News Summary
The House Judiciary Committee recently failed to vote on the Litigation Transparency Act, which aimed at limiting third-party litigation funding. This bill, introduced by Rep. Darrell Issa, faced criticisms for potentially undermining patent rights. Conversely, the committee advanced the Protecting Our Courts from Foreign Manipulation Act, aimed at increasing transparency by prohibiting foreign funding in U.S. litigation. This reflects ongoing divisions in Congress regarding litigation funding and its implications.
House Judiciary Committee Fails to Vote on Litigation Transparency Act While Advancing Foreign Manipulation Bill
In a recent and somewhat surprising turn of events, the House Judiciary Committee failed to vote on the Litigation Transparency Act of 2025, which aimed to limit third-party litigation funding. This piece of legislation was introduced by Representative Darrell Issa from California and sought to require parties involved in civil actions to disclose all third-party funding sources. Alongside Issa, the bill also had support from other prominent representatives, including Scott Fitzgerald from Wisconsin and Mike Collins from Georgia.
During discussions, Rep. Issa emphasized that the primary aim of the Litigation Transparency Act is to tackle what he referred to as “abuses” in the litigation system that often cloud justice for the sake of financial gain. However, the bill faced criticisms from several quarters, particularly from the Inventors Defense Alliance. This group raised concerns that the proposed legislation would actually undermine the enforceability of patents and intellectual property rights, which are crucial for small inventors and startups who rely on these protections to thrive.
Another Bill Advances: Protecting Our Courts from Foreign Manipulation Act
While the Litigation Transparency Act stalled, another bill known as the Protecting Our Courts from Foreign Manipulation Act did manage to gain a favorable report from the committee, passing with a vote of 15 to 11. This act aims to amend federal law to boost transparency, specifically by prohibiting funding from foreign states and sovereign wealth funds in U.S. litigation.
However, not all representatives were on board with this legislative approach. Rep. Jamie Raskin of Maryland criticized both bills, claiming they would primarily benefit large corporations while compromising true accountability for any unlawful actions. Raskin pointed out that third-party litigation funding is fully legal and ethical, arguing that if any rules are broken, the courts are equipped to handle it appropriately.
Interestingly, some Democratic representatives questioned the notion that the funding of litigation poses significant national security threats. Raskin attributed these concerns to unrelated political issues, encouraging a closer examination of the facts.
Voices from Both Sides: Supporters and Critics
Notably, conservative groups such as America First Legal and the Oversight Project have also expressed opposition to the Litigation Transparency Act, suggesting that there are widespread disagreements regarding the perceived problems in the current litigation funding landscape. On the other hand, Representative Andy Biggs from Arizona noted that the distinction between the two bills is clear; he believes that the Protecting Our Courts from Foreign Manipulation Act addresses more immediate concerns about foreign influence on U.S. litigation practices.
Biggs pointed out real-world examples where foreign funding has affected domestic legal proceedings, mentioning how oligarchs have manipulated the system to fund lawsuits in the U.S. despite existing sanctions.
A Demand for Transparency in Litigation Funding
The need for increased transparency in litigation funding has gained traction, especially in light of recent assessments from organizations such as the National Insurance Crime Bureau and 4WARN, which have linked litigation funding to a rise in overall litigation volume. In fact, some reports indicate that about 74% of insurance companies studied have found themselves targeted by litigation-related marketing campaigns funded by external sources.
Moreover, several states are proactively proposing or have already advanced measures to enhance transparency in litigation funding. These proposals may require registration or even impose limitations on funder involvement, reflecting a growing awareness of the issue at both state and federal levels.
It’s noteworthy that litigation funding has broader economic implications as well. Reports estimate that it costs the average U.S. household an additional $2,437 each year due to excess tort costs, which highlights the financial strain that such litigation practices can impose on everyday citizens.
As for the future of the Litigation Transparency Act, Rep. Issa mentioned that there would be opportunities for further discussions and hearings on the matter. Whether this will lead to a different outcome remains to be seen, but it undoubtedly reflects the complex nature of balancing accountability and innovation in today’s legal landscape.
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Additional Resources
- IP Watchdog
- Reuters
- Law.com
- Wikipedia: Litigation funding
- Google Search: third-party litigation funding
Author: STAFF HERE NORTHVILLE WRITER
The NORTHVILLE STAFF WRITER represents the experienced team at HERENorthville.com, your go-to source for actionable local news and information in Northville, Wayne County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Summer Concert Series, Tunes on Tuesday, and the Northville Farmers Market. Our coverage extends to key organizations like the Northville Chamber of Commerce and Northville Community Foundation, plus leading businesses in automotive, software, and retail that power the local economy such as Gentherm, Reliable Software, and Attendance on Demand. As part of the broader HERE network, including HEREDetroitMI.com, HEREGrandRapids.com, HERENovi.com, and HEREPlymouth.com, we provide comprehensive, credible insights into Michigan's dynamic landscape.
