A legal expert suggested Wednesday that defendants in American court cases are typically unable to determine whether the Chinese Communist Party (CCP) funds plaintiffs as a third-party in U.S. courts to achieve outcomes that serve its own interests.
Republican Florida Rep. Byron Donalds asked a panel of experts whether or not they are aware of instances in which U.S. law firms received payments from CCP-linked entities to pursue litigation that is geared toward advancing CCP interests during a Wednesday House Oversight and Accountability Committee hearing on third-party litigation. Aviva Wein, a witness who serves as assistant general counsel for Johnson & Johnson, said that she is not aware of any examples, mostly because defendants in such litigation often do not have access to the agreements signed between plaintiffs and third parties.
“This is really for all the witnesses: are you aware of any specific examples or instances of the Chinese government paying American law firms to sue for certain causes that will actually embolden the CCP’s policy here in the United States?” Donalds asked.
“I am not,” Wein replied. “However, the reason for that, primarily, is because we don’t have access to third-party litigation funding agreements. We don’t know, in many cases, who’s funding these litigations, and that’s why transparency, disclosure, regulation around this industry is so very important.”
Third-party litigation is defined as “an arrangement in which a funder who is not a party to the lawsuit agrees to help fund it,” often because they stand to gain financially if the suit is successful, according to the Government Accountability Organization. Fourteen state attorneys general urged Attorney General Merrick Garland to take action against vulnerabilities in the third-party litigation framework in December 2022, according to the website of Republican Georgia Attorney General Chris Carr.
“The lack of safeguards in third party litigation funding provides a clear path for foreign adversaries to undermine U.S. national economic and security interests through the infiltration of the American litigation system,” according to the Chamber of Commerce Institute for Legal Reform.
Donalds followed up with a question pertaining to whether a third-party litigation can potentially discourage and hamper American innovation and investment. “Absolutely,” said Erik Milito, president of the National Ocean Industries Association.
Donalds further questioned experts about the role that China plays in global green energy supply chains, especially with respect to critical minerals. The Biden administration has bowed to environmental activist pressure to restrict American mining, with activists often using the “sue and settle” techniques the hearing addressed, as House Oversight Committee Chairman James Comer of Kentucky asserted earlier in the hearing.
His line of inquiry appeared to suggest the possibility that Chinese interests are funding lawsuits meant to deter American innovation and investment in building up green energy supply chains of its own in order to maintain China’s current control of the global supply.
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