IN RE NIMITZ TECHNOLOGIES LLC - 12/10/22
Lawyers for Civil Justice successfully urged the Federal Circuit Court of Appeals to uphold a U.S. district judge’s standing order requiring disclosure of third-party litigation funding agreements. The decision is an important milestone in support of third-party litigation disclosure in federal courts.
LCJ and the US Chamber jointly argue in their brief that such orders are important because they:
Shed light on who is controlling the litigation and whether the litigation is being pursued for a proper purpose.
Reduce potential conflicts of interest in litigation for the courts, given that some funders are publicly traded or may be comprised of elaborate funding networks.
Allow the courts to evaluate settlement prospects more accurately and better calibrate resolution initiatives.
Unearth potential threats to U.S. national and economic security to the extent cases are funded by foreign money. Courts need to know whether their courtrooms are being used for improper purposes.
The decision In Re Nimitz Technologies LLC resulted from a mandamus petition filed by a plaintiff who was ordered to disclose any TPLF arrangements pursuant to the standing order issued by Chief Judge Colm Connolly of the US District Court for the District of Delaware. Petitioner argued that the issuance of the order was an abuse of discretion and sought to vacate the specific order in the case and the judge’s standing order requiring TPLF disclosure in all of his cases. The Federal Circuit Court of Appeals rejected the petition for mandamus in an order filed on December 8, 2022.
Petitioner contended that the judge’s standing order would force it to turn over “highly confidential litigation-related information, including materials protected by the attorney client privilege and work-product immunity.
The court of appeals rejected petitioner’s argument, making it clear that the district court order “does not require the party to docket these records or otherwise make them public” and is “free to submit and to publicly file at the time of its production of the records in question an assertion that the records are covered by the attorney-client privilege and/or work product doctrine and a request that for that reason (and perhaps other reasons) the Court maintain the records under seal.”
The amicus brief in Nimitz and two related cases were prepared by Darryl Joseffer and Jennifer Dickey of the US Chamber Litigation Center on behalf of the Chamber and LCJ. The Nimitz brief is here.
The court of appeals decision in Nimitz upholding the TPLF disclosure standing order follows two recent federal rules proposals by LCJ to improve TPLF transparency. LCJ and the U.S. Chamber’s Institute for Legal Reform propose an amendment to FRCP 16(c)(2) to encourage disclosure of TPLF arrangements at pre-trial conferences and LCJ proposes an amendment to FRAP 26.1 to require TPLF disclosure in federal appellate proceedings. The TPLF proposals are available at Our Initiatives/Disclosure Third-Party Litigation Funding.