Lawyer Fees Sticking Point as VA Data Breach Bill Passes Committee
The first thing we must do is kill all the lawyers -- or just limit their profits on verdicts obtained for veterans whose personal data were abused in the Dept. of Veterans Affairs (VA) breach, House Judiciary Committee Republicans said in a markup Wed. Democrats shot back that HR-5220’s 10% limit on fees would keep lawyers from representing vets, owing to low returns on cases with payouts that could be less than $1,000 per victim. A slew of amendments failed, but none so dramatically as Rep. Weiner’s (D-N.Y.), which blamed the Bush administration for the incident, sparking a vitriolic exchange between him and Rep. Lungren (R-Cal.).
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Under the Veterans Identity Protection Act, a new office in the executive branch would receive, process and pay claims involving veterans “injured” through the “unauthorized use, disclosure, or dissemination of identifying information” in the May 3 breach. The initial bill gave vets 2 years from the promulgation of rules under the law to file claims. That stretched to 2 years from a veteran’s realization that his data were breached under an approved amendment by Rep. Scott (D-Va.). The only other amendment to pass, also by Scott, would give DoJ more money to deal with breach inquiries.
Democrats blasted what they attacked as a lack of “comprehensive” protection for vets. Ranking Member Conyers (D-Mich.) introduced a substitute amendment to provide: (1) Free credit monitoring upon request for a year. (2) Free credit reports for 2 years beyond those offered under current law. (3) A year of free fraud alerts. (4) Free security freezes for a year. (5) “Substantive notification” for affected veterans. “I urged that we put some meat on the bones” of a “hurried bill that creates the false hope of a remedy,” Conyers said.
With its 10% cap on lawyer fees, HR-5520 ineffectively attempts to complement the Federal Tort Claims Act (FTCA), Conyers said. Under FTCA, lawyers can recover up to 25% of damages in fees. With VA breach awards likely to be $1,000- $2,000, no lawyer will take the case, he said: “We're asking the veteran to have the choice between” the bill and current law. He proposed raising the fee ceiling to 25%.
Rep. Smith (R-Tex.) challenged the amendment’s germaneness, saying its provisions fall under Financial Services Committee jurisdiction. Conyers responded the “mere mention of issues related to banking and credit should not be cause alone” to toss his amendment, noting Judiciary also took up bankruptcy legislation. Chmn. Sensenbrenner (R-Wis.) sided with Smith, noting the bankruptcy bill was referred to both committees.
HR-5520’s point is to simplify the process of claims filing, so lawyers can’t justify larger fees, said Rep. Chabot (R-O.). He said the bill is modeled on a 1999 claims law in which filings were made locally through the Federal Emergency Management Agency. Rep. Nadler (D-N.Y.) said the bill’s process differs from and is more centralized than the 1999 law, and would require significant legal help. “It’s not a no-fault situation,” Scott said: The 10% limit is “less than a lawyer’s going to charge for a traffic case.” Rep. Watt (D-N.C.) said if the process is as simple as claimed under the bill, lawyer fees are irrelevant. The amendment failed 9-13.
Weiner offered an amendment in scathing language blaming the President for the breach: “We got here because of the abject incompetence of the Bush administration” and no one can deny that, he said in a sustained raised voice. Anger in his voice, Lungren called Weiner’s comments “the kind of nonsense that demeans this House.” Sensenbrenner sighed that the exchange was sure to torpedo the bill’s chance of getting on the House suspension calendar, where bills presumed to pass easily require 2/3 approval. “We've done nothing for veterans, except I guess we made a couple of comments that made it into the news media,” he said. The amendment failed 11-18.
Also Wed., Nicholson said the VA will offer free credit monitoring for a year to vets possibly affected by the breach.