The first quarter of 2026 brought a run of consequential military lawsuits and court rulings, led by a Supreme Court decision stripping war-zone contractors of blanket immunity, an Army settlement that converts burn pit illnesses into tax-free retirement pay for many veterans, and a wave of class actions touching disability evaluations, discharge upgrades, airline employment, privatized housing, and VA benefits. If you served, worked for a defense contractor, or depend on VA or DoD benefits, several of these cases change what you can claim and how.
Supreme Court Strips Blanket Immunity From War-Zone Contractors
On April 22, 2026, the Supreme Court decided Hencely v. Fluor Corporation 6-3, vacating a Fourth Circuit ruling that had shielded military contractors from state-law negligence suits arising from combat-zone operations.1Cornell Law Institute. Hencely v. Fluor Corp., No. 24-924
The case grew out of a 2016 suicide bombing at Bagram Airfield in Afghanistan. Ahmad Nayeb, a Taliban operative, had been hired as a local contractor through Fluor under the military’s “Afghan First” initiative. The attack killed five people and wounded seventeen. Former Army Specialist Winston T. Hencely, who intervened to stop the attacker, suffered a fractured skull and permanent brain injuries. An Army investigation found Fluor “primarily responsible,” citing complacency and failure to supervise its personnel in violation of contractual obligations and base security policies.2Supreme Court of the United States. Hencely v. Fluor Corp., No. 24-924
Writing for the majority, Justice Thomas held that neither the Constitution, federal statutes, nor the Court’s precedent in Boyle v. United Technologies Corp. supports a blanket “battlefield preemption” doctrine. The Boyle defense is narrow: it protects a contractor only when the government specifically directed the act being challenged. Because Hencely alleged Fluor acted contrary to military instructions, Boyle did not apply. The Court also made clear that federal contractors do not automatically share the government’s sovereign immunity. Justice Alito dissented, joined by Chief Justice Roberts and Justice Kavanaugh.3SCOTUSblog. Hencely v. Fluor Corporation
The practical effect is that service members and civilians injured by contractor negligence overseas can now bring state-law claims that lower courts had been dismissing for years, so long as the contractor acted outside what the government specifically directed.
Army Reclassifies Burn Pits as Instrumentalities of War
A March 6, 2026 settlement in Smoke et al. v. Driscoll requires the U.S. Army to designate open-air burn pits in combat zones as “instrumentalities of war” when deciding whether a medical retirement disability is combat-related. The case was brought by the National Veterans Legal Services Program and Sidley Austin in the U.S. District Court for the District of Columbia.4NVLSP. NVLSP and Sidley Settle Class Action Lawsuit With U.S. Army
The classification matters because combat-related medical retirement pay is tax-exempt. Before the settlement, the Army treated burn pits as instrumentalities of war only when they were used to burn specific items like munitions or vehicles, which excluded many veterans whose illnesses were presumed service-connected under the PACT Act. The named plaintiffs, Sergeant First Class Kyle Smoke (medically retired for asthma) and Lieutenant Colonel Jennifer McIntyre (medically retired for breast cancer), had their records corrected as part of the agreement.
Under the new policy, a “combat zone” covers any qualified hazardous duty area designated by Congress where soldiers earn hostile fire or imminent danger pay, as well as areas where DoD certifies service in direct support of combat operations. The Army will identify and review records of soldiers medically retired on or after August 10, 2022 (the PACT Act’s enactment date) for a PACT Act condition who were not initially granted a combat-related designation, with revised determinations to be issued within six months.5NVLSP. Smoke et al. v. Driscoll Instrumentality of War FAQ
CRSC Retroactive Pay: New Lawsuit After the Soto Win
In June 2025, the Supreme Court ruled unanimously in Soto v. United States that there is no six-year cap on retroactive Combat-Related Special Compensation payments. The decision affected a class of over 9,000 combat-disabled veterans, and the Navy began reviewing more than 15,000 claims to identify recipients whose awards had been cut by the limit.6NVLSP. Supreme Court Rules for 9,000 Combat-Disabled Veterans7Secretary of the Navy. Soto v. United States
DoD’s response created a new dispute. In August 2025 guidance and a January 2026 clarification, the department directed that veterans applying for CRSC after August 20, 2025 would receive retroactive benefits only from the month following their application date, not from the date they first became eligible. On March 13, 2026, NVLSP filed Ploe v. United States in the U.S. Court of Federal Claims, seeking class certification on behalf of veterans who argue the new policy still violates the CRSC statute. A merits briefing schedule has been set.8NVLSP. Soto v. U.S. Retroactive CRSC FAQs
Air Force Pre-IDES Screening Class Certified
On January 16, 2026, a federal judge in the Eastern District of Virginia certified a class in Watts v. Meink, challenging the Air Force’s use of a “Pre-IDES” screening process alleged to have blocked service members from entering the Integrated Disability Evaluation System. The class includes current and former Air Force members, reservists, and Air National Guard personnel who, from July 1, 2019 to the present, met IDES referral criteria but were diverted into pre-screening and denied access. NVLSP estimates thousands of service members and veterans are affected.9NVLSP. Court Certifies Class Action in NVLSP IDES Lawsuit
The plaintiffs argue the pre-screening policy violates the Due Process Clause, the Administrative Procedure Act, and DoD regulations governing disability evaluations. They are asking the court to order the Air Force to drop the Pre-IDES policy and provide the medical retirement process guaranteed by law.
