Several groups renew calls for a mandatory TPLF disclosure rule

June 9, 2023 / 48 min read

As referenced in several of the author’s prior articles, one of the major questions on the third-party litigation funding (TPLF) front is: Should the Federal Civil Rules of Procedure be amended to include a mandatory TPLF disclosure requirement?

Currently, the Federal Rules of Civil Procedure (Federal Rules) do not contain an explicit provision requiring parties to disclose TPLF agreements (or TPLF information). Over the past several years, many industry groups have asked the Federal Advisory Committee on Civil Rules (Advisory Committee)^[1] to amend the Federal Rules to include a mandatory TPLF disclosure provision. To date, the Advisory Committee has not recommended establishing a TPLF disclosure rule. In an interesting new development, several industry groups have sent a new letter to the Advisory Committee asking the Committee to revisit the TPLF disclosure issue.

several industry groups

Regarding this development, the author presents the following for consideration:

Summary

For almost a decade now, the question regarding whether the Federal Rules should be amended to include a TPLF disclosure requirement has been a hotly contested issue between competing industry groups and stakeholders.

One of the main groups leading the charge for a TPLF disclosure rule is the United States Chamber Institute for Legal Reform (ILR). In 2014 and 2017, the ILR submitted proposals to the Advisory Committee seeking to add a mandatory TPLF disclosure provision to Fed. R. Civ. P. 26(a)(1)(A) (“Rule 26”). Over the past nine years the Advisory Committee has discussed this request at various times (and with varying degrees of detail) as part of their regular meetings. The Advisory Committee’s most recent deep dive into the issue was in October 2021 at which time the Committee, for certain reasons outlined below, continued to recommend against adding a TPLF disclosure requirement as part of Rule 26.

Against this backdrop, several industry groups have sent a new letter to the Committee on Rules of Practice and Procedure dated May 8, 2023 (May 8^th letter) renewing their calls for a mandatory TPLF rule to be included as part of Rule 26. This letter is signed by 35 industry groups, including the ILR, along with other likely recognized groups such as the American Property Casualty Insurance Association, the Association of Defense Trial Attorneys, the DRI Center for Law and Public Policy, and the National Association of Mutual Insurance Companies.^[2] Click here to view a full list of signatories to this letter (and a brief description of each group) as contained in pages 11 -17 of the May 8^th letter.^[3]

As discussed more fully below, the signatories to the May 8^th letter assert, in main part, the following three reasons in support of their renewed calls for a mandatory TPLF disclosure rule: (1) alleged “mounting evidence” of funder control over litigation and settlement decisions; (2) growing use of TPLF arrangements as part of “all types of civil litigation” and increased funding amounts; and (3) the need to standardize and simplify TPLF disclosure approaches as part of a single disclosure rule.^[4]

Going forward, we will now need to monitor if the May 8^th letter propels the Advisory Committee to revisit the issue of adding a TPLF disclosure provision to Rule 26 and, if so, if the Committee shows any signs of moving away from its historical reluctance to do so.

In the interim, as we wait to see what may happen next, for those interested in a more detailed overview into the TPLF disclosure issue, the below first provides a general review of the recent efforts to amend Rule 26 to help place the May 8^th letter in better perspective. From there, the author outlines key points and arguments asserted by the signatories to the May 8^th letter as follows:

Brief history re: efforts to amend Rule 26 to include a mandatory TPLF disclosure provision

As referenced above, in 2014 and 2017, the United States Chamber Institute for Legal Reform (ILR) (with support from other industry groups) submitted proposals to the Advisory Committee to include an automatic TPLF disclosure requirement in all federal civil cases as part of Fed. R. Civ. P. 26(a)(1)(A).[v] Currently, Rule 26 requires, in part, the production of various documents and information, including a defendant’s insurance agreement, without a specific discovery request, unless otherwise exempted under the rules, or stipulated or ordered by the court.^[6]

As proposed, a new subsection (v) would be added to Rule 26(a)(1)(A) to require a party, in general, to produce, without awaiting a discovery request, “for inspection and copying … any agreement under which any person, other than attorney permitted to charge a contingent fee representing a party, has a right to receive compensation that is contingent on, and sourced from, any proceeds of the civil action, by settlement, judgment or otherwise.”^[7]

As part of these efforts, the ILR and other TPLF disclosure advocates have argued, in part, that TPLF’s proliferation and expansion raises a number of concerns calling for transparency, including potential legal and ethical conflict of interest issues for counsel and judges; questions regarding funder control and influence over a plaintiff’s litigation and settlement decisions; promoting consistency with the federal court’s interest in safeguarding legitimate, ethical civil litigation practices; identifying potential violations of state champerty laws; and creating parity of financial disclosure under Rule 26.^[8]

From the other side, the American Association for Justice (AAJ) is one of the groups which has challenged efforts to amend Rule 26. In January 2018, the AAJ submitted a letter to the Advisory Committee refuting what it referred to as the ILR’s “one sided” proposal on several grounds.^[9] For example, the AAJ argued, in part, that the proposed TPLF disclosure rule would not solve the alleged conflict of interests concerns; that state ethics commissions were the “most appropriate” body to consider TPLF ethical concerns; and that there was no evidence that third-party funders were “dictat[ing] the litigation strategy or decisions,” or undermining attorney-client privilege protections.^[10] From the AAJ’s view, the ILR’s efforts to amend Rule 26 was “just an attempt to unbalance the playing field.”^[11]

Federal Advisory Committee has, to date, rejected calls for a mandatory TPLF disclosure rule

In response to these proposals, the Advisory Committee has discussed TPLF disclosure issues at various points over the past several years as part of their regular committee meetings but, to date, has not recommended any action toward amending Rule 26, opting instead to continue to “monitor” developments.^[12] At one point, the Advisory Committee referred the matter to its Multi-District Litigation (MDL) Subcommittee.^[13] However, after about two years of study, the MDL Subcommittee returned the matter back to the Advisory Committee in conjunction with the Committee’s October 2019 meeting noting, in part, that it felt that TPLF “did not seem particularly prominent” in the MDL context and that “further work on a possible rule would be suspended, but that the evolution of TPLF would be monitored going forward, not with a primary focus on MDL proceedings but with regard to all civil litigation.”^[14]

