Phishing Scams, Bad Actors Bedevil Military Mass Tort Settlements

“THIS IS A SCAM,” federal district court Judge M. Casey Rodgers declared in an unusual order she entered Oct. 14 in a mass tort products liability case.

In that same order, Casey noted that “bad actors” were communicating with potential claimants through unsolicited telephone calls and email messages that asked them to verify their personal information. These claimants could share in a massive settlement fund established to award victims monetary damages if they were allegedly injured by the defendant’s conduct.

But that order wasn’t entered in the Camp Lejeune water contamination litigation. Rather, it was entered in the massive 3M earplug litigation pending in federal court in Pensacola, Fla., where it was alleged that defective earplugs manufactured by 3M caused hearing loss and tinnitus—ringing in the ears—in combat veterans.

After four years of litigation and multiple test trials, 3M agreed to settle the case in late August for $6 billion. Approximately 260,000 combat veterans may be eligible for payments out of that settlement fund.

But the playbook used by scammers in the 3M case seems to have been borrowed by similar bad actors in the Camp Lejeune litigation now pending in federal court in North Carolina.

The litigation is well-publicized, as attorney advertisements soliciting potential clients proliferate the airways. To those who shun TV and haven’t heard about the case, jet fuel and other contaminants leaked from underground storage tanks for decades at Marine Corps Base Camp Lejeune, N.C.

Between 1953 and 1987, a million or more Marines, civilian staff, and their families drank and bathed in water contaminated with these toxic chemicals, many of which contained high level carcinogens. But under North Carolina law, the statute of limitations had expired on personal injury claims, including for victims of exposure who had yet to manifest any physical symptoms or injuries.

Last year, President Joe Biden signed into law the Honoring Our Promise to Address Comprehensive Toxics Act. One section of PACT was the Camp Lejeune Justice Act of 2022, which authorized lawsuits that would have been barred under North Carolina law—launching a wave of more than a thousand lawsuits.

To manage this proliferation of litigation, the Department of Navy, which operated the base, implemented an administrative settlement procedure in early September—called the “elective option”—under which claimants could file compensation claims on a voluntary basis without a lawyer.

The Navy would review those claims, supporting medical records, and other documentation and offer settlements to claimants who met the stringent criteria set for compensation.

The payouts would be tiered based on the types of disease suffered by claimants and their length of time at the base, including an extra payment for a death claim. The Navy so far has received more than 93,000 administrative claims.

A primary goal of this procedure is to speed up the process for reviewing and paying claims to deserving claimants that would otherwise be delayed for years in a protracted lawsuit. But filing an administrative claim doesn’t prevent a claimant from also filing a civil suit.

This is where the bad actors and scammers have surfaced. As in the 3M case, claimants receive a phone call or email informing them they can receive payments of a few thousand or up to $1 million if they click on a link or call a certain number.

But if they do, they could expose their computer or mobile device to malware and may become victims of identity theft. Another scheme involves steering claimants to a website with a form that asks for sensitive personal information, again exposing the person who completes the form to the theft of highly private and personal information. Still another scheme involves asking for “filing fees” to secure the settlement payments.

Other types of fraudsters are claimants who never lived near Camp Lejeune (or used 3M earplugs) but who nevertheless seek compensation from these funds. The settlement administration and claims approval processes—overseen by the courts handling the case and staffed by professionals who are experts in these tasks—are robust and demanding, and can usually weed out these bogus claims.

A more frequent complaint that surfaced in the NFL concussion litigation, and will inevitably arise in both the 3M and Camp Lejeune cases, is that the screening process is too strict and can freeze out even legitimate claims.

One can’t complete a discussion of the Camp Lejeune case without mentioning the plaintiff lawyers who are handling the filed lawsuits. There is no “$21 billion” settlement fund in the case, as appears on some of their websites. The amount paid by the US government through litigation and settlements may very well reach that amount, but no such fund exists now.

The media advertising by these law firms and their marketing agencies—they had spent over $40 million by March of this year—paints a rosy and potentially misleading picture of the difficulties and complexities of this litigation, and may create false hopes for a large payout.

Let’s hope that full disclosure of the risks of this case and outcome scenarios are made during the client intake process.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Kenneth A. Jacobsen is a practice professor at Temple University Beasley School of Law, and his previous private practice concentrated on complex civil litigation, including class actions and mass torts.

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