KEY TAKEAWAYS: SB 208 revises a 2024 Louisiana law, banning unaccredited consultants from profiting off initial VA disability claims. A federal court previously ruled the earlier law unconstitutional, citing federal preemption and compelled speech issues. Consultants may still charge fees for appeals, with total fees capped at $12,500 under state law. The bill adds protections for veterans, including a right to sue negligent claims consultants, but legal uncertainty remains.   Louisiana lawmakers are working to fix a state law deemed unconstitutional that allowed private companies to take a cut of the benefit payments that go to disabled military veterans. Senate Bill 208, sponsored by Sen. Stewart Cathey Jr., R-Monroe, cleared the House Judiciary Committee with unanimous support Thursday after a similarly easy journey through the Senate. The bill would revise legislation Cathey authored in 2024 by prohibiting private unaccredited consultants from profiting off initial disability claims filed by veterans, though the consultants would still be able to make money from subsequent claims and appeals. Louisiana Veterans Affairs Secretary Charlton Meginley said the legislation addresses one of the primary issues he had with the 2024 law that sought to legalize consultants who take cuts of veterans’ initial benefit payments. He believes those initial claim filings represent a significant percentage of the industry’s profits but noted the legislation still legitimizes a practice that disabled veteran advocates have tried to halt. “Is it what I want? No,” Meginley, a retired Air Force colonel, said in a phone call. “But in the absence of having definitive congressional action … I have to go with what’s in front of me now.” Cathey’s bill stems from an issue that has divided the veteran community. Search the internet for “VA claims consulting,” and it will generate numerous listings for websites that promise to help veterans get large disability checks from the federal government. Many of the websites emerged in 2022 after former President Joe Biden signed the PACT Act into law, approving billions in additional benefits for veterans exposed to hazards such as burn pits and other toxic emissions. In exchange for helping veterans file their VA claims, the consultants take a cut of the benefits, sometimes at amounts exceeding $20,000, though Louisiana has capped their fees at $12,500. Supporters of claims consultants say they provide a private service some disabled veterans are willing to pay for. But critics say it’s exploitative because some of the same services are available for free from VA-accredited organizations such as Disabled American Veterans and Veterans of Foreign Wars. Under federal law, the U.S. Department of Veterans Affairs requires accreditation of any agent or attorney who helps disabled veterans prepare or process claims. The approval process involves a background check and a written exam to ensure consultants can properly assist veterans with claims and represent them in appeals. But in 2006, for reasons that are unclear, Congress removed the enforcement penalties that once existed under the law, Meginley said. The federal law allows authorized or VA-accredited agents and attorneys to charge fees for helping veterans with disability claims, though they can only charge for assisting them with disability rating increases and the longer, more complicated appeals process. It doesn’t allow them to charge fees for assisting veterans with first-time claim applications. That’s where some of the private consultants have found a gray area. By not obtaining VA accreditation, they have been able to operate outside of the VA’s rules as long as they are simply consulting or coaching veterans on how to file claims — and not actually filing the claims on their behalf. Legislation at the federal level has tried to address the issue with competing proposals that would either fully legalize claims consulting or ban it with strengthened enforcement. However, those proposals have long been stalled in Congress, prompting some states to act. In 2021, Louisiana’s then Attorney General Jeff Landry cracked down on some claims consulting companies in the state, accusing them of targeting veterans with deceptive trade practices. Then, as governor, Landry did not sign Cathey’s 2024 bill that legalized claims consulting, allowing it to become law by default. In February, a federal court declared that law unconstitutional, ruling in favor of John B. Wells, a VA-accredited Slidell lawyer and retired U.S. Navy commander who represents veterans in legal disputes over their military benefits. The judge wrote that Louisiana’s law “impedes the realization of Congress’s goal of ensuring that veterans have access to qualified representatives to assist them in pursuing claims for VA benefits.” The court additionally found other parts of the 2024 law violated the First Amendment because of a mandatory disclosure provision requiring all claims consultants, agents and attorneys to tell their clients, verbally and in writing, that the same services are available for free from the state Department of Veterans Affairs and service organizations like the VFW. Although lawmakers included the disclosure provision as a way to prevent disabled veterans from falling victim to swindlers, it was a big problem for VA-accredited lawyers and agents who primarily litigate appeals and offer complex legal representation that cannot be obtained for free from a veteran service organization. The disclosure statement amounted to unreasonably compelled speech, the court found. Louisiana Attorney General Liz Murrill is appealing the ruling. Cathey’s new bill seeks to remedy the constitutionality issues by exempting any VA-accredited agents or attorneys from the law. It also adds provisions creating a right of action that would allow veterans to sue claims consultants who negligently cause them to lose their benefits. Wells, who is still opposed to the legislation, asked lawmakers to not get involved in what he argued is a federal matter being addressed through federal litigation. Meginley, Louisiana’s VA secretary and also an attorney, said it remains to be seen if the latest revisions to the law will allow it to pass constitutional muster. He said it could still face the issue of “preemption,” meaning the court could strike down the state’s law if it finds that federal law supersedes it. Cathey said there are no laws to prevent unscrupulous VA claims companies from exploiting veterans. “This just puts some protections in the law at the state level to keep unaccredited people from going through and taking advantage of veterans,” Cathey told the committee. “That’s all we’re trying to do is just protect veterans.” His bill heads next to the floor of the House of Representatives. Unless any amendments needing Senate approval are attached, it would then go to the governor’s desk for his signature. ...read more read less