Recent Advisory Committee activity – no recommendations for a TPLF disclosure rule

In October 2021, the Advisory Committee gave the TPLF issue a detailed re-examination, with their October 2021 agenda booklet containing more than 40 pages of material on the Committee’s historical activity regarding TPLF, including a 20 page compilation of research prepared by successive Rules Law Clerks.^[15] The Committee’s decision to place TPLF back on the agenda at the October 2021 meeting was prompted, in large part, by a joint letter sent to the Committee by Senator Charles E. Grassley (R-IA) and Representative Darrell Issa (R-CA) in May 2021 requesting a status update on the TPLF disclosure issue.^[16] At the time of their May 2021 letter, Senator Grassley and Representative Issa had recently reintroduced the Litigation Funding Transparency Act (LFTA) of 2021 into
Congress. Very generally, the LFTA proposed disclosure of TPLF information and the TPLF agreement within the context of class action and MDL lawsuits.^[17]

While the Advisory Committee’s review in October 2021 was far more robust than their prior reviews, the Committee ultimately continued not to recommend any immediate action toward amending Rule 26 or TPLF disclosure in general.^[18]

In rejecting the call for a mandatory TPLF disclosure rule, the Advisory Committee outlined various reasons for their decision not to take steps toward establishing a formal TPLF disclosure rule. For example, the Advisory Committee, in part, seemed to question whether other rulemaking entities may be the more appropriate forums to address the issue, commenting that “[a]s information about the multitude of issues increases, it may be that one response is to conclude that this collection of issues is too diverse to be handled by a civil rule amendment. Another is to conclude that regulation of TPLF is best left to other entities, such as state legislatures, rather than individual federal judges.”^[19] In addition, the Advisory Committee dedicated several pages outlining a variety of different issues and questions it noted as “bearing on the Committee’s role” in considering TPLF disclosure rules. Very generally, for example, the Advisory Committee noted issues of “scope” in terms of which types of cases should be covered, the type of information to be disclosed, and how certain aspects of TPLF, such as portfolio funding, would be addressed.^[20] The Committee also discussed other items which could impact TPLF rulemaking including work product concerns, recent select court decisions, enforcement, defense litigation funding, federal courts as enforcer of professional responsibility rules and champerty and maintenance rules.^[21]

Taking these items into consideration, the Advisory Committee in October 2021 concluded that the “catalog of issues is hardly exhaustive but suggests the challenges that may lie ahead for rulemaking on this subject. As should be apparent, a very large amount of fact-gathering would be necessary to fashion a disclosure rule addressing TPLF.”^[22]

From the author’s research, since its detailed review of the TPLF issue in October 2021, the Advisory Committee has made only tangential reference to TPLF disclosure as part of its subsequent meetings. For example, as part of the Committee’s March 29, 2022 meeting, the Committee noted, without any further elaboration, that it had received a request for some type of TPLF disclosure pilot project.^[23] The Committee ultimately concluded that it was “agreed that TPLF is a big topic. It cannot be allowed to get away. Continued study will be important. But the time has not yet come to start drafting. The game now is to stay the course.”^[24] As part of the Committee’s October 12, 2022 meeting, it was noted that “a rule for disclosing third-party litigation funding was studied and also put aside.”^[25] The author did not see any references to TPLF as part of the Committee’s recent March 28, 2023 meeting.

Latest development --- industry groups renew their calls for a mandatory TPLF disclosure rule (May 8^th letter)

Against the above backdrop, the new letter from several industry groups to the Committee on Rules of Practice and Procedure dated May 8, 2023 (May 8^th letter) is the latest development as part of these larger on-going efforts to establish a federal TPLF disclosure rule.

As noted above, the May 8^th letter is signed by 35 industry groups.^[26] Like the prior efforts noted above, the May 8^th letter calls for a mandatory TPLF disclosure requirement to be added as part of Rule 26 outlined above. The signatories, as part of this letter, state that “we are writing in further support of the pending proposal to amend the Federal Rules of Civil Procedure to require disclosure of third-party litigation funding (“TPLF”) investment arrangements in any civil action filed in federal court.”^[27] Click here to see the full text of the proposal as contained in Exhibit B of the May 8^th letter.

The following outlines, generally, the arguments advanced by the signatories to the May 8^th letter in support of their renewed calls for a mandatory TPLF disclosure rule:

Alleged “mounting evidence” of funder control and influence over litigation

In their letter, the signatories express concerns that the funding industry’s narrative that funders are passive investors and have no influence or control over the course of litigation “has never been credible.”^[28] In this regard, the signatories assert that a pending legal dispute “involving one of the largest litigation funders” in the case Sysco Corp. v. Glaz LLC, No. 1:23-cv-01451 (N.D. Ill. Filed March 8, 2023) “now suggests that the narrative is in fact false, raising serious concerns about the veracity of [the funder’s] own public statements and reinforcing why requiring the production of funding agreements in all civil cases is critical to understanding who is controlling those actions.”^[29]

In relation to the Sysco case, it is alleged, in general, that Sysco, as part of its antitrust suits against various poultry and meat suppliers, filed a petition in that case to vacate an injunction issued by an arbitration panel “at [the litigation funder’s] behest” preventing Sysco from executing settlement deals with multiple defendants.^[30] The signatories allege that, according to the petition, a litigation funder is providing Sysco with “non-recourse capital” for its suits in exchange for a share of the proceeds of any future settlement or judgement.^[31] Further, it is alleged that the funder objected to Sysco’s attempts to settle and provide its customers with “a piece of the anti-trust claims.’”^[32] Further, it is alleged that once Sysco began receiving settlement offers it found to be unreasonable, the litigation funder allegedly sought to obstruct further settlement negotiations and allegedly instituted proceedings to enjoin future settlements, and that an arbitration panel granted an ex parte temporary restraining order in the funder’s favor.^[33]

Accordingly, the signatories assert that if these allegations are true, they “would contradict [the funder’s] repeated statements (some before [the Advisory Committee]) that it does not exercise any control or influence over lawsuits it finances. But more importantly, they prove precisely why a rule requiring disclosure and production of TPLF arrangements in civil litigation is necessary.”^[34] On this point, the signatories conclude that “[i]n short, the serious allegation raised in the Sysco case undermine then funding industry’s principal reason for opposing the underlying Rule 26 proposal and warrant the adoption of a uniform mandatory disclosure rule.”^[35] Further, it is alleged that the Sysco example “is not anomalous” and that the record before the Advisory Committee contains “numerous examples of TPLF agreements that grant the TPLF entity authority to control or influence aspects of funded litigation.”^[36]

TPLF has become an increasingly “entrenched element” of U.S. litigation, raising questions about potential manipulation of the U.S. Judicial System.

