/, Discovery, Litigation Funding in the USA, Robin M. Davis/New Case Law on Discoverability of Litigation Funding Agreements in the US

New Case Law on Discoverability of Litigation Funding Agreements in the US

Woodsford’s Robin M. Davis assesses the latest developments in the US relating to discovery in cases where a funder is involved:

Earlier this month, the US District Court for the Northern District of California issued a notable decision regarding discovery of litigation funding agreements.  MLC Intellectual Property, LLC v. Micron Technology, Inc., No. 14-cv-03657-SI, 2019 WL 118595, *1-2 (N.D. Cal. Jan. 7, 2019).

Specifically, Defendant Micron Technology, Inc. (“Micron”) moved to compel discovery on “persons and entities that have a financial interest in this litigation,” including specifically production of any litigation funding agreement and identification of any third parties funding Plaintiff MLC Intellectual Property, LLC’s (“MLC”) case.   MLC, 2019 WL 118595, at *1.  Micron’s stated basis for requiring such discovery rested on generalized allegations of bias, including a need to know the identity of any litigation funders to prevent any conflicts of interest for jury members.

MLC opposed Micron’s motion on the grounds that it had already complied with Northern District of California Civil Local Rule 3-15 requiring identification of all persons or entities with a financial interest in the controversy and that Micron’s arguments regarding potential bias or conflicts of interest were insufficient, especially because MLC stated that none of the non-party percipient witnesses in the case were also funding it.

Judge Illston agreed with MLC and denied Micron’s requested discovery regarding litigation funding.  As urged by MLC, she found the discovery requested by Micron not to be relevant, and further suggested that potential jurors may be questioned in camera regarding potential conflicts of interest, including conflicts it any third party litigation funders, if and when the case reaches trial.

This opinion is more good news for claimants and lawyers seeking to use third party litigation funding, as it falls in line with other recent precedents from US District Courts where motions to compel discovery into third party litigation funding arrangements have been rebuffed where they lack relevance or attempt to improperly pierce work product protection.  See, e.g., Lambeth Magnetic Structures, LLC v. Seagate Technology (US) Holding, Inc., Civil Action No. 16-538, 2018 WL 466045,  (W.D. Pa. Jan. 18, 2018); In re: National Prescription Opiate Litigation, Case No. 1:17-MD-2804, 2018 WL 2127807, at *1 (N.D. Ohio May 7, 2018).

About the Author: