A Republican-led bill in the House of Representatives, the Litigation Transparency Act of 2025 (HR 1109), aims to increase transparency in civil litigation by requiring parties receiving payments in lawsuits to disclose their identities. However, the proposal has drawn criticism from conservative groups who argue it could infringe on privacy rights, chill free speech, and limit access to justice for Americans.
The Tea Party Patriots Action, among other conservative organizations, has urged the House Judiciary Committee to reject HR 1109, which was introduced by Reps. Darrell Issa, Scott Fitzgerald, and Mike Collins. The bill’s critics warn that its sweeping disclosure mandates could threaten American principles of privacy and freedom of speech. In a letter signed by over a dozen conservative groups, including America First Legal and the Heartland Institute, the letter warns that the bill’s forced disclosure mandates could chill free speech and association, especially for political, religious, and nonprofit groups relying on outside support to pursue legal action.
Republican Rep. Darrell Issa has clarified that the bill does not aim to overturn legal precedents like NAACP v. Alabama that protect donor anonymity for nonprofits. He emphasized that the legislation seeks to disclose only those who are funding lawsuits, without requiring the full disclosure of private financial arrangements. Issa pointed out that the bill does not require disclosure of individual donors of nonprofits, only that any material funder of a lawsuit be identified.
Proponents of the bill, such as the U.S. Chamber of Commerce, argue that the legislation is a vital step towards ensuring that the legal system remains a tool for justice rather than a playground for hidden financial interests. They believe that the current legal system suffers from abuse by undisclosed third-party interests, which can distort the free market and stifle innovation. The bill aims to address cases where civil suits are funded by undisclosed investors, such as hedge funds, commercial lenders, and sovereign wealth funds through shell companies.
The debate over the legislation has reignited an ongoing conflict between insurers and large corporations, which argue that third-party funding drives abusive lawsuits and inflated settlements. Advocacy-oriented nonprofits and legal networks, on the other hand, argue that litigation finance is essential for individuals and organizations without deep pockets to challenge well-funded corporations. These groups often use structured litigation vehicles, limited liability companies, or legal defense trusts to fund lawsuits, and they are reimbursed only if the case succeeds.
Organizations such as Consumers’ Research, which uses litigation finance to push back against “woke capitalism,” have viewed the legislation as an attack on one of the few tools available to hold powerful corporations accountable. The letter from conservative groups also warns that the compelled disclosure of private financial arrangements could force litigants to expose donor identities, violating privacy rights and exposing individuals to potential harassment or retaliation.
Legal commentators and advocacy groups have raised concerns about the potential risks to First Amendment rights. In a recent op-ed, Alliance Defending Freedom founder Alan Sears warned that forced disclosure of private associations could undermine fundamental freedoms, citing Supreme Court decisions that affirm the protection of private associations. Rep. Fitzgerald has reiterated that Congress’ intent is to protect the First Amendment rights of political and religious groups, in line with the Supreme Court’s opinion in Citizens’ United.
Some supporters of the bill, including the High Tech Investors Alliance, argue that the legislation is necessary to protect American businesses from the exploitation of courts by foreign adversaries, such as China. They claim that the lack of transparency has allowed shell entities to manipulate the legal system for economic gain, which they believe contradicts the broader goal of protecting American interests.
The House Judiciary Committee has yet to hold a markup for the bill, with the next scheduled session planned for Thursday at 12 p.m. As the debate continues, the legislation highlights a significant tension between transparency in legal proceedings and the protection of individual rights, with both sides presenting compelling arguments about the role of transparency in civil litigation.