On this point, the signatories to the May 8^th letter first argue, in part, that the use of TPLF as a form of investment “has seeped into all facets of the American civil litigation system,” with funding amounts increasing and being used to fund “all kinds of civil litigation.”^[37] Further, it is alleged that the use of portfolio funding has increased since the Committee first considered the TPLF disclosure proposals.^[38] On this point, the signatories referenced sources indicating that estimated annual TPLF funding amounts could be in the range of $2.3 billion to $5 billion,^[39] while another recently placed the annual global funding estimate at approximately $17 billion.^[40]

In addition, the signatories express concerns that foreign actors are using TPLF to invest in the U.S. civil justice system and this raises the “possibility of foreign adversaries taking advantage of TPLF to compromise American interests inject[ing] yet another dimension into pending legal disputes unrelated to the actual merits of the suit.”^[41] As example, the signatories allege that “[a]ll signs indicate that this phenomenon is in fact occurring, as sovereign wealth funds (“SWFs”), state-owned and operated investment funds, are becoming increasingly involved in TPLF.”^[42] Further, the signatories allege that one funder has partnered with an undisclosed SWF “since at least 2018 and recently extended this partnership through 2023”^[43] while another funder allegedly has a relationship with an undisclosed SWF.^[44]

Further, in their letter the signatories express concerns, in part, that “some adversaries may see an opportunity to prolong litigation for economic or competitive reasons [and] may even seek to access confidential trade secret information for state purposes.”^[45] On this point, they allege that “[g]iven the patchwork of practices and rules relating to TPLF disclosure, unsuspecting judges require guidance on how to effectively account for the possibility of foreign adversaries using TPLF to exploit their courtrooms in ways to threaten U.S. national and economic security.”^[46] In this regard, the signatories note that Sen. John Kennedy (R-LA) recently sent a letter to Chief Justice John Roberts and U.S. Attorney General Merrick Garland highlighting these concerns recognizing that “’few safeguards exist in any form of law, rule, or regulation to prevent foreign adversaries from participating in civil litigation as an undisclosed third-party in our country’s federal courtrooms.’”^[47] As such, the signatories argue, in part, that “Judges have a right to know whether these non-merits-related interests are driving the litigation in their court rooms.”^[48]

Concluding their argument, the signatories state that “[i]n short, over the last several years, the U.S. has become the fulcrum of TPLF activity has become more sophisticated, and it appears to have been accompanied by expanded efforts by funders and possibility foreign actors. These developments all weigh in favor of making TPLF more transparent --- which is exactly what the pending Rule 26 disclosure proposal would accomplish.”^[49]

Disparate TPLF disclosure approaches demonstrate Judges need standardized guidance to steer their inquiries

Finally, the signatories to the May 8^th letter argue, in general, that adding the proposed TPLF disclosure provision to Rule 26 would solve the “checkerboard of disparate standards” that have developed because of different federal courts establishing their own local rules regarding TPLF disclosure, and ad-hoc judicial inquiries about TPLF.^[50]

As examples, in their letter the signatories discuss the different approaches reflected in the local rules issued by the United States District Court for New Jersey and the Northern District of California. In this regard, the signatories note that New Jersey’s rule requires each party to disclose, in general, the identity of each funder, state whether the funder’s approval is necessary for litigation and settlement decisions and requires a description of the nature of the financial interest.^[51] In addition, under New Jersey’s rule, parties may also be entitled to additional discovery regarding the details of TPLF agreements upon a showing of good cause.^[52] In contrast, it is noted that the local rule from the Northern District of California only requires parties to provide limited identifying information, has no provisions for additional discovery, and only applies to class, collective, and representative actions.^[53]

From another angle, the signatories assert that individual federal judges “are increasingly issuing orders or making informal inquiries about TPLF.”^[54] As an example, they note that recently Judge Yvonne Gonzalez Rogers of the U.S. District Court for the Northern District of California orally asked each attorney seeking a leadership position in the recently established social media addiction multidistrict litigation (“MDL”) proceeding to divulge in open court whether he or she is using (or plans to use) TPLF.^[55] Other examples cited include Chief Judge Colm Connolly of the U.S. District Court of the District of Delaware standing order requiring litigants to disclose whether their cases are being financed by TPLF, and whether there are any conditions tied to that funding (i.e., whether a funder’s approval for any litigation or settlement decisions is required),[56] and Judge Dan A, Polster of the United States District Court for the Northern District of Ohio required lawyer’s connected with federal opioid cases to disclose the existence of TPLF.^[57]

While the signatories note that these “local rules reflect a growing recognition of the importance of TPLF transparency, they … are inadequate.”^[58]Accordingly, the signatories argue, in part, that the “proposed amendment to Rule 26 would solve these problems by providing a clear and easy-to-implement disclosure requirement for TPLF” and that proposed amendment “would also ensure that funding agreements themselves are disclosed at the outset of a case – which none of the current rules or approaches requires as a matter of course.”^[59] In addition, the signatories argue that TPLF disclosure “will also help judges understand if foreign nationals or state actors are using the U.S. judicial system as an unwitting forum for achieving strategic (and perhaps nefarious) goals, including military and industrial espionage, and economic goals such as raising the costs of doing business for U.S. companies.”^[60] Concluding this point, the signatories to the May 8^th letter state: “[p]ut another way, although the disclosures set forth in the local rules and orders … are important steps in the right direction, they are not a substitute for production of the actual funding agreements.”^[61]

What’s next?

