Relating to the required disclosure of certain financial relationships in civil actions regarding the activities of United States defense contractors.

New funding disclosures in defense contractor lawsuits

People and entities bringing Texas civil cases about defense contractors’ activities face new funding disclosure rules. The rules apply even when the contractor is not a party. Covered contractors make or provide defense articles or services to the U.S. Defense Department under federal arms export rules. Claimants must report whether they or their lawyers received direct or indirect financial support from sources linked to sanctioned or embargoed nations. They must name each source during the initial disclosures required by Texas court Rule 194. The covered nations are those subject to Arms Export Control Act restrictions, as determined by the U.S. State Department. Disclosures must be sworn and filed with the court. Updates are due within 10 days after claimants or their lawyers receive covered money or identify a funding source. Privilege or other exemptions cannot delay, exclude, or block disclosure. Courts cannot limit these disclosures to protect confidential or proprietary funding information. Courts can pause a case until disclosure occurs. For willful noncompliance, courts can dismiss it permanently, in addition to other available penalties. The law covers cases pending in trial court on its effective date and cases filed afterward. Its effective-date rule sets immediate effect with approval by two-thirds of all elected members of each legislative chamber; otherwise, September 1, 2025.