Sen. Thom Tillis’s (R-NC) newly-introduced legislation to “target predatory litigation funding practices” would undermine a “critical tool in our fight against woke capitalism,” according to the United States’ oldest consumer protection agency.
The “Tackling Predatory Litigation Funding Act,” introduced last week, would impose a new tax on profits earned by third-party entities that finance civil litigation, and it would “curb predatory practices in the litigation funding industry,” a statement from Tillis’s office reads.
One of the most well-known examples of third-party litigation funding (TPLF) came when Forbes broke the news in 2016 that billionaire PayPal co-founder Peter Thiel had been secretly funding a lawsuit that professional wrestler Hulk Hogan filed against Gawker Media for publishing a sex tape without his permission — a move Thiel made in retaliation after the website outed him as gay in 2007.
The Thiel-bankrolled lawsuit ended in victory for Hogan when the jury awarded him $115 million in compensatory damages and $25 million in punitive damages, leading to Gawker Media’s bankruptcy and subsequent dissolution.
Gawker founder Nick Denton told NPR at the time, “It’s harder now for journalists to do stories about billionaires, like Peter Thiel, without having at the back of their minds the fear that maybe somebody deep-pocketed, you know, with unlimited resources is going to come after us and can my organization afford to defend me?”
While TPLF by foreign entities originally came from Australia before growing roots in Europe, the U.S. Chamber of Commerce reports that the phenomenon has spread to the U.S., calling it a “risk to national security.”
According to Tillis, “predatory” TPLF allows outside funders, including foreign entities, to “profit off our legal system, driving up costs and delaying justice.”
“This legislation will bring much-needed transparency and accountability by taxing these profits and deterring abusive practices that undermine the integrity of our courts,” he added.
A companion bill has been introduced in the House of Representatives By Rep. Kevin Hern (R-OK), who stated, “Foreign entities shouldn’t be allowed to meddle tax-free in the American legal system.”
“Frivolous lawsuits have gotten out of control in recent years, largely because of these third-party funders fueling a market that is ballooning,” he continued. “Taxing these third-party entities will limit unmeritorious lawsuits and provide economic relief to the middle class.”
Will Hild, executive director of Consumers First, is sounding the alarm on the potential “disastrous” consequences despite Tillis’s “good” intentions:
According to the nonprofit group, the legislation would “further empower large, woke corporations” like BlackRock, Bank of America, and Nationwide to “crush the little guy and force their far-left agenda onto America.”
“It would rob everyday Americans of a fundamental tool in fighting back,” Hild wrote in a thread on X:
He continued, “We’ve seen countless examples of woke corporations discriminating against those who don’t fall in line with their radical political agenda — from debanking to DEI-driven discrimination — these corporations feel as if they can act with impunity, because traditionally the average consumer/employee has little means to fight back.”
“Litigation financing evens the playing field,” Hild argued. “Where previously large corporations with deep pockets were confident they could crush the little guy and drown them in legal fees, litigation financing helps everyday Americans fight back.”
In an additional statement to Breitbart News, Hild said it is “imperative that we remain vigilant against such legislative actions that could erode the safeguards protecting American consumers from the far left woke agenda.”
O.H. Skinner, the executive director of Alliance for Consumers, concurred in a statement to Breitbart News:
The last thing consumers need right now is Congress carrying the torch for woke companies and the left’s machine of activists by wading into the litigation finance issue. Litigation financing is one of the key tools available to consumers, small businesses, and everyday people in the fight against political activism and large, detached organizations, law firms, and corporations. Indeed, consumers and conservatives are finally holding the woke CEOs of international mega-corporations and their left-wing allies to account for an endless series of violations, including in the courtroom. It isn’t surprising then that the response from Congress is to roll out efforts that would advantage large corporations and the largest, richest left-wing law firms and personal injury lawyers, who happen to spend a lot of their time and effort pushing political activism in their hallways, in the courtroom, and in the boardroom, while also shoveling vast sums into political donations. The last thing we should be doing is boosting the biggest billboard lawyers and woke companies. Without the ability for everyday consumers to find ways to mount defenses against these companies and law firms, consumers will continue to be punching bags as the Left and their allies impose Progressive Lifestyle Choices without a counterweight.
Pro-free market nonprofit Heartland Impact also weighed in, formally withdrawing their support from the proposed bill in a letter to Senate Majority Leader John Thune (R-SD) and House Speaker Mike Johnson (R-LA):
Olivia Rondeau is a politics reporter for Breitbart News based in Washington, DC. Find her on X/Twitter and Instagram.
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