Going forward, we will now need to monitor if the May 8^th letter propels the Advisory Committee to revisit the issue of adding a mandatory TPLF disclosure provision to Rule 26 and, if so, if the Committee shows any signs of moving away from its historical reluctance to do so. From another angle, it will also be interesting to see if the Litigation Funding Transparency Act is re-introduced into Congress. Likewise, we will need watch whether the proposed TPLF disclosure provision contained in the recently introduced Highway Accident Fairness Act of 2023 (H.R. 2936) is ultimately enacted into law.

Questions and other resources

The author will continue to monitor developments on this front and provide updates as warranted. In the interim, feel free to contact the author if you have any questions. Also, click here to review the author’s other TPLF articles.

[1] Regarding the Advisory Committee, according to U.S. Courts.gov, the U.S. Supreme Court first established this committee in June 1935 to help draft the Federal Rules of Civil Procedure, which took effect in 1938. Presently, this source reflects that Advisory Committees on the Rules of Appellate, Bankruptcy, Civil, Criminal Procedure, and the Rules of Evidence carry on a continuous study of the rules and recommend changes to the Judicial Conference through a Standing Committee on Rules of Practice and Procedure.

[2] See generally, Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 11.

[3] Id.

[4] See generally, Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 2-10.

[5] See e.g., Lisa A. Rickard, President, U.S. Chamber Institute for Legal Reform letter to Mr. Jonathan C. Rose, Secretary of the Committee on Rules of Practice and Procedure of the Administrative Office of the United States Courts (April 9, 2014) and Lisa A. Rickard, President, U.S. Chamber Institute for Legal Reform letter to Ms. Rebecca A. Wolmeldorf, Secretary of the Committee on Rules of Practice and Procedure of the Administrative Office of the United States Courts (June 1, 2017).

Regarding Federal Rule of Civil Procedure Rule 26, this rule is entitled: Duty to Disclose; General Provisions Governing Discovery. Section (a)(1)(A) of this rule currently states as follows:

(a) Required Disclosures.

(1) Initial Disclosure.

(A) In General. Except as exempted by Rule 26(a)(1)(B) or as otherwise stipulated or ordered by the court, a party must, without awaiting a discovery request, provide to the other parties:

(i) the name and, if known, the address and telephone number of each individual likely to have discoverable information--along with the subjects of that information--that the disclosing party may use to support its claims or defenses, unless the use would be solely for impeachment;

(ii) a copy--or a description by category and location--of all documents, electronically stored information, and tangible things that the disclosing party has in its possession, custody, or control and may use to support its claims or defenses, unless the use would be solely for impeachment;

(iii) a computation of each category of damages claimed by the disclosing party--who must also make available for inspection and copying as under Rule 34 the documents or other evidentiary material, unless privileged or protected from disclosure, on which each computation is based, including materials bearing on the nature and extent of injuries suffered; and

(iv) for inspection and copying as under Rule 34, any insurance agreement under which an insurance business may be liable to satisfy all or part of a possible judgment in the action or to indemnify or reimburse for payments made to satisfy the judgment.

The ILR (with support from other industry groups) is seeking to amend Rule 26 by adding a new subsection (v) to Rule 26(a)(1)(A) to require automatic disclosure in all civil cases of: “[A]ny agreement under which any person, other than attorney permitted to charge a contingent fee representing a party, has a right to receive compensation that is contingent on, and sourced from, any proceeds of the civil action, by settlement, judgment or otherwise.” Advisory Committee on Civil Rules Booklet, October 5, 2021, at 375.

[6] See n. 5.

[7] See, Lisa A. Rickard, President, U.S. Chamber Institute for Legal Reform letter to Mr. Jonathan C. Rose, Secretary of the Committee on Rules of Practice and Procedure of the Administrative Office of the United States Courts (April 9, 2014), Lisa A. Rickard, President, U.S. Chamber Institute for Legal Reform letter to Ms. Rebecca A. Wolmeldorf, Secretary of the Committee on Rules of Practice and Procedure of the Administrative Office of the United States Courts (June 1, 2017), and Advisory Committee on Civil Rules Booklet, October 5, 2021, at 375.

[8] Lisa A. Rickard, President, U.S. Chamber Institute for Legal Reform letter to Ms. Rebecca A. Wolmeldorf, Secretary of the Committee on Rules of Practice and Procedure of the Administrative Office of the United States Courts (June 1, 2017), at 358, 365, 366, 368, 371, 372, 374 and 378, as contained in the Advisory Committee on Civil Rules Booklet, November 7, 2017. In addition to these arguments, ILR , as part of the October 30-31, 2014 Advisory Committee Meeting, also offered the following four reasons why Rule 26 should be amended to require TPLF disclosure: (1) enabling courts and counsel to ensure compliance with ethical obligations; (2) alerting defendants to who is “really on the other side of an action; (3) facilitating resolution of motions for cost-shifting; and (4) information bearing on sanctions. Advisory Committee on Civil Rules Booklet, October 30-31, 2014, at 118-122 and 123-128.

In addition to these arguments presented by the ILR, it is noted that 30 general counsel from different insurance companies and other corporations submitted a letter to the Advisory Committee in January 2019 supporting ILR’s efforts to amend Rule 26. In this letter, these representatives argued, in part, that “[w]e believe the reasons for requiring full disclosure are strong and well documented … When litigation funders invest in a lawsuit, they buy a piece of the case; they effectively become real parties in interest. Defendants (and the courts) have a right to know who has a stake in a lawsuit and to assess whether they are using illegal or unethical means to bring an action. Further, in assessing discovery proportionality and addressing settlement possibilities, both the court and the defendant need to know who is sitting on the other side of the table --- is it an impecunious individual seeking recourse based on the merits of his/her case or is there also a multi-million-dollar litigation funder driven by the need to satisfy investor expectations?” Brackett B. Dennison, III, Former Senior Vice President and General Counsel, et. al. letter to Ms. Rebecca A. Wolmeldorf, Secretary of the Committee on Rules of Practice and Procedure of the Administrative Office of the United States Courts (January 31, 2019) at 265, as contained in the Advisory Committee on Civil Rules Booklet, April 2-3, 2019.

