Litigation Funding Transparency Act of 2026
Sponsored By: Senator Sen. Grassley, Chuck [R-IA]
Introduced
Summary
Mandatory disclosure of third-party litigation funding in major civil cases. This bill would require parties and lawyers to identify and produce funding agreements when a commercial, foreign, or sovereign backer supports class actions, multidistrict litigation, or coordinated cases with 100 or more related suits.
Show full summary
- Parties and counsel: Would have to disclose the identity of any third-party funder, say whether the funder is a foreign state, foreign person, or sovereign wealth fund, and produce funding agreements to the court and other named parties within 10 days of the agreement or at service. They must supplement or correct disclosures if they become incomplete.
- Courts and public oversight: The Administrative Office of the U.S. Courts would receive copies of those disclosures and publish public reports every 120 days naming listed foreign funders, the case caption and docket number, the court, and amounts provided. Reports go to Congress and Department of Justice national security officials.
- Litigation integrity and discovery: Funders would be barred from directing strategy or settlement decisions and from accessing protected discovery unless a court allows it. Courts could use contempt powers and civil procedure sanctions for violations.
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Bill Overview
Analyzed Economic Effects
3 provisions identified: 0 benefits, 0 costs, 3 mixed.
Limits on funder control and access
If enacted, the bill would prohibit third‑party funders from directing litigation strategy, decision‑making, or settlement negotiations in covered cases. It would bar funders and their agents from obtaining discovery materials that a court places under a protective order unless the court explicitly authorizes access. Courts could treat the disclosure duty as a Rule 26(a) duty, use Rule 37 sanctions for failures to disclose, and hold violators in contempt while exercising district judge powers to enforce orders.
New disclosure and public reports
If enacted, parties or their lawyers in covered actions would have to tell the court and all named parties the identity of any third‑party funder, say if it is a foreign state or controlled by foreign actors, and produce funding agreements for inspection unless the court orders otherwise. Disclosures would be due no later than the later of 10 days after signing the agreement or when the action is served or filed, and must be corrected or supplemented if materially incomplete. Where foreign or controlled status is disclosed, copies would be sent to the Administrative Office of the U.S. Courts. The Administrative Office would post a public report within 180 days of enactment and then every 120 days listing identified funders, case captions, docket numbers, courts, and amounts provided in the prior 120 days.
Who counts as a litigation funder
If enacted, the bill would define who counts as a third‑party litigation funder and what lawsuits are "covered civil actions." Covered actions would include MDLs under 28 U.S.C. 1407, any class action, and consolidated district dockets with at least 100 civil actions. The bill would exclude funding that only repays loan principal, repays principal plus interest limited to the greater of 10% or three times the prior year's average 30‑year Treasury yield, or reimburses counsel. The rules would apply to cases pending on the date of enactment and to cases filed afterward.
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Sponsors & CoSponsors
Sponsor
Sen. Grassley, Chuck [R-IA]
IA • R
Cosponsors
Sen. Tillis, Thomas [R-NC]
NC • R
Sponsored 2/11/2026
Sen. Kennedy, John [R-LA]
LA • R
Sponsored 2/11/2026
Sen. Cornyn, John [R-TX]
TX • R
Sponsored 2/11/2026
Roll Call Votes
No roll call votes available for this bill.
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