Conservative activists have repeatedly prevailed at the Supreme Court in recent years. They've helped put an end to affirmative action in college admissions, expand Second Amendment rights, and protect religious liberty.
But now, some in Washington want to take away the financial lifeline that enables those conservative activists—along with many small business owners—to have their day in court. And alarmingly, the threat is coming not from Democrats, but from Republicans.
Nearly two dozen House Republicans, led by Rep. Ben Cline (VA-6), are pushing ahead with the Protecting Our Courts From Foreign Manipulation Act. The bill would impose lengthy new disclosure requirements in any lawsuit where the plaintiff—the person or business filing the suit—is relying on outside financing.
Supporters claim they're trying to prevent China, Russia, or other hostile governments from secretly funding lawsuits designed to harass American companies in U.S. courts.
Unfortunately, the bill won't accomplish that objective. It would, however, harm conservatives fighting for religious liberty, students challenging discriminatory admissions policies, homeowners battling overzealous regulators, and small business owners facing a years-long legal fight against a Fortune 100 company.
Why? Because lawsuits are notoriously expensive. Challenging a powerful institution—whether it's a government agency or a Big Tech company—in a high-stakes legal duel can routinely cost millions of dollars and take years to resolve. Most Americans cannot afford that burden on their own.
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Fortunately, ordinary citizens and small business owners don't need to.
Conservative advocacy groups frequently provide legal support free of charge. Many attorneys work on a contingency basis, collecting a fee only if they win. And in recent years, activists and small businesses have increasingly turned to "third-party litigation" funders—firms that finance years of costly litigation in exchange for a share of any eventual recovery.
Consider the case of Jack Phillips, who lost 40 percent of his income after refusing to design a custom wedding cake celebrating gay marriage. Faced with years of litigation from Colorado's Civil Rights Commission, Phillips could have easily been forced to surrender—his business bankrupted and his religious freedom trampled. Instead, he fought all the way to the Supreme Court and won a landmark victory for First Amendment rights.
His success wouldn't have been possible without Alliance Defending Freedom, the nonprofit advocacy group that supplied the lawyers and resources necessary to withstand more than a decade of arduous lawfare.
Alliance Defending Freedom is not a commercial litigation funder. But the principle is the same: citizens facing wealthy, powerful opponents should not be forced to fight alone. Whether support comes from a nonprofit legal group, a law firm’s pro bono practice, a contingency-fee attorney, or a third-party funder, outside financing can be the only thing standing between an ordinary American and financial ruin.
Yet Congress is singling out third-party litigation funding for extra scrutiny. Lawmakers want to impose new disclosure mandates, compliance requirements, and other burdensome regulations.
In practice, these proposals will increase the cost and risk associated with litigation funding. Many third-party funders will conclude that it's not worth helping activists and small businesses defend their rights.
While lawmakers may have good intentions, there's no evidence the bill is necessary. There's already a government agency—the Committee on Foreign Investment in the United States (CFIUS)—which can detect and thwart the sort of foreign manipulation that Rep. Cline's bill aims to prevent. Through CFIUS, the federal government has repeatedly intervened to block or unwind investments deemed a national security risk.
And judges already have broad discretion to review funding arrangements if they pose a risk to the integrity of a lawsuit.
Rep. Cline's effort isn't occurring in isolation. Senator Thom Tillis (R-NC), among others, is pursuing a punitive tax on litigation-funding proceeds, which would penalize the investors willing to finance costly legal battles.
Taken together, these proposals would make it harder for conservatives to fight in court. And both ultimately benefit the same group: the powerful institutions that already possess enormous advantages in the legal system.
If these efforts succeed, the biggest winners won't be taxpayers or national-security hawks. They'll be the government agencies, corporations, and left-wing interests that succeed when ordinary Americans can't afford to challenge them.
Republicans should not make justice a luxury only the government and the powerful can afford.
Drew Johnson is a limited government columnist, a senior fellow at the National Center for Public Policy Research, and the current Republican nominee for Nevada State Treasurer.
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