[9] Kathleen L. Nastri, President American Association for Justice letter to Ms. Rebecca A. Wolmeldorf, Secretary of the Committee on Rules of Practice and Procedure of the Administrative Office of the United States Courts (January 17, 2018), at 234, as contained in the Advisory Committee on Civil Rules Booklet, April 10, 2018.

[10] Id at 232-236.

[11] Id. at 237. In addition to the arguments presented by the AAJ, it is noted that representatives from three third-party litigation funders submitted a letter to the Advisory Committee in February 2019 in response (and opposition) to ILR’s efforts to amend Rule 26. In part, these commentators argued that the Chamber’s proposal ignored the relevance requirement which it termed as the “backbone of discoverability” under the Federal Rules and ignored that federal courts “can easily handle discovery issues relating to litigation financing under existing Rule 26 and/or their own inherent authority.” Eric H. Blinderman, Chief Executive Officer (U.S.), Therium Capital Management, et. al. letter to Ms. Rebecca A. Wolmeldorf, Secretary of the Committee on Rules of Practice and Procedure of the Administrative Office of the United States Courts (February 20, 2019), at 270-71, as contained in the Advisory Committee on Civil Rules Booklet, April 2-3, 2019.

A separate letter from another third-party funding company was also submitted to the Committee in February 2019 challenging the ILR’s efforts. In this letter, the submitter rejected as “simply false” the ILR’s allegation that the business community does not use litigation financing, noting that he was personally aware of companies and other entities using third party financing – including, allegedly, some of the companies that were signatories to the January 31, 2019 letter submitted to the Committee advocating for TPLF disclosure as discussed in n. 8 above. Christopher P. Bogart, Chief Executive Officer, Buford Capital, LLC letter to Ms. Rebecca A. Wolmeldorf, Secretary of the Committee on Rules of Practice and Procedure of the Administrative Office of the United States Courts (February 20, 2019), at 273-74, as contained in the Advisory Committee on Civil Rules Booklet, April 2-3, 2019. It is noted that Mr. Bogart also submitted a lengthy response challenging the ILR’s ’s efforts on many fronts in his letter to the Committee as part of the Advisory Committee’s November 7, 2017 meeting. See, Christopher P. Bogart, Chief Executive Officer, Buford Capital, LLC letter to Ms. Rebecca A. Wolmeldorf, Secretary of the Committee on Rules of Practice and Procedure of the Administrative Office of the United States Courts (September 1, 2017), at 391-410, as contained in the Advisory Committee on Civil Rules Booklet, November 7, 2017.

[12] To provide historical context, since the ILR first submitted its proposal in 2014, the Advisory Committee has basically elected to monitor and study TPLF developments to evaluate possible rulemaking in this area. On this point, the Committee noted that when they first considered TPLF disclosure in 2014, they “concluded that the field was changing rapidly and that not enough was known about it to support adding a disclosure requirement, and also that there were other questions about the wisdom of doing so. Advisory Committee on Civil Rules Booklet, October 5, 2021, at 371. Thereafter, the TPLF disclosure issue was assigned to the Committee’s Multi-District Litigation (MDL) Subcommittee with the Committee noting at that time “it appeared that [TPLF] might be of particular importance in some MDL litigation.” Id. at 190. However, after about two years of study, the MDL Subcommittee reported back to the Committee in conjunction with October 2019 meeting that TPLF “did not seem particularly prominent” in the MDL context and that “further work on a possible rule would be suspended, but that the evolution of TPLF would be monitored going forward, not with a primary focus on MDL proceedings but with regard to all civil litigation.”[xii] As such, the Advisory Committee decided to remove TPLF from the subcommittee’s agenda and return it back to the full Committee for continued monitoring. Id. at 26.

[13] Advisory Committee on Civil Rules Booklet, October 29, 2019, at 190.

[14] Id. at 372. See also, Advisory Committee on Civil Rules Booklet, October 29, 2019, at 190-191 and Advisory Committee on Civil Rules Booklet, April 1, 2020, at 145.

[15] Advisory Committee on Civil Rules Booklet, January 4, 2022, at 190.

[16] Senator Charles E. Grassley’s and Representative Darrell Issa’s letter to The Honorable John D. Bates, Chairman Committee on Rules of Practice and Procedure of the Judicial Conference of the United States, dated May 3, 2021, as contained within the Advisory Committee’s Booklet, October 5, 2021, at 397.

[17] The Litigation Funding Transparency Act of 2021 was introduced in the House as H.R. 2025 and in the Senate as S. 840 on March 18, 2021. These bills proposed to amend Chapter 114 of title 28, United States Code. As noted above, the LFTA proposed TPLF disclosure in relation to class action suits and MDL actions.

In terms of disclosure, the LFTA contained the following proposals:

Sec. 2 Transparency and Oversight of Third-Party Litigation Funding in Class Actions

(a) In General. Chapter 114 of title 28, United States Code, is amended by adding at the end the following:

Sec. 1716. Third-party litigation funding disclosure

(a) In General. In any class action, class counsel shall-

(1) disclose in writing to the court and all other named parties to the class action the identity of any commercial enterprise, other than a class member or class counsel of record, that has a right to receive payment that is contingent on the receipt of monetary relief in the class action by settlement, judgment, or otherwise; and

(2) produce for inspection and copying, except as otherwise stipulated or ordered by the court, any agreement creating the contingent right.

(b) Timing. The disclosure required by subsection (a) shall be made not later than the later of-

(1) 10 days after execution of any agreement described in subsection (a)(2); or

(2) the time of service of the action.’

(b) Technical and Conforming Amendment. The table of sections for chapter 114 of title 28, United States Code, is amended by adding at the end the following: 1716. Third-part litigation funding disclosure.

