HR-2675-119
Placed on the Union Calendar, Calendar No. 608.
Sponsored by Ben Cline (R-VA)
What it does
This bill would prohibit foreign governments and sovereign wealth funds from directly or indirectly funding civil lawsuits in U.S. federal courts where they are not a named party. It would also require parties and attorneys in federal civil cases to disclose any foreign person, foreign state, or sovereign wealth fund providing litigation funding or holding a contingent right to proceeds, with violations subject to case dismissal, voided agreements, or relief from judgment, and the Attorney General would submit annual reports to Congress on foreign litigation funding activity.
Who benefits
Domestic litigants and defendants (including U.S. companies facing lawsuits backed by foreign funders) who would gain visibility into and protection from foreign-government-backed litigation; U.S. national security interests seeking to limit foreign influence over the courts; the Department of Justice, which gains new investigative and reporting authority.
Who is hurt
Plaintiffs and law firms that rely on third-party litigation funding sourced from foreign sovereign wealth funds or state-linked investors, who would lose access to that capital and face new disclosure burdens and litigation risk; foreign states and sovereign wealth funds seeking to invest in U.S. litigation finance; litigation funding companies that source capital internationally and must now trace and certify the origin of funds.
Supporters argue
Supporters argue that foreign governments and sovereign wealth funds should not be able to covertly bankroll lawsuits against American companies to advance geopolitical or economic interests, and that current law allows this influence to occur with no disclosure at all. They contend transparency and prohibition provisions are narrowly tailored to foreign state actors and sovereign funds, leaving ordinary domestic litigation funding untouched, and that courts and opposing parties deserve to know who is financially controlling a case.
Opponents argue
Opponents argue the disclosure and certification requirements could impose significant compliance burdens and legal uncertainty on legitimate litigation funders and plaintiffs, particularly in complex portfolio-funding arrangements where sourcing money is difficult to trace with certainty. They contend the bill could deter otherwise valid claims by cutting off funding sources for plaintiffs who cannot otherwise afford to litigate against well-resourced defendants, effectively tilting the playing field toward better-capitalized parties.
Constitutional context
Congress has authority under Article I to regulate the jurisdiction and procedure of federal courts, and the bill's disclosure and funding restrictions on foreign states raise no barrier under existing case law, since courts have long upheld procedural rules governing standing, discovery, and financial disclosure in federal litigation; sovereign immunity concepts from the Foreign Sovereign Immunities Act (28 U.S.C. 1603, referenced directly in the bill) also inform how "foreign state" is defined.
Checks and balances
Congress creates new statutory restrictions and reporting requirements enforced through the federal judiciary (dismissal, sanctions, relief from judgment) and the Department of Justice (receiving disclosures and reporting to Congress), with courts retaining discretion over enforcement and remedies.
Historical precedent
Congress has previously enacted foreign-influence transparency measures such as the Foreign Agents Registration Act, though this bill's specific focus on litigation funding disclosure is a novel application in the federal court system.