Maine AG sued over law meant to protect veterans from ‘claim sharks’

A new Maine law designed to protect veterans from “claim sharks” violates people’s First Amendment rights, a lawsuit filed against the state’s attorney general alleges.

The law, which took effect Friday, bans specific types of businesses from charging veterans who are filing disability claims with the U.S. Department of Veterans Affairs. It was designed to stop “claim sharks,” who aggressively solicit veterans and charge them thousands of dollars to help them obtain VA disability benefits, while accredited agents and lawyers can secure benefits for little to no cost.

Restricting what businesses are allowed to help veterans is unconstitutional, according to a lawsuit filed Friday in the U.S. District Court of Maine in Bangor. The lawsuit, brought by North Carolina-based Veterans Guardian VA Claim Consulting, alleges the law violates constitutional guaranteed rights to free speech and petition.

The law should be declared unconstitutional and enforcement of it should be stopped, the lawsuit said.

Maine Attorney General Aaron Frey is sued in his official capacity, the lawsuit said.

The attorney general’s office does not comment on pending litigation, spokesperson Danna Hayes said.

Maine’s law lumped together “responsible industry participants like Veterans Guardian” with companies that may not be scrupulous, the lawsuit said. The consulting company said in the lawsuit that it operates in all 50 states and has successfully increased disability benefits by an average of $1,000 a month per person.

More private firms, which typically charge fees, got involved with helping veterans secure additional disability benefits since the 2022 PACT Act passed. The act expanded benefits for veterans exposed to Agent Orange in Vietnam or burn pits in Iraq and Afghanistan . Service organizations such as the Veterans of Foreign Wars, American Legion and Disabled American Veterans do similar work for free.

There are around 253,000 backlogged VA claims as of June, according to the department.

Three Maine military veterans, David Needham, Eric Dostie and Jeremiah Wesbrock, are also involved in the lawsuit. They used Veterans Guardian consulting to petition the VA for expanded disability benefits based on lasting injuries from their service, the lawsuit said.

However, the men can no longer use the company to appeal for additional benefits because of the new law, depriving them of earned benefits, according to the lawsuit.

Under federal law, “agents and attorneys” cannot charge for services for an initial benefits claim. The law does not prohibit unaccredited organizations from collecting fees.

The agreement veterans must sign before hiring Veterans Guardian makes it clear the company is not a law firm and also tells people about the free options for benefit claims, according to the lawsuit.

If the consulting firm is successful in securing more benefits, a formula determines the fee a veteran will pay. It’s the equivalent of five months’ worth of the difference between the new monthly benefits and the old benefits, the lawsuit said. The company said if benefit payments are not increased, the veteran does not pay anything.