Louisiana Bill SB 355 (text linked) was adopted by the state Senate on May 31 and signed by the Speaker of the House yesterday, June 2. Sponsored by State Senators Jeremy Stine (R) and Valarie Hodges (R) now heads to Governor Jeff Landry (R) for signature. It is not clear whether the governor will sign.
The bill would do two major things: require "foreign" litigation funders to disclose to the Louisiana Attorney General the name, address, citizenship or country of incorporation of any "foreign" entity that "right to receive or obligation to make any payment that is contingent on the outcome of the civil action" as well as any such entity "that has received or is entitled to receive proprietary information or information affecting national security interests obtained as a result of the funding agreement" within 30 days of execution of a funding agreement or the date a funded litigation is filed. Importantly, the term "foreign is highly restricted and is limited to foreign governments listed in 15 CFR 7.4. This includes the People's Republic of China including Hong Kong, Cuba, Iran, North Korea, Russia, and the Maduro Regime of Venezuela. Given that little litigation funding is coming out of Cuba and North Korea, this is likely not a big deal. Although Purplevine IP has been disclosed as funding patent cases against Samsung in the US, this is currently an exception. In any case, Purplevine IP would have to disclose under SB 355.
The larger impact would come from the second part of the bill, which mandates that any litigation funder (not just "foreign" funders) "shall not decide, influence, or direct the party or the party's attorney with respect to the conduct of the underlying civil proceeding or any settlement or resolution of the civil proceeding, or make any decision [ ]. The right to make these decisions remains solely with the party and the party's attorney in the civil proceeding." Additionally, the bill makes the existence of a litigation funding agreement subject to discovery in all civil actions. Note that SB 355 only makes "the existence of" a funding agreement discoverable. It does not appear to make the actual agreement itself discoverable.
Ultimately, unless you are Purplevine IP or Kim Jung Un, no one will really care about the requirement to reveal ownership. And although the vast majority of funding agreements mandate that the funding cannot control the litigation or settlement, having a state mandate this is a little overreaching. Luckily, it's Louisiana this time, but if we don't watch out, it could be Texas or California next. A federal bill was filed in 2023 by Sens. John Kennedy (R-La.) and Joe Manchin (I-WV), and House Speaker Mike Johnson (R-La.), but it has not moved and is considered a long shot in a deeply divided Congress.
This is a warning shot that the folks that have market power and money are coming to curtail litigation finance in the name of disclosure. Call your elected officials and let them know that you want basic fairness and common sense, not BigTech and rich oligarchs like Jeff Bezos and Mark Zuckerberg, to affect basic rights.
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