On November 18, 2024, the Department of Justice’s Foreign Agent Registration Act (FARA) Unit published a June 24, 2024 Advisory Opinion discussing whether a Foreign Non-Governmental Organization’s funding of U.S. litigation required the Law Firm representing a U.S. domestic NGO to register under FARA.   As noted in an article authored by the US-based international law firm Morrison Foerster, in the opinion, the Unit concluded that a law firm that received funding from a foreign non-governmental organization (NGO) to pursue impact litigation in U.S. courts was required to register under FARA and was ineligible for both the legal and commercial exemptions.

Our thanks to ExxonMobil Executive Counsel and TCJL Board Member Robert Levy for bringing FARA’s opinion and Morrison Foerster’s article to our attention.

This week, Chief Justice Nathan Hecht referred nine rule issues to the Supreme Court Advisory Committee (SCAC), including two items of particular interest to TCJL members.  Consistent with SCAC’s rules and processes, the issues will be referred to a subcommittee for review and recommendation.

Third Party Litigation Funding (TPLF)

In response to TCJL’s request to the Texas Supreme Court, the Supreme Court Advisory Committee (SCAC) will be reviewing the matter of Third-Party Litigation Funding (TPLF).  The request was sent from Chief Justice Nathan Hecht to SCAC’s Chairman Chip Babcock earlier today with the following instruction:

Third-Party Litigation Funding. The Court has received the attached correspondence regarding third-party litigation funding agreements. The Committee should review, advise whether the Court should adopt rules in connection with third-party litigation funding, and draft any recommended rules.

Artificial Intelligence (AI)

The TCJL Task Force on AI will follow this rule process closely, and TCJL will host a CLE on AI on November 7, 2024, in conjunction with our 38th Annual Meeting in Austin.

Artificial Intelligence. The State Bar of Texas’s Taskforce for Responsible AI in the Law has issued the attached interim report recommending potential changes to Texas Rule of Civil Procedure 13 and Texas Rule of Evidence 901. The Committee should review, advise whether such amendments are necessary or desirable to account for artificial intelligence, and draft any recommended amendments.

The referral letter, including all nine issues and related attachments, appears below.  Please stay tuned for updates and relevant TCJL meeting notices, and please contact our office if you would like to participate in the AI or TPLF workgroups.  TCJL staff can be reached at info@tcjl.com or 512-320-0474.

In a letter to Chief Justice Hecht earlier this week, TCJL requested that rulemaking be initiated to require some form of disclosure of the existence of third-party litigation funding agreements to the court and parties under appropriate circumstances. Our letter asks the Chief Justice to refer the issue to the Supreme Court Advisory Committee for study and the promulgation of a proposed rule to the Texas Rules of Civil Procedure.

Though rulemaking through the SCAC can be a protracted process, it would put the very real and substantive ethical issues posed by TPLF before sitting judges, representatives of both sides of the trial bar, the State Bar of Texas, and in-house and external corporate counsel. If the Court refers our request, we can expect a robust and perhaps contentious debate over these issues and the extent to which TPLF agreements should be discoverable in a particular case and by whom. Our request makes no distinction between consumer and commercial litigation financing for the simple reason that the ethical considerations are the same.

You can read the letter below.

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