Here are a couple of recent favorable developments concerning the effort to require public disclosure of p-side third-party litigation funding to the same extent as defendants must disclose relevant insurance coverage.  In addition to litigation-related benefits, such disclosure would (unfortunately) benefit plaintiffs by allowing them to shop for the best terms (as one can with insurance), rather than essentially have to take what they are offered in the current utterly opaque market.

The first development is yet another startling pre-trial order from the Depo-Provera MDL.  In In re Depo-Provera (Depot Medroxyprogesterone Acetate) Products Liability Litigation, No. 3:25-md-3140, 2025 WL 1860996 (N.D. Fla. July 1, 2025), the court imposed what we believe is the first general TPLF disclosure in an MDL.  It’s not 100% what the defense would desire, but it is a big step in the right direction.  As we pointed out in our prior Depo-Provera post about that MDL’s early vetting order, this MDL is being overseen by the same judge who was badly burned in a prior non-drug/device MDL that went pear-shaped largely due a flood of meritless claims that so bloated that litigation that it once accounted for 25% of all active federal court cases.

The decision recounted how, in MDLs, TPLF adversely impacts both plaintiffs and defendants:

For at least the past decade, multidistrict litigations (“MDLs”) have attracted the attention of third-party litigation funding entities, some with ill motives aimed at preying on litigants.  Typically, third-party litigation funding is provided in exchange for an interest in the settlement recovery or on credit, often with exorbitant fees and rates of interest. . . .  [S]uch funding is not only expensive for participants, but it also could create conflicts of interest between plaintiffs and their attorneys and may improperly deter plaintiffs from accepting a settlement offer because they may want to make up the amount they will be forced to repay the funder.

TPLF Disclosure Order, 2025 WL 1860996, at *1 (footnote, citations and quotation marks omitted).  To prevent “exploit[ation] by predatory lending practices,” this order requires disclosure of all TPLF even in “the absence of a disclosure requirement in the Federal Rules” as “necessary and appropriate” in the context of that “particular case.”  Id. at *1 & n.2 (citing, inter alia, Civil Rules Committee material finding “broad agreement that judges can require disclosure in cases in which that seems warranted”).

Thus, every plaintiff in the Depo-Provera MDL, whether or not represented by counsel, will have to disclose his or her TPLF (if any) within thirty (30) days, with disclosure being an ongoing obligation.  Id. at *1 & n.3.  The disclosure includes:

• Plaintiff’s name;
• the name, address, and telephone number of the lender;
• the date(s) on which all loans were made;
• the total amount of funding received by the Plaintiff;
• the fees and rate(s) of interest on any funds lent; and
• all other material terms of the funding arrangement.

TPLF Disclosure Order, 2025 WL 1860996, at *2.  Critically, the agreements themselves must also be disclosed:

[Plaintiffs] must also attach to the declaration true and correct copies of all related loan documents, including without limitation all lending or financing agreements, security agreements, and financial disclosures.

Id.

That’s the good part.  The not-so-good part is that everything still remains hidden from the world at large − which is bizarre since the best, and probably only, way to combat the “exorbitant fees and rates of interest” that the decision decries is to make all agreements public, and therefore allow informed consumer choice to create competition.  But no, the order insists on maintaining secrecy and opacity.  The disclosures are to be filed “under seal” and any TPLF discussions will occur “in camera.”  Id.  So we’re still three steps forward and two steps back.  TPLF disclosure won’t be meaningful until it is real disclosure.

Still with the Depo-Provera TPLF Disclosure Order, the principle that TPLF disclosure is applicable to MDLs is established, and hopefully we can build on it.

Second, there has been additional movement towards a federal rule governing TPLF disclosure. The Federal Civil Rules Committee’s TPLF subcommittee, recently concluded that “TPLF has gained prominence” and “the amount of such funding seems to be growing rather rapidly.”  TPLF section of April 2025 Civil Rules Agenda Book, at p. 270.  Thus, the subcommittee did some serious thinking and identified the following TPLF questions that “need[ed] answers”:

• “How does one describe in a rule the arrangements that trigger a disclosure obligation?”  Should “commonplace arrangements” like law-firm “bank lines of credit” be excluded.
• “Is this [TPLF] problem limited to certain kinds of litigation,” such “mass tort”/MDL and “patent infringement” litigation?
• Is TPLF “ a vehicle for malign foreign interests to harm this country, or at least hobble American companies when they compete for business abroad.”
• Should a disclosure rule “focus . . . on ‘big dollar’ funding” which can “run to millions of dollars?”  Or are what we call “payday” litigation funders with their astronomical interest rates a proper target?
• “Does funding prompt the filing of unsupported claims?”  How much vetting do litigation funders really require?
• Extending disclosure to “inventory funding,” a “new version” of TPLF that “permits the funder to acquire an interest in multiple lawsuits” and operates in “uncertain” ways.
• “If some disclosure is required, what should be disclosed, and to whom should it be disclosed? The original proposal called for disclosure of the underlying agreement and all underlying documentation.  But if funders insist on candid and complete disclosure regarding the strengths and weaknesses of the cases on which lawyers seek funding, core work product protections would often seem to be involved.”
• “Will requiring some disclosure lead to time-consuming discovery forays that distract from the merits of the underlying cases?”
• “What is the court to do with the information disclosed if disclosure is required?”  Must courts “undertake a deep dive into the lawyer-client relationship to make certain the lawyers are behaving” ethically?
• Does “a responsibility to monitor the lawyers’ compliance with their professional obligations” arise “when settlement is possible?
• “Should judges . . . be concerned that settlement decisions are controlled by funders whose involvement is not known to the court?”

We consider this a favorable development.  With this degree of attention to detail, it seems that the subcommittee is moving from whether a TPLF disclosure rule is needed at all to the nuts and bolts of what such a rule should address.  We’re still a long way away from the finish line, but it increasingly looks like the participants are running in the right direction.