A proposed class action aims to represent military families allegedly forced to endure “unacceptable and intolerable” living conditions at Marine Corps base Camp Lejeune due to defendants Lend Lease and Winn Management Group’s slumlord-esque failure to provide even the most basic property management and maintenance.
The 70-page lawsuit alleges the following defendants’ prioritization of “profits over tenants” at the long-troubled 156,000-acre Jacksonville, North Carolina base has led to, among other abhorrent conditions, “cockroaches, filth, vermin, leaks, water intrusion, mold and mildew” amid “failing appliances and fixtures, ineffective maintenance, inadequate repairs, and rude and bullying customer service”:
Lend Lease (US) Public Partnerships LLC:
Lend Lease (US) Public Partnerships Holdings LLC
AMCC Managing Member LLC;
Atlantic Marine Corps Communities LLC;
AMCC Property Management LLC;
Atlantic Marine Corps Communities Property Management LLC;
Winn Management Group, LLC; and
WR South LLC.
Though the government placed its trust in the defendants to ensure the housing at Camp Lejeune remained in tip-top condition for servicemembers and their families, the complaint, filed in North Carolina federal court by three Marines and their spouses, alleges the companies instead turned the properties into a guaranteed “profit center” at which basic upkeep took a back seat to keeping investors happy and government overseers in the dark.
According to the plaintiffs, the defendants have for years gotten away with their failure to maintain acceptable living conditions at Camp Lejeune by, among other tactics, taking advantage of the fact that “military servicemembers are trained not to complain” and wielding misleading tenant satisfaction surveys and service data to shield themselves from “the scope of their delinquency.”
Even after affirming before Congress in February 2018 that it would immediately address the laundry list of inexcusable issues plaguing the privatized Camp Lejeune housing—and following an admission from its CEO that certain living standards at the base were “clearly unacceptable”—Lend Lease has nevertheless failed to promptly and permanently address the egregious, “slumlord level” deterioration at the base, the complaint charges.
In all, Camp Lejeune residents who’ve paid monthly basic housing allowances to the defendants within the last four years have received nowhere near the living conditions that were promised. Further, they’ve seen the well-being of their families put at risk by companies who’ve allegedly chosen to cut repair and maintenance costs to satiate lenders and investors who were promised “outsize[d] gains.”
“The rental housing offered by Defendants has been plagued by problems consistent with ‘slumlord’ property management, including water intrusion, mold, mildew, filth, insect pests, broken and unreliable HVAC and appliances, and other issues,” the suit summarizes, describing an ongoing situation in which the defendants have taken full advantage of the fact that military tenants, despite their national security responsibilities, have far less leverage than other property lessees.
No leverage for residents under privatized military housing, suit says
Private-sector developers and property management groups have assumed the bulk of the responsibility for the construction, renovation, maintenance and repair of roughly 99 percent of domestic military family housing in the United States, the lawsuit relays. Following the passage of the Military Housing Privatization Initiative (MHPI) in 1996, a measure sparked by Department of Defense concerns regarding the effect of poor housing on servicemember families, private companies have been allowed to enter into 50-year ground leases with military departments to take on the day-to-day upkeep and management of military housing, according to the suit.
After a bidding process, the Navy selected defendant Lend Lease in 2005 to renovate, demolish and rebuild military housing at Camp Lejeune, Marine Corps Air Station New River, and Marine Corps Air Station Cherry Point pursuant to an operating agreement and 50-year ground lease, the case says. At present, the defendants collect monthly housing allowances for 12 communities, separated by rank, that comprise more than 4,000 residential units at Camp Lejeune.
The plaintiffs allege, however, that the defendants have wholly violated their promises to “improve quality of life for service members and their families” and “assume the responsibility for the military family Resident’s housing” at Camp Lejeune, having done neither while allowing housing at the base to deteriorate to unacceptable and unhealthy levels.
According to the plaintiffs, the contractual promises made by the defendants in their Atlantic Marine Corps Communities guideline and policy documents are false and misleading as the myriad problems with Camp Lejeune’s housing were known to the companies prior to the lease of the properties.
Unfortunately, under the generic take-it-or-leave-it form leases signed by servicemember tenants at Camp Lejeune, there is no wiggle room in which the price of housing can be negotiated, the case stresses. To that extent, the basic monthly allowances paid as rent to the defendants serve as a guaranteed revenue stream for the companies in that a tenant, unlike one not subject to military housing rules, “does not have the ability to threaten to withhold some or all of his rental payment” as a means of forcing the landlord to address poor conditions, according to the complaint.
Moreover, the form lease signed by proposed class members prohibits residents from taking any self-help measures outside of an emergency situation and bars a tenant from deducting the cost of repairs they conducted on their own from rent, the lawsuit says.
It’s within this context that the defendants have failed to address, for instance, mold growth and water intrusion at housing built in the hurricane-threatened “warm, wet, southern climate and environment” of Camp Lejeune, which sits on low-lying lands near the Atlantic Ocean, the plaintiffs illuminate.
Notwithstanding the geographic location of Camp Lejeune and any environmental factors that may affect the buildings, the defendants are still required to operate and maintain residences at the base “in accordance with their marketing representations” touting first-class residential housing.
