On June 21, 2021, the U.S. District Court for the District of New Jersey announced that it would amend Local Rule 7.1.1 to require disclosure of any third-party litigation funding received by any party. The rule requires that, within 30 days of filing an action or of transfer into the district, all parties file a statement identifying “any person or entity that is not a party and is providing funding for some or all of the attorneys’ fees and expenses” in exchange for either “a contingent financial interest based upon the results of the litigation” or “a non-monetary result” not in the nature of a monetary loan.
The statement must contain the identity of the funder, including the name, address, and (if the funder is a corporate entity) its place of incorporation. Parties must also disclose whether the funder’s approval is necessary for “litigation decisions or settlement discussions.” If the funder’s approval is necessary, the nature of the terms and conditions of approval must also be disclosed.
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On April 3, 2020, the United States District Court for the Southern District of Florida issued an order in the pending Zantac multidistrict litigation (”MDL”) requiring disclosure of funding arrangements and funding documentation between plaintiffs’ counsel and third-party litigation financiers. This order represents some increased traction in favor of arguments seeking to require disclosure of third-party funding arrangements in MDLs.
The Zantac MDL, In re Zantac (Ranitidine) Prods. Liab. Litig., MDL No. 2924, was originally formed by the Judicial Panel for Multidistrict Litigation on February 6, 2020. The plaintiffs sued various defendants, including manufacturer Sanofi and its distributors, alleging that the active ingredient in the heartburn medication Zantac breaks down to form a carcinogen that caused personal injuries. Included in the MDL are also six putative classes of consumers who sought refunds and economic damages based on their purchase of Zantac. Due to a number of actions already pending in the Southern District of Florida, the Panel transferred the remaining actions to that court to be assigned to the Honorable Robin L. Rosenberg.
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