Sec. 3 Transparency and Oversight of Third-Party Litigation Funding in Multidistrict Litigation

Section 1407 of title 28, United States Code is amended

(1) by redesignating subsections (g) and (h) as subsections (h) and (i), respectively; and

(2) by inserting after subsection (f) the following:

(g)(1) In any coordinated or consolidated pretrial proceedings conducted pursuant to this section, counsel for a party asserting a claim whose civil action is assigned to or directly filed in the proceedings shall-

(A) disclose in writing to the court and all other parties the identity of any commercial enterprise, other than the named parties or counsel, that has a right to receive payment that is contingent on the receipt of monetary relief in the civil action by settlement, judgment, or otherwise; and

(B) produce for inspection and copying, except as otherwise stipulated or ordered by the court, any agreement creating the contingent right.

(2) The disclosure required by paragraph (1) shall be made not later than the later of-

(A) 10 days after execution of any agreement described in paragraph (1)(B); or

(B) the time the civil action becomes subject to this section.

[18] On this point, the Advisory Committee stated:

This memorandum does not recommend any immediate action but provides an opportunity for Committee members to address these issues. The agenda book therefore contains a rather expansive treatment of this topic to acquaint Advisory Committee members with the issues, should the Committee be interested in proceeding at this time. If not, it is expected that the Committee will continue to monitor developments. It is likely that further information can be brought to bear. If the decision at present is to continue monitoring TPLF developments, there is no present need … to delve deeply into these issues. But moving forward likely will present them. (Advisory Committee on Civil Rules, October 5, 2021, at 371).

[19] Advisory Committee on Civil Rules, October 5, 2021, at 371.

[20] See, Advisory Committee on Civil Rules, October 5, 2021 booklet, at 379-381. The Committee examines the above noted questions and issues in more detail in pages 379-381 of its October 5, 2021 booklet as noted immediately above. The author also outlined these points in more detail as part of his November 2021 article Federal rules committee recommends no immediate action for third-party funding disclosure rulemaking at recent meeting, see the section titled “The Advisory Committee discusses issues and challenges in creating TPLF disclosure rules.”

[21] Advisory Committee on Civil Rules Booklet, October 5, 2021, at 381-86.

[22] Advisory Committee on Civil Rules Booklet, October 5, 2021, at 386.

[23] Advisory Committee on Civil Rules Booklet, March 29, 2022, at 112.

[24] Id. at 114.

[25] Advisory Committee on Civil Rules Booklet, October 12, 2022, at 114.

[26] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 11 and Appendix A – Summary of Signatory Organizations, at 12-17.

[27] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 2. In terms of the “pending proposals," the signatories state as follows in footnote 2 in their letter: “That proposal – an amendment to Fed. R. Civ. P. 26(a)(1)(A) – was offered by most of the undersigned parties by letter to this Committee dated June 1, 2017 (Document No. 17-CV-O), as supplemented by letter dated November 3, 2017 (Document No. 17-CV-GGGGGG.” Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 2, fn. 2.

[28] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 2.

[29] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 2.

[30] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 2, citing Petition to Vacate Arbitration Award, Sysco Corp. v. Glaz LLC, No. 1:23-cv-01451 (N.D. Ill. filed Mar. 8, 2023), ECF No. 1.

[31] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 2, citing Petition to Vacate Arbitration Award, Sysco Corp. v. Glaz LLC, No. 1:23-cv-01451 (N.D. Ill. filed Mar. 8, 2023), ECF No. 1, ¶ 20.

[32] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 2, citing Am. Petition to Vacate Arbitration Award ¶ 40, Sysco Corp. v. Glaz LLC, No. 1:23-cv-01451 (N.D. Ill. filed Mar. 20, 2023), ECF No. 18.

[33] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 2-3, citing Am. Petition to Vacate Arbitration Award ¶ 41-58, Sysco Corp. v. Glaz LLC, No. 1:23-cv-01451 (N.D. Ill. filed Mar. 20, 2023), ECF No. 18.

[34] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 3.

In relation to the allegations regarding the funder’s prior statements, the signatories cite the following references in footnote 11 of the May 8^th letter:

See, e.g., https://www.burfordcapital.com/insights/insights-container/common-sense-vs-false-narratives-about-litigation-finance-disclosure/ (“Insurers set limits upon settlement outcomes and thus often control litigation- related decision-making for the defendants they insure, something that providers of commercial litigation finance do not do. In litigation finance as it is practiced in the U.S., control remains with the client.”) (emphasis added); (“We act as passive investors and do not control strategy or settlement decision-making, and our capital is almost always provided as a non-recourse investment, shifting risk from the firm to Burford.”) (emphasis added); https://www.burfordcapital.com/insights/insights- container/byline-pli-legal-finance-post-covid/ (“If the matter wins, they can expect a meaningful share of the remaining damages, and if it loses, they keep any capital advanced, locking in a minimum outcome. In both scenarios, the company maintains control of its litigation—and considerably more control over its finances.”) (emphasis added); https://www.burfordcapital.com/insights/legal-finance-101/ (“Reported use of legal finance—also called litigation finance or litigation funding—has doubled in recent years, as companies and law firms increasingly recognize the benefits of gaining better control over legal budgets and risk without ceding control of litigation decision-making or settlement”) (emphasis added); https://www.burfordcapital.com/insights/insights- container/how-do-law-firms-use-portfolio-finance/ (“the use of legal finance generally does not alter control of decision-making or attorney-client relationships. Burford makes a portfolio deal directly with the firm, but Burford’s role is that of a passive investor. Therefore, Burford does not control the litigation or settlement strategy and decision-making, except when agreed to by our client”) (emphasis added); https://www.sec.gov/Archives/edgar/data/1714174/000110465920081137/filename1.htm (“Unlike in our legal finance business, where we are financing a client who retains decision-making authority in the litigation.... ”) (emphasis added by the signatories). Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 3, fn. 11.

[35] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 3.

[36] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 3.

