The American Legal Finance Association Objects to U.S. District Judge’s Case Management Order Regarding Litigation Funding
The American Legal Finance Association (ALFA) objects on behalf of its 30 members to the Case Management Order No. 61 issued by U.S. District Judge M. Casey Rodgers on August 29, 2023 in the 3M Combat Arms Earplug Product Litigation. The Order prohibits claimants in the Litigation from obtaining consumer legal funding without court approval and does not cite any applicable factual basis or legal precedent for such an order. The Order was issued without providing any due process to ALFA members whose funding contracts are in demand by claimants.
“U.S. District Judge M. Casey Rodgers Case Management Order regarding Litigation funding in the 3M Combat Arms Earplug Products Liability Litigation goes well beyond the current treatment of such fundings by the Federal judiciary and exceeds the Court’s authority under the Federal Rules of Civil Procedure,” said Jack Kelly, ALFA Managing Director. “While a small number of Federal courts have required the disclosure of pre-settlement funding deals, no Federal court has barred plaintiffs their constitutional right to contract for necessary financial assistance while they wait for recovery in the Litigation.”
Legal and economic experts widely agree that responsible consumer funding of the type offered by ALFA members provides a vital lifeline for claimants to pay living and medical expenses during a lengthy litigation process, and to avoid resorting to other sources of money that are considerably more expensive and can have very negative credit consequences. Those benefits should be freely available to claimants in this Litigation who are represented by counsel.
The American Legal Finance Association recognizes the Court’s concern that some irresponsible providers of consumer funding, who are not members of ALFA, have engaged in predatory practices in another large mass tort settlement. ALFA filed an amicus curiae brief in that case to support joint enforcement action of the New York Attorney General and the federal Consumer Financial Protection Board against those funding firms. ALFA has also spoken out against bad industry actors and strongly advocates for fair, ethical, and transparent funding standards across the consumer legal funding industry.
While ALFA recognizes the Court’s desire to protect claimants from abuse, Judge Rodgers’ Order prohibits claimants in the Litigation from exercising their constitutional right to contract for financial assistance, an act that no other judicial body, federal or state, has ever taken. That is objectionable and should be reconsidered based on a more complete record.
About the American Legal Finance Association (ALFA): ALFA represents the leading consumer legal funding companies nationwide. The organization supports sensible regulation in the industry that protects consumers through increased transparency while ensuring access to consumer legal funding. Learn more at https://www.americanlegalfin.com/.
