Key Takeaways
Parties that suspect funder-driven control in litigation should seek targeted, early discovery into funding and assignment mechanics; in the absence of misconduct, courts may let assignee-plaintiffs proceed.
InIn re Turkey Antitrust Litigation, Plaintiff Sysco, a food distributor, assigned its claims to Carina Ventures LLC. Carina Ventures LLC is a "special purpose vehicle" created by Burford Capital LLC, with the "sole purpose" of prosecuting antitrust claims in the litigation. 2025 WL 1795136, at *1 (N.D. Ill. June 30, 2025). Defendants moved for summary judgment, arguing that federal law and public policy prohibits litigation funders from acquiring and litigating claims via assignment.Id.at 3.
The court rejected what it viewed as an invitation to craft new public policy, emphasizing that federal common law, not state law, governs the assignability of federal antitrust claims.Id.at 4. The court also highlighted that courts in similar antitrust litigation have recognized standing through assignment and have declined to police third-party funding absent concrete evidence that third-party funders are exerting undue control.Id.at 4-5. The court found that defendants failed to produce any evidence of coercion, improper control, or "untoward" conduct by Burford, Sysco, or Carina.Id.at 6.
Though the claims inIn re Turkeywere assigned to litigation funders as opposed to being financed by funders, the Court's holding is instructive for future litigants defending against assigned or funder-backed claims. The court's opinion reinforces that discovery into these litigation arrangements is critical and should be targeted at the nature of funders' control and involvement in the underlying litigation.
While last year the Judicial Conference's Advisory Committee on Civil Rulesformed a subcommitteeto study the need for a federal rule requiring disclosure of third-party litigation funding in civil cases, until such a rule is adopted, litigants should pursue early discovery aimed at showing improper control over litigation or settlement decisions. For example, parties should consider obtaining early discovery relating to funding agreements, communications, and affidavits addressing control, decision rights, and settlement vetoes, and be prepared to show why such materials are relevant and proportional. Absent a robust factual record of untoward or obstructionist conduct by litigation funders, courts may be disinclined to regulate litigation funding.
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