Litigation Funding Transparency Act of 2021

II 117TH CONGRESS 1ST SESSION S. 840 To amend title 28, United States Code, to increase transparency and oversight of third-party litigation funding in certain actions, and for other purposes. IN THE SENATE OF THE UNITED STATES MARCH 18, 2021 Mr. GRASSLEY (for himself, Mr. CORNYN, Mr. TILLIS, and Mr. SASSE) intro- duced the following bill; which was read twice and referred to the Com- mittee on the Judiciary A BILL To amend title 28, United States Code, to increase trans- parency and oversight of third-party litigation funding in certain actions, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Litigation Funding 4 Transparency Act of 2021’’. 5 VerDate Sep 11 2014 23:30 Apr 03, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S840.IS S840 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 840 IS SEC. 2. TRANSPARENCY AND OVERSIGHT OF THIRD-PARTY 1 LITIGATION FUNDING IN CLASS ACTIONS. 2 (a) IN GENERAL.—Chapter 114 of title 28, United 3 States Code, is amended by adding at the end the fol- 4 lowing: 5 ‘‘§ 1716. Third-party litigation funding disclosure 6 ‘‘(a) IN GENERAL.—In any class action, class counsel 7 shall— 8 ‘‘(1) disclose in writing to the court and all 9 other named parties to the class action the identity 10 of any commercial enterprise, other than a class 11 member or class counsel of record, that has a right 12 to receive payment that is contingent on the receipt 13 of monetary relief in the class action by settlement, 14 judgment, or otherwise; and 15 ‘‘(2) produce for inspection and copying, except 16 as otherwise stipulated or ordered by the court, any 17 agreement creating the contingent right. 18 ‘‘(b) TIMING.—The disclosure required by subsection 19 (a) shall be made not later than the later of— 20 ‘‘(1) 10 days after execution of any agreement 21 described in subsection (a)(2); or 22 ‘‘(2) the time of service of the action.’’. 23 (b) TECHNICAL AND CONFORMING AMENDMENT.— 24 The table of sections for chapter 114 of title 28, United 25 VerDate Sep 11 2014 23:30 Apr 03, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S840.IS S840 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 840 IS States Code, is amended by adding at the end the fol- 1 lowing: 2 ‘‘1716. Third-party litigation funding disclosure.’’. SEC. 3. TRANSPARENCY AND OVERSIGHT OF THIRD-PARTY 3 LITIGATION FUNDING IN MULTIDISTRICT 4 LITIGATION. 5 Section 1407 of title 28, United States Code, is 6 amended— 7 (1) by redesignating subsections (g) and (h) as 8 subsections (h) and (i), respectively; and 9 (2) by inserting after subsection (f) the fol- 10 lowing: 11 ‘‘(g)(1) In any coordinated or consolidated pretrial 12 proceedings conducted pursuant to this section, counsel 13 for a party asserting a claim whose civil action is assigned 14 to or directly filed in the proceedings shall— 15 ‘‘(A) disclose in writing to the court and all 16 other parties the identity of any commercial enter- 17 prise, other than the named parties or counsel, that 18 has a right to receive payment that is contingent on 19 the receipt of monetary relief in the civil action by 20 settlement, judgment, or otherwise; and 21 ‘‘(B) produce for inspection and copying, except 22 as otherwise stipulated or ordered by the court, any 23 agreement creating the contingent right. 24 VerDate Sep 11 2014 23:30 Apr 03, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S840.IS S840 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 840 IS ‘‘(2) The disclosure required by paragraph (1) shall 1 be made not later than the later of— 2 ‘‘(A) 10 days after execution of any agreement 3 described in paragraph (1)(B); or 4 ‘‘(B) the time the civil action becomes subject 5 to this section.’’. 6 SEC. 4. APPLICABILITY. 7 The amendments made by this Act shall apply to any 8 case pending on or commenced after the date of the enact- 9 ment of this Act. 10 Æ VerDate Sep 11 2014 23:30 Apr 03, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\S840.IS S840 pbinns on DSKJLVW7X2PROD with BILLS