In support of this assertion, the signatories state the following in footnote 13 of the May 8^th letter:

For example, the elaborate funding agreement utilized by Burford in class action litigation against Chevron “provide[d] control to the Funders” through the “installment of ‘Nominated Lawyers’” – lawyers “selected by the Claimants with the Funder’s approval.” Maya Steinitz, The Litigation Finance Contract, 54 Wm. & Mary L. Rev. 455, 472 (2012) (emphasis added). Similarly, in Boling v. Prospect Funding Holdings, LLC, the U.S. Court of Appeals for the Sixth Circuit concluded that the terms of the funding agreements involved in that matter “effectively g[a]ve [the TPLF entity] substantial control over the litigation,” including terms that “may interfere with or discourage settlement” and otherwise “raise[d] quite reasonable concerns about whether a plaintiff can truly operate independently in litigation.” 771 F. App’x 562, 579-80 (6th Cir. 2019). In a lawsuit filed in 2018, a TPLF entity affirmatively asserted that it had the contractual right to exercise control over the litigation in which it had invested by, inter alia, requiring that specified counsel (who had an existing relationship with the TPLF company) serve as one of the plaintiff’s counsel in the funded lawsuit. See Compl. ¶ 35, White Lilly, LLC v. Balestriere PLLC, No. 1:18-cv-12404 (S.D.N.Y. filed Dec. 31, 2018). And in Gbarabe v. Chevron Corp., the funding agreement contained several key provisions that suggested the funder’s desire to influence the course of the litigation, including one prohibiting the lawyers from engaging any co-counsel or experts without the funder’s consent. Litigation Funding Agreement, § 1.1, Gbarabe v. Chevron Corp., No. 14-cv-00173-SI, Dkt. No. 1864 (N.D. Cal. filed Sept. 16, 2016). Id. at 3-4, fn. 13 (emphasis in original). Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 3-4, fn. 13.

[37] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 4-5..

[38] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 6.

[39] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 4, citing Mark Popolizio, Third-party litigation funding in 2022 – three issues for your radar, Verisk, Jan. 31, 2022 (citing Considerations from the ABA’s Best Practices for Litigation Funding, The National Law Review, Volume XI, Number 151 (Feb. 16, 2021); David H. Levitt & Francis H. Brown III, Third Party Litigation Funding: Civil Justice and the Need for Transparency, DRI Center for Law and Public Policy (2018), at 1)).

[40] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 4, citing Thomas Holzheu et al., U.S. Litigation Funding and Social Inflation: the Rising Costs of Legal Liability, at 3, Swiss Re Institute (Dec. 2021).

[41] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 6.

[42] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 6, citing https://www.gao.gov/assets/gao-23-105210.pdf., at 10 & n.24.

[43] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 6, citing See https://www.burfordcapital.com/shareholders/announcements-container/burford-extends-life-of- sovereign-wealth-fund-arrangement-and-comments-on-fund-management-business/.

[44] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 6, citing https://www.law.com/americanlawyer/2019/03/25/therium-announces-430m-fund-pushing-investments- past-1-billion/.

[45] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 6.

[46] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 6.

[47] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 6, citing U.S. Senator John Kennedy, Kennedy urges Roberts, Garland to take action to protect national security from foreign actors meddling in U.S. courts (Jan. 9, 2022), https://www.kennedy.senate.gov/public/press- releases?ID=1FBC312C-94B8-409B-B0A3-859A9F35B9F5

[48] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 6.

[49] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 7.

[50] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 9.

[51] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 9, citing D.N.J. L. Civ. R. 7.1.1(a).

For the reader’s convenience, New Jersey’s local rule D.N.J. L. Civ. R. 7.1.1(a) states in full as follows:

Civ. Rule 7.1.1 Disclosure of Third–Party Litigation Funding

(a) Within 30 days of filing an initial pleading or transfer of the matter to this district, including the removal of a state action, or promptly after learning of the information to be disclosed, all parties, including intervening parties, shall file a statement (separate from any pleading) containing the following information regarding any person or entity that is not a party and is providing funding for some or all of the attorneys’ fees and expenses for the litigation on a non-recourse basis in exchange for (1) a contingent financial interest based upon the results of the litigation or (2) a non-monetary result that is not in the nature of a personal or bank loan, or insurance:

The identity of the funder(s), including the name, address, and if a legal entity, its place of formation;

Whether the funder’s approval is necessary for litigation decisions or settlement decisions in the action and if the answer is in the affirmative, the nature of the terms and conditions relating to that approval; and

A brief description of the nature of the financial interest.

(b) The parties may seek additional discovery of the terms of any such agreement upon a showing of good cause that the non-party has authority to make material litigation decisions or settlement decisions, the interests of parties or the class (if applicable) are not being promoted or protected, or conflicts of interest exist, or such other disclosure is necessary to any issue in the case.

(c) Nothing herein precludes the Court from ordering such other relief as may be appropriate.

(d) This Rule shall take effect immediately and apply to all pending cases upon its effective date, with the filing mandated in Paragraph 1 to be made within 45 days of the effective date of this Rule.

[52] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 9.

[53] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 9.

For the reader’s convenience, Paragraph 19 of the Northern District of California’s standing order, referenced as U.S.Dist.Ct.Rules N.D.Cal., Attachment C. Standing Order for All Judges of the Northern District of California--Contents of Joint Case Management Statement, states as follows:

Disclosure of Non-party Interested Entities or Persons: Whether each party has filed the “Certification of Interested Entities or Persons” required by Civil Local Rule 3-15. In addition, each party must restate in the case management statement the contents of its certification by identifying any persons, firms, partnerships, corporations (including parent corporations) or other entities known by the party to have either: (i) a financial interest in the subject matter in controversy or in a party to the proceeding; or (ii) any other kind of interest that could be substantially affected by the outcome of the proceeding.

Local Rule 3-15, cited as U.S.Dist.Ct.Rules N.D. Cal., Civil L.R. 3-15, provides, in part, that “upon making a first appearance in any proceeding in this Court, each party must file with the Clerk a ‘Certification of Interested Entities or Persons’” which “must disclose any persons, associations of persons, firms, partnerships, corporations (including parent corporations), or other entities other than the parties themselves known by the party to have either: (i) a financial interest of any kind in the subject matter in controversy or in a party to the proceeding; or (ii) any other kind of interest that could be substantially affected by the outcome of the proceeding.” Further, this rule provides that “[i]f a party has no disclosure to make pursuant to subparagraph (a)(1), that party must make a certification stating that no such interest is known other than that of the named parties to the action. A party has a continuing duty to supplement its certification if an entity becomes interested within the meaning of section (1) during the pendency of the proceeding.” This rule does not apply to governmental entities or its agencies.

