conversations he had with Attorney General Merrick Garland this month.

Sullivan said Garland called him Friday and told him about plans to institute the fee limits.

“This means more money for sick Marines and less money for trial lawyers,” the senator said in an interview Tuesday with Bloomberg Law.

In follow-up calls with his staff, the senator said, Justice Department officials said the caps would apply to all Camp Lejeune payouts—not just for claims filed under the early resolution program.

How much lawyers deserve to be paid has been a sticking point since the government began considering how to compensate hundreds of thousands of veterans, their relatives and workers who blame their cancer, Parkinson’s disease or other illnesses on the toxic water at the North Carolina Marine Corps base between 1953 and 1987.

The government has projected it may ultimately pay out $21 billion, and lawyers had been poised to collect a third or more of the settlements in cases where the Navy has already acknowledged its failure to identify or clean up the tainted waters.

After a proposal to cap lawyer fees was removed from what last year became the Camp Lejeune Justice Act, Sullivan and other critics in Congress tried to resurrect it. Sullivan introduced a bill with a 17% limit while a bill from Rep. Jerry Nadler (D-N.Y.) would have limited fees to one-third of the payout. Neither got much traction.

Billions at Stake

More than 93,000 claims have been registered with the Navy so far and about 1,100 lawsuits are awaiting trial in the Eastern District of North Carolina. The lawsuits were filed by potential victims whose claims were rejected by the Navy or unresolved six months after they filed it.

The early resolution program offers contamination victims between $100,000 and $550,000 depending on their cases.

It was unclear how the Justice Department plans to enforce the fee caps and whether plaintiffs’ attorneys will object.

J. Edward Bell III, a South Carolina lawyer who spent nearly $3 million lobbying to pass the bill while keeping fee caps out of it, told Bloomberg Law this spring that lawyers should be allowed to collect up to 40% of the payouts in cases that go to trial.

Reached Tuesday, Bell said called the new cap proposal unusual.

“My position is that I don’t think the government ought to get involved in any kind of private business, whether it’s attorneys or doctors or anyone else,” said Bell, who this summer was appointed the lead lawyer on the cases awaiting trial in North Carolina.

He also said “the courts will eventually take care of” the issue of fees, but did not elaborate.

Bell said he had stopped advocating against fee caps and isn’t concerned about the possibility that plaintiffs’ lawyers fees could shrink by millions of dollars.

“We thought it would be best if we concentrated on the cases and not on the fees,” he said.

The Navy has yet to announce settlements in any cases, and none of the trials have been scheduled. All claims have to be filed with the Navy by August 2024.