{"database": "press", "table": "releases", "rows": [["https://www.tillis.senate.gov/2025/6/wsj-editorial-highlights-tillis-bill-to-end-predatory-litigation-funding-practices", "WSJ Editorial Highlights Tillis Bill to End Predatory Litigation Funding Practices", "2025-06-05", "2025", "2025-06", "Republican", "Senate", "NC", "Thom Tillis", "T000476", "www.tillis.senate.gov", "tillis", "https://www.tillis.senate.gov/press-releases", "scraper", "WASHINGTON, D.C. \u2013 Yesterday, The Wall Street Journal published an editorial supporting the Tackling Predatory Litigation Funding Act, legislation introduced by Senator Thom Tillis (R-NC) which would impose a new tax on profits earned by third-party entities that finance civil litigation and curb predatory practices in the litigation funding industry.\n\nRead the full op-ed here or below.\n\nEnding a Tax Break for Lawsuits\n\nWSJ\n\nJune 4, 2025\n\nWhy are foreign investment funds that finance predatory lawsuits against U.S. companies allowed to dodge taxes on their legal payouts? Good question, and now North Carolina Sen. Thom Tillis and Oklahoma Rep. Kevin Hern are seeking to close this anti-growth loophole.\n\nThird-party litigation financing has exploded in recent years as private investment funds chase high returns goosed by America\u2019s tort-friendly legal system. Investors give law firms money to recruit plaintiffs and file often meritless lawsuits against companies in return for a share of the eventual settlement or judgment.\n\nAnnual returns average about 25% thanks to jackpot jury verdicts, which also create an incentive for businesses to settle claims early to avoid costly, drawn-out litigation. In 2023, 39 investors had committed some $15.2 billion in capital to U.S. commercial litigation, according to the litigation finance advisory firm Westfleet Advisors.\n\nInvestment funds such as Fortress Investment Group have financed major mass torts, including Roundup fertilizer claims against Bayer AG and talc litigation against Johnson & Johnson. Fortress, which is majority owned by an Abu Dhabi sovereign wealth fund, has also harassed Apple and Intel with dubious patent lawsuits.\n\nThird-party financing arrangements with law firms are typically not required to be disclosed, so foreign investors could be funding lawsuits with the goal of harming U.S. businesses that may be competitors. Bloomberg Law last year detailed how Russian oligarchs had dodged sanctions by funding lawsuits in the U.S.\n\nHere\u2019s the kicker: Foreign investors in U.S. litigation don\u2019t have to pay tax on lawsuit proceeds because the tax code exempts foreigners from paying U.S. capital-gains tax, and their legal payouts are treated as capital gains. American litigation funders pay tax at the capital gains rate (23.8%), while the actual plaintiffs in lawsuits pay at the ordinary income rate.\n\nThe preferential tax treatment for funders, especially foreigners, is an incentive to plow money into lawsuits rather than business investment that creates jobs, boosts productivity and improves living standards. Lawsuits do the opposite. Costs of defending against litigation get passed along to workers, consumers and shareholders.\n\nEnter Messrs. Tillis and Hern, who are seeking to add a provision to the current tax bill that would require U.S. and foreign litigation funders to pay tax on their earnings at the ordinary income rate (typically 37%), plus a 3.8% surcharge. This could discourage excessive litigation, which the U.S. Chamber of Commerce says costs U.S. households some $4,200 each in 2022.\n\nWill Hild of the right-leaning outfit Consumers\u2019 Research recently tweeted that the Tillis-Hern provision would \u201crob everyday Americans of a fundamental tool in fighting back\u201d against \u201clarge, woke corporations.\u201d This is a giant red herring. The provision wouldn\u2019t ban third-party funding lawsuits. It would merely eliminate a tax break for them.\n\nExcessive litigation is a tax on everyday Americans, which is why Republican Governors like Georgia\u2019s Brian Kemp and Florida\u2019s Ron DeSantis have championed tort reform. Oklahoma Gov. Kevin Stitt last week signed legislation that will ban lawsuit funding from entities controlled by foreign adversaries and cap non-economic damages in personal injury suits at $500,000.\n\nThe plaintiffs lobby has the Senate votes to block national tort reform with a 60-vote filibuster. But Republicans only need 51 votes in their reconciliation bill to ensure that the tax code doesn\u2019t give the Abu Dhabi wealth fund a tax break for funding lawsuits that harm America.\n\n###", 1, "2026-03-30T01:40:41Z", "2026-04-06T18:34:38Z"]], "columns": ["url", "title", "date", "year", "month", "party", "chamber", "state", "member_name", "bioguide_id", "domain", "scraper", "source", "date_source", "text", "has_text", "collected_at", "updated_at"], "primary_keys": ["url"], "primary_key_values": ["https://www.tillis.senate.gov/2025/6/wsj-editorial-highlights-tillis-bill-to-end-predatory-litigation-funding-practices"], "units": {}, "query_ms": 0.7756638806313276, "source": "dwillis/congress-press", "source_url": "https://github.com/dwillis/congress-press", "license": "MIT", "license_url": "https://github.com/dwillis/congress-press/blob/main/LICENSE"}