[54] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 7.

[55] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 7, citing Hr’g Tr. 12:21-24, In re Soc. Media Adolescent Addiction/Pers. Injury Prods. Liab. Litig., MDL No. 3047 (N.D. Cal. Nov. 9, 2022) (“I want to know explicitly whether you use [TPLF] or intend to use it in this case.”).

[56] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 7, citing Standing Order Regarding Third-Party Litigation Funding Arrangements, https://www.ded.uscourts.gov/sites/ded/files/Standing%20Order%20Regarding%20Third- Party%20Litigation%20Funding.pdf. Notably, plaintiffs in multiple patent cases pending before Judge Connolly have challenged the standing order by filing a series of virtually identical petitions for a writ of mandamus with the U.S. Court of Appeals for the Federal Circuit. The Federal Circuit denied each of the petitions, signaling that the standing order will remain in effect for the foreseeable future. See In re Nimitz Techs. LLC, No. 2023-103, 2022 WL 17494845, at *3 (Fed. Cir. Dec. 8, 2022).

[57] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 8, citing In re Nat’l Prescription Opiate Litig., No. 1:17-MD-2804, 2018 WL 2127807, at *1 (N.D. Ohio May 7, 2018).

[58] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 8.

Although not specifically referenced in the May 8^th letter, the author notes that a well-researched memorandum prepared for the Advisory Committee’s April 2018 meeting noted that, as of late 2017, six U.S. Courts of Appeals and 24 out of the 94 federal district courts had, as of the date of the memorandum, formulated local rules requiring identification of litigation funders, with these rules differing in terms of the cases to which the rules apply, the scope of information to be provided, the reasons for disclosure, as well as when and how this information must be disclosed. See, Patrick A. Tighe, Survey of Federal and State Disclosure Rules Regarding Litigation Funding, February 7, 2018, at 210, as contained in the Advisory Committee on Civil Rules Booklet, April 10, 2018.

As contained in Appendix A of Mr. Tighe’s survey, the following U.S. Circuit Court of Appeals were noted to have local courts rules regarding disclosure of TPLF finance arrangements, with the scope and type of disclosure varying by circuit: “Third Circuit (3^rd Cir. L.R. 26.1.1(b); Fourth Circuit (4^th Cir. L.R. 26.1(2)(B); Fifth Circuit (5^th Cir. L.R. 28.2.1); Sixth Circuit (6^th Cir. L.R. 26.1(b)(2)); Tenth Circuit (10^th Cir. L.R. 46.1(D)); and Eleventh Circuit (11^th Cir. L.R. 26.1-1(a)(1); 11^th Cir. L.R. 26.1-2(a).” See, Patrick A. Tighe, Survey of Federal and State Disclosure Rules Regarding Litigation Funding, February 7, 2018, at 220, as contained in the Advisory Committee on Civil Rules Booklet, April 10, 2018.

As contained in Appendix B of Mr. Tighe’s survey, the following U.S. District Courts were noted to have local district court rules regarding disclosure of TPLF finance arrangements, with the scope and type of disclosure varying by district: “Arizona (no local rule, but corporate disclosure statement); C.D. California (C.D. L.R. 7.1-1); N.D. of California (N.D. Cal. L.R. 3-15; Standing Order for All Judges of the N.D. Cal (1/17/2017); M.D. Florida (Interested Persons Order for Civil Cases 6/14/2013, only applies to some judges; no local rule or order applicable to all district court judges); N.D. Georgia (N.D. Ga. L.3.3); S.D. Georgia (S.D. Ga. L.R. 7.1); N.D. Iowa (N.D. Iowa L.R. 7.1); S.D. Iowa (S.D. Iowa L.R. 7.1); Maryland (M.D. L.R. 103.3(b)); E.D. Michigan (E.D. Mich. L.R. 83.4); W.D. Michigan (Form-Corporate Disclosure Statement; No local rule order); Nevada (Nev. L.R. 7.1-1);E.D. North Carolina (E.D. N.C. L.R. 7.3); M.D. North Carolina (Form-Disclosure of Corporate Affiliations; No local rule order); W.D. North Carolina (Form-Entities with a Direct Financial Interest in Litigation Form, No local rule or order); N.D. Ohio (N.D. Ohio L. Civ. R. 3.13(b); Form – Corporate Disclosure Statement); S.D. Ohio (S.D. Ohio L.R. 7.1); E.D. Oklahoma (Form-Corporate Disclosure Statement, No local rule order); N.D. Oklahoma (Form-Corporate Disclosure Statement; No local rule or order); N.D. Texas (N.D. Tex. L.R. 3.1(c), 3.2(c), 7.4, 81.1); W.D. Texas (W.D. Tex. L.R. CV-33); W.D. Virginia (Form-Disclosure of Corporate Affiliations and Other Entities with a Direct Financial Interest in Litigation; No local rule order); and W.D. Wisconsin (Form-Disclosure of Corporate Affiliations and Financial Interest; No local rule or order).”

See, Patrick A. Tighe, Survey of Federal and State Disclosure Rules Regarding Litigation Funding, February 7, 2018, at 223-229, as contained in the Advisory Committee on Civil Rules Booklet, April 10, 2018.

Notably, however, per Mr. Tighe’s survey, of these local rules reportedly require the production of the litigation funding agreement itself. Further, these rules have reportedly focused more on TPLF disclosure for the purposes of helping courts assess potential judicial recusal or disqualification issues, rather than providing defendants with third-party funding information as part of litigation discovery. See, Patrick A. Tighe, Survey of Federal and State Disclosure Rules Regarding Litigation Funding, February 7, 2018, as contained in the Advisory Committee on Civil Rules Booklet, April 10, 2018.

[59] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 9-10.

[60] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 10.

[61] Letter to H. Thomas Byron III, Secretary, Committee on Rules of Practice and Procedure, re: Fed. R. Civ. P. 26(a)(1)(A)(v), dated May 8, 2023, at 10.