Mystery Ad Spotlights Looming Tax Fight for Litigation Financers

During the June 1 episode of The Totally Football Show with James Richardson, a podcast produced by The New York Times’ The Athletic, listeners in the Washington, DC-area heard a mysterious ad.

“Shadowy overseas funders are paying to sue American companies in our courts,” a voice said, “and they don’t pay a dime in US taxes if there is an award or settlement.”

The 60-second spot highlights an emerging strategy, seeking to turn consumers against the plaintiffs’ bar and litigation finance—a niche industry in which investors fund lawsuits and receive a portion of awards and settlements. It comes as Republicans on Capitol Hill are pushing to include a measure in their “big, beautiful” spending bill to lob a 41% tax on litigation finance profits.

The source of the ad is unknown: It didn’t include the “paid for by” disclosure required by federal law. The Athletic and the producers of a separate national security podcast that also aired the ad, blamed a vendor and said they asked for it to be removed. The vendor did not respond to questions about who purchased the ad time.

The ad appears to support Sen. Thom Tillis’ (R-NC) bill to establish the litigation finance tax. “A new proposal before Congress would close this loophole and ensure these foreign investors pay taxes just like the actual plaintiffs have to,” the voice said, urging listeners to contact lawmakers. “Only President Trump and Congressional Republicans can deliver this win for America.”

“We have no idea about this,” a Tillis staffer said of the ad. The US Chamber of Commerce, a leading critic of outside money behind lawsuits, and a newer group partially backed by Uber Technologies Inc. said they were not involved, although they support the message.

“This administration presents an opportunity for us to get lawsuit abuse reform at the federal level,” said Lauren Zelt, the executive director for Protecting American Consumers Together. PACT, launched in January, is also focusing on states including California, Texas, and Florida.

‘Family Pocketbook’ Focus

Massive companies and Republicans have long used the “tort reform” banner to rail against plaintiffs’ lawyers, seeking to impose limits on their ability to sue on behalf of large groups of consumers allegedly injured by harmful products or business actions. They’re more recently turning their attention to the $15.2 billion litigation finance industry.

“Our strategy is to communicate to consumers in a way that they understand how lawsuit abuse reform affects their lives overall, especially their family pocketbook,” said Zelt, who worked for the Republican National Committee and Mitt Romney’s 2012 presidential campaign.

PACT notched a win in April, when Georgia Gov. Brian Kemp signed tort reform legislation. The law allows funding agreements to be discoverable in court and bans funders from directing the cases they bankroll.

The Chamber of Commerce last year estimated that US tort system costs—compensation to plaintiffs, legal expenses, and insurance—reached $529 billion in 2022. The chamber said that equates to about $4,200 per household.

Uber has faced thousands of lawsuits from riders who allege they were sexually assaulted by drivers, as well as drivers arguing they’re entitled to certain employee rights. Intel, which has faced sweeping lawsuits backed by outside funders, and manufacturing industry group US Made lobbied on litigation issues in the first quarter, disclosures show. Google, Amazon.com Inc., and Johnson & Johnson, which faces billions of dollars in liability for talc-cancer cases backed by outside funders, supported an earlier effort to require outside funding disclosures in federal lawsuits.

“These corporations have always created AstroTurf front groups to try and prevent regular people from holding the corporations accountable,” said Dan Newman, a political consultant for the Consumer Attorneys of California, which recently launched digital ads targeting PACT. “The names change, but the story doesn’t. It’s some of the world’s biggest corporate special interests using their wealth and power to rig the system to avoid accountability and make more money.”

Make America Affordable Again

Another group, Make America Affordable Again, is pushing legislation to require plaintiffs’ attorneys to pay the legal bills for people and entities they sue in cases they lose. The group, which has not publicly disclosed its funding, is run by former Trump campaign staffers Chris LaCivita and Tony Fabrizio, according to Axios.

“Frivlous lawsuits” are “driving up the cost of your auto, home, and health insurance,” the group said in one ad posted in May, and in another that “left-wing lawyers” contributed millions to Democratic campaigns.

Republican lawmakers last month introduced a plan to require plaintiffs who lose suits against the government to cover defense costs. President Donald Trump has directed the Justice Department to demand bonds from court challengers when judges temporarily halt his policies.

“If you did ‘loser pays’ you could cut your courts, you could cut them down about 90%,” Trump said during a January press conference about the California wildfires.

LaCivita and Fabrizio didn’t respond to comment requests.

The Chamber of Commerce welcomes the additional firepower, said Stephen Waguespack, president of its Institute for Legal Reform.

“We’ve noticed, we’ve talked to those groups and, quite frankly, we’re appreciative,” Waguespack said. “You’ve got a predatory plaintiff bar group that is exploiting our legal system.”

Litigation funders are trying to counter the narrative. The International Legal Finance Association last week hired GOP lobbyist Pete Kirkham, according to a disclosure. Kirkham previously led the National Republican Congressional Committee and was chief of staff for Rep. Tom Cole (R-OK), the House’s top appropriator.

“Corporations don’t want to be held accountable when they’ve done something wrong,” said Julia Duncan, a spokeswoman for the American Association for Justice, a prominent trial lawyers group. “Instead of making their products, workplaces, and services safer, they’d rather manipulate the legal system to their advantage and infringe on Americans’ rights.”

As for the ad, Acast, the vendor for both podcasts, said it didn’t generate or sell the campaign. It ended after Acast told partners to take down the ad, the company said.

—Justin Wise also contributed to this story.