LGBTQ Veterans Can Correct Discharge Records
On March 12, 2025, a federal judge in the Northern District of California granted final approval to the settlement in Farrell v. Department of Defense, a class action on behalf of veterans discharged under “Don’t Ask, Don’t Tell” and predecessor policies. The case was dismissed with prejudice on March 15, 2025.10Civil Rights Litigation Clearinghouse. Farrell v. United States Department of Defense
The settlement class covers veterans administratively separated before September 20, 2011 whose DD-214 discharge documents reference sexual orientation in a code or narrative reason. Two tracks are available depending on the discharge:
- If you received an honorable or uncharacterized discharge, you can request a new DD-214 with all sexual orientation references removed. The narrative reason and separation code change to “Secretarial Authority,” and the re-entry code changes to RE-1.
- If you received a general or other-than-honorable discharge, you can request an expedited group board review for an upgrade to “Honorable.” Upgrades are expected to be granted absent aggravating factors.
DoD agreed to pay $350,000 in attorneys’ fees and costs. The department must post information and mail letters to class members within five months of final approval, and class members have three years from the start of the correction process to submit requests.11Military Review Boards. Class Notice, Farrell et al.
Southwest Airlines $18.5 Million USERRA Settlement
A proposed $18.5 million settlement in Huntsman v. Southwest Airlines Co. resolves claims that the airline violated the Uniformed Services Employment and Reemployment Rights Act by failing to compensate employees for short-term military leave. The class includes nearly 2,800 current and former Southwest employees who took military leave of 14 days or fewer between October 10, 2004 and January 1, 2026 under a collective bargaining agreement.12ClassAction.org. $18.5M Southwest Airlines USERRA Settlement
The settlement also requires Southwest to provide current employees with up to ten days of differential pay for military leave each calendar year for five years, calculated as the difference between the Southwest daily rate and military pay, with a minimum of $30 extra per leave day. The court granted preliminary approval on December 11, 2025, and set a final approval hearing for May 14, 2026. Most class members with an estimated payment do not need to take any action; those whose notice listed a $0 estimated payment had to file a claim form by April 28, 2026.
Military Housing: Supreme Court Lets Hunt Immunity Ruling Stand
On March 13, 2026, three military families filed suit in the Western District of Texas against Hunt Military Communities, alleging mold, sewage problems, lead paint, asbestos, and structural deficiencies in housing at Randolph Air Force Base. They joined eight other families who had sued Hunt in 2019 over similar conditions.13Stars and Stripes. Military Families Lawsuit Housing Randolph AFB
Between 2019 and 2022, 21 military families filed four lawsuits in Texas federal courts against Hunt over housing at Randolph, Laughlin, and Goodfellow Air Force bases and Fort Sam Houston. The only family to complete a jury trial as of early 2026 was Lieutenant Colonel Shane and Becky Vinales, awarded more than $91,000 in 2023. Jury trials for three more families are scheduled for summer 2026.
