H.R. 2675 targets the practice of foreign entities secretly funding lawsuits in U.S. federal courts. The bill outright bans foreign governments and sovereign wealth funds from financially backing civil lawsuits they are not directly party to, and voids any such funding arrangements while requiring courts to dismiss cases that relied on this prohibited money. It also creates new disclosure requirements: parties and their lawyers in federal civil lawsuits must reveal to the court, opposing parties, and the Justice Department any foreign person, government, or sovereign wealth fund providing financial support for the litigation or holding a stake in its outcome, with deadlines of 30 days after such funding begins or when the case is filed. Failure to comply with these disclosure rules can result in court sanctions similar to other litigation misconduct penalties. The Attorney General must report annually to Congress on foreign litigation funding activity, including who is funding cases, how much money is involved, and what kinds of lawsuits are affected. These changes would apply to lawsuits already underway as well as new cases filed after the law takes effect, primarily affecting large-scale litigation, class actions, and cases where outside investors fund lawsuits in exchange for a cut of any winnings.
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