Law Firm Faces Sanctions for Failing to Vet Ugandan Claims in $6B 3M Case
An Alabama law firm will likely have to pay more than $800,000—plus another $100,000 in sanctions—for failing to verify hearing loss in hundreds of Ugandans who claimed part of the massive settlement over faulty 3M earplugs.
“It’s been a learning experience for us,” said Birmingham attorney Stephen Heninger of the Heninger Garrison Davis law firm, one of many mass-tort firms that were part of the multi-district federal litigation over the 3M Combat Arms earplugs. “It’s extremely doubtful we will represent foreign claimants again because they’re not as trustworthy as people in the United States and Canada.”
3M reached a $6 billion settlement in 2023, agreeing to provide significant payments to thousands of military members, government contractors and others who used the earplugs and suffered hearing loss. Insurers have been asked to cover about $1.5 billion of that, according to law firms involved. Multiple insurers are in litigation over 3M’s coverage claims. Chubb Bermuda and ACE Bermuda Insurance were in arbitration with 3M as of this month.
The Heninger Garrison law firm signed up almost 1,000 Ugandans who were recommended by a Ugandan lawyer, according to a court-appointed special master who recommended the sanctions. But the law firm did not verify audiograms from the African claimants – and most of those audiograms turned out to have been forged or faked.
“The undersigned does not find that any member of the Heninger Garrison Davis firm intentionally committed fraud on the court through this settlement program,” the special master, David Herndon, a retired federal judge, wrote in his report in December.
It is clear, however, that two members of the firm “were not simply negligent in the handling of these claims, but instead were consciously and recklessly indifferent to the variety of circumstances of the Ugandan settlement program, allowing fraud to occur and equally indifferent to their duties as officers of the court…,” Herndon wrote.
Litigation and tort-reform experts said the lack of scrutiny shows the risk involved in massive class actions, in which plaintiff law firms can gain millions of dollars in attorney fees but individual claimants end up with smaller amounts.
“Class-action lawsuits always present a vetting problem. Indeed, the impossibility of knowing all the clients in a class-action lawsuit is the reason historically that class-action lawsuits were disfavored,” said Robert Jarvis, a law professor at Nova Southeastern University.
In 1966, federal courts, then state courts began accepting more class-actions after adopting rules requiring a robust intake system designed to weed out fraud, Jarvis noted. The Heninger firm did not seem to have such a system in place, allowing fraudulent claims to slip through, according to the special master’s report.
Others said the firm’s lack of scrutiny is troubling, considering the huge amounts that insurers and businesses often have to pay in mass tort litigation damages and defense costs.
“Attorneys have a continuing obligation to verify the veracity of potential clients’ claims. If they fail to do so, they can be held accountable by judges and the Bar,” said William Large, president of the Florida Justice Reform Institute.
In the Heninger episode, it was a forgotten deadline and a misunderstood court instruction that may have led firm members to rush through the Ugandan claims at the last minute, the special master’s report suggests.
“What is clear to this Special Master is that Heninger Garrison Davis’ handling of its Ugandan claims failed at several levels,” Special Master Herndon wrote.
The Ugandan claims began with a phone call from Uganda lawyer known by several names, it turned out. The lawyer, whose real name is Arafah Musoke, according to Herndon’s report, told a Heninger attorney that he had many clients that had served as security contractors for U.S. bases and embassies in war zones.
But when emails from Ugandan claimants, all containing the same wording, began circulating, the BrownGreer settlement administrator firm, based in Virginia, started scrutinizing the paid claims. An audit found that the audiograms submitted by Musoke and others were faked and looked nothing like standard hearing test reports seen from U.S. medical professionals.
The license for one Ugandan medical clinic had been forged. The claimants were probably not exposed to warfare, shootings or other loud noises during their contract period at U.S. bases, reports found. The Heninger firm did not know or did not check on the fact that most U.S. military contractors undergo a baseline hearing test before they begin work, and these were available from the U.S. Defense Occupational and Environmental Health Readiness System but were never requested, the special master explained. Further, it was never shown that the Ugandan contractors actually used the 3M earplugs.
At one point, Herndon interviewed Musoke. The Ugandan lawyer explained that some local audiograms had been hurriedly “recreated” and backdated because original records had been lost—but medical professionals “knew” the claimants.
Heninger Garrison attorneys indicated they were not aware of some Ugandans’ reportedly shady reputation—despite a U.S. State Department website warning that fraud is prevalent in the country, the 37-page report noted.
“The finding of this Special Master is that all except four of the Ugandan claims submitted by Heninger Garrison Davis were fraudulent,” Herndon wrote.
Those four claims had some indicia of reliability, but they still raised questions.
The special master recommended the Heninger law firm should pay at least $50,000 in sanctions, while a named partner charged with oversight of the claims should pay another $10,000, and two others at the firm should pay $20,000 each. One of those attorneys is no longer with the firm. The judge has yet to sign off on the penalties.
The firm should also pay an estimated $804,000 that the settlement paid out on the fraudulent claims, the special master report said. That includes almost $322,000 in attorney fees. The court should ask the BrownGreer settlement administrator firm to determine the exact amount to be returned by the firm and paid into the settlement program and a common benefit fund.
Those who investigated the fraud should also be compensated, Herndon said.
Jarvis, the Nova Southeastern law professor, said the level of sanctions appears to be rather low, given how much work it took to uncover the lack of vetting and the number of fraudulent claims involved.
The special master’s Dec. 5 report noted that the Heninger firm had indicated it did nothing wrong. The firm responded to the report in a Dec. 19 filing:
“While we acknowledge and respect the Special Master’s finding that our firm’s training, guiding, vetting, and submission of claims relative to this singular, unique group of Ugandan clients was deficient, we must emphasize, without reservation, that this firm did not knowingly or intentionally engage in any fraudulent conduct with regard to these claimants or otherwise.”
Almost $3 million of the $6 billion overall settlement has been paid, but hundreds of claims are still being processed and should be paid by 2029, according to lawyers involved and news reports.
Top photo: Earplug similar in appearance to the 3M earplugs (AdobeStock)
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