Hunt has leaned on the “federal enclave doctrine,” arguing that because military bases are governed by federal law, the company is exempt from state tenant-protection statutes enacted after the government acquired the land. The Fifth Circuit ruled in Hunt’s favor on that question in June 2025. The Supreme Court denied review in Vinales v. AETC II Privatized Housing LLC on January 12, 2026, leaving the Fifth Circuit’s immunity ruling in place for families at Randolph.14Project on Government Oversight. Inside the Fight for Safe Military Housing15Supreme Court of the United States. Vinales v. AETC II Privatized Housing, No. 25-615
PFAS Water Contamination on Military Bases
The multidistrict litigation over PFAS contamination from aqueous film-forming foam used at military installations continues to grow. As of May 2026, MDL No. 2873: In Re: Aqueous Film-Forming Foams Products Liability Litigation had 15,232 active cases before Judge Richard M. Gergel in the U.S. District Court for the District of South Carolina.16Lawsuit Tracker. Military Base Water Contamination Lawsuit
Defendants include the U.S. government and major chemical manufacturers such as 3M, DuPont, Chemours, and Corteva. In May 2025, 3M reached a settlement of up to $450 million with the State of New Jersey over PFAS water contamination. A bellwether pool of 25 trial cases was established under a May 2024 case management order, limited to plaintiffs alleging kidney cancer, testicular cancer, thyroid disease, or ulcerative colitis. DoD has identified 581 installations requiring PFAS cleanup, and EPA set a 2031 deadline for water utilities to address PFAS. New case intake for the federal PFAS litigation has been suspended due to court-ordered deadlines.
VA Benefits: GI Bill Directives and Substantive Appeals
Two VA cases are reshaping how veterans access benefits they are owed.
GI Bill Dual-Eligibility After Rudisill
The Veterans of Foreign Wars, the Commonwealth of Virginia, and individual veterans including James Rudisill are challenging VA directives they say contradict the Supreme Court’s decision in Rudisill v. McDonough, which held that veterans eligible for both the Montgomery GI Bill and the Post-9/11 GI Bill are entitled to benefits under both programs up to a 48-month cap. The suit, filed in the Federal Circuit as Commonwealth v. Secretary of VA, alleges that VA’s 2024 Education Directives still require a break in service, block transfer of benefits to dependents, refuse to extend dependent usage deadlines, and deny retroactive relief. VA has moved to remove the VFW as a petitioner, claiming the organization lacks affected members; the VFW says it has submitted affidavits refuting that.17VFW. VFW Calls on VA to Honor Supreme Court Ruling on GI Bill Benefits
Freund v. Collins: Closed Appeals to Be Reopened
On March 18, 2026, the U.S. Court of Appeals for Veterans Claims certified Freund v. Collins as a class action covering VA claimants whose timely substantive appeals were closed without being processed between December 12, 1990 and February 6, 2025. A proposed settlement filed December 16, 2025 would have VA manually review 28,258 appeal files, reactivate any containing a timely appeal, and send individual notices to claimants regarding up to 64,599 closed files, advising them of their right to request review. The objection deadline was May 15, 2026.18Department of Veterans Affairs. Notice of Proposed Settlement, Substantive Appeals
Supreme Court Closes the COVID Vaccine Discharge Cases
On February 23, 2026, the Supreme Court declined to hear two cases brought by service members discharged for refusing the COVID-19 vaccine. In Poffenbarger v. Meink, Air Force Reserve First Lieutenant Michael Poffenbarger sought back pay and retirement points after lower courts dismissed his case as moot once DoD allowed service members to return. In Doster v. Meink, 18 Air Force members who challenged the mandate in 2022 faced a similar outcome; the lower court noted they had not requested back pay in their original filing.19Military Times. Supreme Court Declines COVID Vaccine Mandate Cases
The denials largely close the courtroom path for these plaintiffs. A separate executive order signed by President Trump on January 27, 2025 directed the reinstatement of discharged service members with full back pay and benefits. DoD developed implementing policies, though back pay is contingent on the service member returning under additional terms of service and is reduced by civilian wages earned during separation.
NATO Procurement Bribery Charges
On January 26, 2026, the Department of Justice unsealed an indictment charging Turkish defense contractor Bahadir Hatipoglu, 50, and former NATO procurement official Ralf Grywnow, 70, with conspiracy to commit wire fraud and four counts of wire fraud tied to U.S. military and NATO construction contracts. Prosecutors allege Hatipoglu bribed Grywnow with cash, a romantic encounter in Dubai, and help building and furnishing a home in Poland. In exchange, Grywnow allegedly falsified performance reviews that concealed deficiencies in Hatipoglu’s companies and kept them eligible for defense projects.20Department of Justice. Former NATO Official and Turkish Defense Contractor Indicted
Both defendants were arrested under provisional warrants, Hatipoglu in Lithuania and Grywnow in Poland. DOJ was working with authorities in both countries to secure extradition. Each defendant faces up to 20 years in prison if convicted. Because NATO does not qualify as a “public international organization” under the Foreign Corrupt Practices Act, DOJ brought the charges under wire fraud statutes.21Stars and Stripes. Bribery Military Construction Contracts NATO