More Than 200 Companies Urge Federal Rules Committee to Require Disclosure of Litigation Funders

A coalition of 214 companies and organizations sent a letter on September 14 to Carolyn A. Dubay, Secretary of the Committee on Rules of Practice and Procedure at the Administrative Office of the United States Courts, urging the Advisory Committee on Civil Rules to amend the Federal Rules of Civil Procedure (FRCP) to require disclosure of nonparty litigation funders in federal civil litigation. Signatories included Amazon, Google, Microsoft, ExxonMobil, Meta, Ford, Anthropic, OpenAI, numerous insurers, pharmaceutical firms, and manufacturers.

The letter said courts, litigants, and the public currently have no way to identify nonparty funders who participate in litigation and share in judgments on what the group described as a “clandestine basis.” The Federal Rules already require disclosure of several categories of financial interest, including the real party in interest under Rule 17, corporate ownership of 10% or more under Rule 7.1, and insurance agreements under Rule 26(a)(1)(A)(iv). The letter argued that the absence of a similar disclosure requirement for third-party litigation funding (TPLF) was therefore inexplicable.

According to the letter, TPLF contracts often give funders a share of judgments and settlements and a basis to influence or control litigation and settlement decisions. It cited an examination by Lawyers for Civil Justice (LCJ) finding that some funders have begun acknowledging the capacity to control the litigation they finance after years of denying it. The group of signatories reiterated language from an earlier 2024 letter on the same issue, which argued: “We cannot make informed decisions without knowing the stakeholders who control the litigation, and we cannot understand the control features of a TPLF agreement without reading the agreement.”

The letter also pointed to a growing pattern of judges requesting information about funding arrangements in large multidistrict litigation (MDL) proceedings, class actions, patent cases, and many federal district courts and individual judges that have adopted local rules or standing orders addressing nonparty funding disclosure. The group said this patchwork approach confuses for courts and litigants, enables forum shopping, and runs counter to the Advisory Committee’s mandate to provide uniform procedures.

The letter rejected proposals that would limit disclosure to an ex parte basis, meaning disclosure to the court alone. “There are no secret disclosures in the Federal Rules,” the letter stated, noting that existing disclosure requirements for real parties in interest, corporate ownership, insurance agreements, and amicus curiae filings are all available to every party and to the public.

The group endorsed a specific rule proposal that Lawyers for Civil Justice and the U.S. Chamber of Commerce Institute for Legal Reform (ILR) submitted to the Advisory Committee on March 10. That proposal would amend Rule 26(a)(1)(A) to require disclosure of “the name, address, and telephone number of any nonparty individual or entity (other than counsel of record) that, whether directly or indirectly, is providing funding for the action and has a financial interest therein and, for inspection and copying as under Rule 34, any agreements or other documentation concerning the terms of the funding.” The letter noted that the Subcommittee’s most recent status reports do not appear to have considered that proposal, despite it having been pending before the committee since March.

The companies’ efforts follow separate legislative efforts to curb TPLF. In January, the House Judiciary Committee debated the Protecting Third Party Litigation Funding (TPLF) From Abuse Act, introduced by Representative Darrell Issa (R-CA), which would have required disclosure of third-party litigation funding sources in most civil actions. That bill did not reach a vote after committee members recessed for floor votes. The Inventors Defense Alliance strongly opposed the bill at the time, arguing that mandatory disclosure would expose sensitive legal strategies and could chill investment in litigation finance that some inventors rely on to pursue infringement claims against larger companies.

The September 14 letter urged the Advisory Committee to “draft and propose a straightforward, uniform rule for disclosure of nonparty litigation funding contracts,” stating that such a rule would give courts, litigants, and the public information critical to managing cases and maintaining judicial integrity. The signatories recommended that the committee adopt the pending LCJ and ILR proposal rather than draft new rule language.

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