Legal Gavel & Open Law Book by Blogtrepreneur is licensed under CC BY 2.0.
The Chinese Communist Party and other hostile foreign governments have been engaged in a practice of manipulating domestic civil cases––and you might not even know it.
In July, the House Judiciary Subcommittee on Courts, Intellectual Property, Artificial Intelligence, and the Internet held a hearing entitled “Foreign Abuse of U.S. Courts,” which investigated how the Chinese Communist Party (CCP) exploits weaknesses in the U.S. legal system to target Americans and manufacture unfair advantages for itself. Among other abusive practices, expert witnesses at the hearing described how the CCP and other foreign powers engage in third-party litigation funding (TPLF) to manipulate the outcomes of civil cases between two or more parties within the United States.
As explained by Professor Julian Ku of Hofstra Law School in his hearing testimony, the CCP has secretly engaged in TPLF on a wide scale to target both U.S. businesses and private citizens. By using “complex networks of shell companies, investment funds, or intermediary organizations,” the Chinese government is able to pursue their geopolitical goals in secret by funding lawsuits that appear to the courts as a mere civil dispute.
In many cases, as highlighted by Emily de La Bruyere of the Foundation for Defense of Democracies, the Chinese government funds lawsuits against American companies to ensure that China’s firms can outspend their American competitors in court. These cases also allow the CCP to gain greater access to U.S. technologies and corporate secrets through the discovery process and the Chinese government’s policy of military-civil fusion. At the same time, this foreign funding results in the extraction of wealth from American businesses and taxpayers by clogging up the court system and manipulating the outcomes of cases.
Crucially, under current law, parties to a lawsuit are often not even aware that a foreign government is funding the litigation brought against them. In many jurisdictions, the funders of such lawsuits are not required to disclose their identities.
Legislation has been proposed to increase transparency around these foreign threats: Congressman Ben Cline (R-Va.) has introduced H.R. 2675, the “Protecting Our Courts from Foreign Manipulation Act of 2025,” which would require the disclosure of any foreign persons, foreign states, or sovereign wealth funds who have a financial stake in the outcome of a civil case. The bill would also prohibit foreign governments, sovereign wealth funds, and their shell organizations from engaging in TPLF. Other legislation like the Litigation Transparency Act of 2025, introduced as H.R. 1109 by Congressman Darrell Issa (R-Calif.), would require the disclosure of third-party litigation funders in a broader range of court cases.
Americans deserve transparency, especially when foreign governments attempt to manipulate the outcome of domestic matters. Increasing disclosures of foreign funding in civil cases would help protect consumers, businesses, and U.S. national security.
