GROVER NORQUIST: It's time to stand up to the trial lawyers' lobby

Tort law accounts for 2.1% of the U.S. economy.

Many of those billions of dollars are wasted, extorted, and taken from those who have done nothing wrong to enrich well-paid trial lawyers who don't lose their jobs if they bankrupt a company or devastate a city.

Tort law is one of the few areas where the United States performs worse than other countries. We lead the world in wasteful, unfair, and expensive litigation.

It's getting worse, not better.

The new invasive species is called “third-party litigation funding” (TPLF), where “investors” target a company or industry and finance the litigation. They personally choose the target (rich, vulnerable, unwilling, unable to defend themselves) and invent the “crime.”

What do the investors get? A percentage of the profits. The “victim” loses control of his company and is at the mercy of the financial greed of the “investors”.

And this lucrative, bad idea is now known worldwide. Many of those investing in the lawsuit against American industry are not Americans. They are foreigners. Who? Good question.

They have passed laws to keep their names and financial interests secret. A secret witness cannot attack you in American courts – you have the right to face your accusers. But here the driving forces are kept secret. Why? Who benefits from it?

Something is rotten in the state of Denmark (or elsewhere, that's a secret).

Since 2010, the TPLF has grown in popularity among progressive activists, foreign actors and Wall Street hedge funds, although the reasons for its harassment of American companies vary widely. An estimated $15.2 billion is currently being invested in corporate litigation.

Wealthy donors pour between $2.3 billion and $5 billion into TPLF campaigns each year, as do foreign companies that have a vested interest in obtaining American companies' trade secrets through anonymous litigation. (RELATED: Liberal nonprofit launches multi-million dollar campaign to scare moms into supporting Biden)

The trial lawyers' fraud machine is taking money out of your pocket. The Institute for Legal Reform has found that tort law costs Americans $443 billion annually. That's $3,621 per household. Worse, instead of plaintiffs reaping the rewards of these settlements, trial lawyers and TPLF financiers are bearing an estimated 88% of the punitive damages awards. Trial lawyers and their anonymous paymasters are reaping windfall profits from American families who pay the crippling “tort tax.”

State and federal lawmakers have begun to push back against the TPLF’s tidal wave.

In late 2022, 14 state attorneys general warned U.S. Attorney General Merrick Garland about the impact of foreign TPLF activities on the American economy. Since then, Montana, Indiana, and West Virginia have adopted strict TPLF transparency standards, including mandatory disclosure requirements and bans on sharing trade secrets. Kansas, Louisiana, and Oklahoma are also considering introducing legislation to regulate TPLF.

Speaker Mike Johnson (R-La.) and Senator John Kennedy (R-La.) have introduced the Protecting Our Courts from Foreign Manipulation Act, legislation that would prohibit foreign actors from engaging in anonymous TPLF activities. Republican Representative James Comer of Kentucky, chairman of the House Oversight Panel, recently held a hearing examining how the TPLF is funded by left-wing activists seeking to undermine the legal system. (RELATED: Puerto Rico sues oil industry over impacts of 'climate change' in $1 billion lawsuit)

United States Courthouse (Photo by Eric Thayer/Getty Images)

Republicans can build on this great work by enacting a federal standard for disclosure of TPLF information. That's why lawmakers should support the Litigation Transparency Act of 2024, introduced by Republican Rep. Darrell Issa of California, chairman of the House Subcommittee on Courts, Intellectual Property, and the Internet. This bill would require disclosure of the identity of all TPLF investors who would benefit from the outcome of a civil case. All right-to-pay agreements would also have to be presented in court.

For far too long, anonymous TPLF investors have bled companies dry and forced hardworking Americans to pay the tort tax. By demanding accountability from predatory legal systems, the Litigation Transparency Act of 2024 will rebalance the scales of justice.

Grover Norquist is president of Americans for Tax Reform.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.

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