This Act prohibits foreign states and sovereign wealth funds from funding U.S. litigation unless they are a party, and mandates disclosure of all foreign third-party litigation funding in civil actions.
Ben Cline
Representative
VA-6
This Act prohibits foreign states and sovereign wealth funds from funding U.S. civil litigation where they are not a party. It mandates strict disclosure requirements for any foreign third-party litigation funding in federal cases. Failure to comply can result in the dismissal of the case and other sanctions. The Attorney General must also report annually to Congress on the use of such foreign funding.
New Court Rules Prohibit Foreign State Funding of U.S. Lawsuits and Mandate Strict Disclosure of Foreign Money
The Protecting Our Courts from Foreign Manipulation Act of 2025 makes it illegal for foreign governments and their sovereign wealth funds to bankroll civil lawsuits in the U.S. if they aren't a named party in the case. Under Section 2, the bill also requires any person or lawyer involved in a federal civil case to disclose in writing if they are receiving money from any foreign entity to fund their litigation. This isn't just a suggestion; failing to report these funds can lead to a case being dismissed 'with prejudice'—meaning it’s gone for good—and the court can even set aside final judgments if they find out later that prohibited foreign cash was used to win.
The End of Secret Foreign Backing
Think of this like a 'Know Your Funder' rule for the courtroom. Currently, a foreign government could theoretically fund a massive patent lawsuit against a U.S. tech company or a trade dispute without ever putting their name on the paperwork. This bill shuts that down by making any such funding agreements null and void. It specifically targets 'sovereign wealth funds'—state-owned investment funds like those in Norway, China, or Saudi Arabia—prohibiting them from providing direct or indirect support for lawsuits where they aren't listed as a plaintiff or defendant. For a small business owner caught in a legal battle, this means their opponent can't be secretly subsidized by a foreign treasury to outspend them into submission.
Paperwork and Privacy in the Legal Trenches
The bill introduces a heavy dose of transparency that hits lawyers and litigants directly in their to-do lists. Within 30 days of receiving foreign money or filing a case, parties must file a sworn declaration under penalty of perjury disclosing the funder’s name, address, and citizenship (SEC. 2). This applies to anyone who is a 'foreign person'—defined as anyone who isn't a U.S. citizen or permanent resident. While this helps flag potential foreign influence, it also adds a layer of administrative work. For a startup or an individual with international investors, this means extra legal fees and the risk of having sensitive funding details shared with the Attorney General and the National Security division.
Retroactive Reach and Real-World Risks
One of the most significant parts of this bill is its 'Applicability' clause (SEC. 4). It doesn't just apply to future lawsuits; it hits cases that are already pending the moment it becomes law. If a legal team is currently relying on foreign third-party funding to keep a complex, multi-year case alive, they have 30 days to disclose it or risk getting their case tossed. While the goal is to protect the integrity of U.S. courts, the broad definition of 'monetary support' could create a grey area. For example, if a foreign-owned parent company provides a loan to its U.S. subsidiary to cover legal costs, is that 'indirect support'? These are the types of questions that could lead to a wave of new motions and delays as courts figure out exactly where the line is drawn.