HR-2675-119
Placed on the Union Calendar, Calendar No. 608.
Sponsored by Ben Cline (R-VA)
What it does
This bill would add a new section to federal law (28 U.S.C. § 1660) that does two things. First, it would ban foreign governments and sovereign wealth funds from financially backing civil lawsuits in U.S. federal courts in which they are not a named party, and would void any agreements that route such money through intermediaries. Second, it would require all parties in any federal civil case to disclose — under penalty of perjury — whether any foreign person, foreign government, or sovereign wealth fund is funding the litigation or has a right to share in any proceeds, with copies going to the court, opposing parties, the Attorney General, and the Principal Deputy Assistant Attorney General for National Security. Cases found to have used prohibited foreign-state funding could be dismissed with prejudice. The Attorney General would also be required to submit annual reports to Congress on foreign litigation funding activity in federal courts.
Who benefits
U.S. defendants in civil litigation who may currently face foreign-state-backed plaintiffs without knowing it. Domestic businesses and individuals targeted by lawsuits that could be influenced by foreign government interests. The U.S. national security apparatus, which would gain visibility into foreign involvement in federal courts. Domestic litigation funders who compete with foreign-backed funders. Congress, which would receive annual intelligence on foreign litigation activity. Courts, which would have clearer information about financial interests behind cases.
Who is hurt
Plaintiffs — including U.S. citizens — who currently rely on third-party litigation funding that may be sourced, even indirectly, from foreign entities, and who could have their cases dismissed. Litigation funding firms with international capital structures, including those that pool funds from foreign investors, who may be unable to fund U.S. cases. Law firms that use portfolio-based funding arrangements with international backers. Foreign investors in litigation finance funds who would be excluded from this market. Plaintiffs with legitimate claims who cannot afford litigation without third-party funding and whose funders have foreign ties. Civil rights and public interest organizations that receive international funding and use it for litigation.
Supporters argue
Supporters argue that foreign governments and sovereign wealth funds — including those of adversarial nations — can currently finance U.S. civil litigation anonymously, using it as a tool to harass American companies, extract sensitive information through discovery, or advance geopolitical goals through the court system. They contend that the bill closes a genuine national security gap: unlike foreign lobbying (covered by FARA) or foreign campaign contributions (covered by FEC rules), foreign litigation funding has no federal disclosure requirement. The bill's disclosure provisions, they argue, impose no burden on legitimate plaintiffs — only transparency — while the outright ban is narrowly targeted at foreign states and sovereign wealth funds, not private foreign investors.
Opponents argue
Opponents argue that the bill's broad definition of "indirect" foreign sourcing could sweep in plaintiffs whose funders have any foreign capital exposure — including pension funds or investment vehicles with international shareholders — effectively denying access to courts for litigants with entirely legitimate claims. They contend that dismissal with prejudice is a severe remedy that punishes plaintiffs for their funders' financial structures, which plaintiffs may not fully know or control. Critics also argue the bill could disproportionately affect civil rights organizations and public interest litigants who receive international philanthropic support, chilling enforcement of U.S. law by reducing the pool of available litigation financing.