Mold growth aside, the lawsuit alleges more broadly that the harmful housing conditions at Camp Lejeune stem from and have been exacerbated by the defendants’ prioritization of keeping investors happy at the expense of those forced to live at the base.
Case describes promises made to investors, broken to military tenants
Per the case, the defendants promised private investors “outsize gains” in 2004 and 2005, which the plaintiffs chalk up as incentive enough to cut maintenance costs for Camp Lejeune housing to “unconscionable levels” to keep the companies’ bottom line in the black. Within the last four years, the defendants were aware that service and maintenance was underfunded at the Marine Corps base given they had the ability to compare budgets for Camp Lejeune to other, non-military housing projects.
A comparison of the two reveals that the need to keep residents of non-military housing happy took precedent given the defendants “could not exploit them as captives to the leases as they were able to do with the military families,” the lawsuit alleges.
Overall, the defendants’ course of action toward military housing at Camp Lejeune was successful enough to nearly double Lend Lease’s project valuation amid “challenging economic conditions,” the complaint says. In its 2018 report, Lend Lease flexed the performance of its investments in its U.S. Military housing portfolio, with a similar boost occurring again the following year. The lawsuit says the defendants’ gains amount to simple addition by subtraction.
“This was done by cutting service, repair and maintenance costs, letting housing deteriorate, and causing military families to live in abhorrent conditions,” the plaintiffs argue, describing the conditions at Camp Lejeune under the defendants’ watch.
According to the suit, the defendants possessed a unique awareness of the substandard housing conditions at Camp Lejeune—including of the mold, electrical, plumbing, insect, water intrusion and HVAC woes plaguing the properties—yet “knowingly and intentionally” leased the houses that they misrepresented as habitable.
Allegedly false and misleading tenant surveys, repair data
According to the plaintiffs, one tool used for years by the defendants to obscure the pervasiveness of the deterioration within Camp Lejeune housing has been false and misleading tenant surveys that purport to show satisfaction among those living at the base. Lend Lease and Winn conspired to hide their neglect from the government by promoting “resident satisfaction rates that do not accord with reality” and encouraging tenants to believe a complaint against the companies amounted to a complaint against the chain of command, the lawsuit alleges:
When surveyed by a nonprofit in 2019 in a study cited by Congress, tenants described a four-to-one ratio of negative to positive experiences at MCB Camp Lejeune. Over 60% of the cohort reported negative or very negative experiences. The categories of complaints tracked those of the Plaintiffs.”
Similarly, the defendants covered their tracks with regard to the shoddy maintenance at Camp Lejeune by maintaining repair records that were “so unreliable that a proper audit could not be conducted,” the case continues.
Per the case, the rot within Camp Lejeune housing was discovered only after “investigative reporting, [Governmental Accountability Office] investigation and public outcry” sparked Congressional action. The suit adds the defendants pulled in performance bonuses and incentive payments based on inaccurate satisfaction survey and repair record data.
During a Senate hearing on the current condition of the Military Housing Privatization Initiative, Lendlease Americas CEO Denis Hickey answered in the affirmative when asked if he would do everything in his power to address the housing issues raised by military families.
According to the lawsuit, however, the plaintiffs’ experiences reveal that the “unacceptable conditions” persist.
“These changes necessary to remedy intolerable and unacceptable conditions should have occurred years ago,” the suit reads. “However, Defendants have failed to refund BAH amounts or otherwise compensate servicemember families injured and damaged by the unacceptably poor residential conditions to date. Nor have Defendants offered other remedial measures to servicemember families, such as paying for medical assessment or monitoring for mold-exposed families.”
Instead, the repair efforts promised to be taken by the defendants since Congress stepped in “boil down to establishing a credible repair, service and maintenance facility, like it has promised before but did not provide, and replacing the unfair and deceptive tenant satisfaction surveys, which it calls ‘customer service analytics.’”
Left unsaid: water contamination history
Camp Lejeune has been the focal point of proposed class action litigation in the past. Though it goes unmentioned in the lawsuit detailed on this page, the base was the subject of litigation centered on the contamination of groundwater provided by two of Camp Lejeune’s eight water treatment plants.
The water was contaminated by cancer-causing substances, including industrial solvents, benzene and other volatile chemicals, as a result of the waste disposal practices of an off-base dry cleaning company known as ABC One-Hour Cleaners. In January 2017, the Department of Veterans Affairs finalized without much fanfare a rule allowing potentially thousands of former veterans, reservists and National Guard members, or their surviving spouses, exposed to tainted groundwater at Camp Lejeune to claim a piece of more than $2 billion in government disability benefits.
ClassAction.org’s September 2017 roundup on the state of Camp Lejeune contaminated groundwater litigation can be found here.
Who’s covered by this lawsuit?
The lawsuit looks to represent all servicemember tenants based at Marine Corps base Camp Lejeune who have entered into lease agreements with Atlantic Marine Corps Communities LLC for residential housing units from September 18, 2016 to present, along with all authorized adult family members, spouses or other occupants.
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