Litigation » U.S. District Judge Casey Rodgers Not A Big Fan of Litigation Finance

U.S. District Judge Casey Rodgers Not A Big Fan of Litigation Finance

September 13, 2023

What is an Effective Meeting?

Alison Frankel writes that U.S. District Judge Casey Rodgers, who is overseeing the proposed $6 billion settlement of claims against 3M by multitudes of U.S. military veterans and service members claiming that 3M’s military-issued earplugs caused their hearing loss, is not a fan of litigation funding.

Judge Rodgers explained that she wants assurance that plaintiffs in the consolidated litigation are not “exploited” by “predatory” litigation funders who charge “exorbitant fees and rates of interest.” To that end, she issued an order that plaintiffs’ lawyers with cases in the multi-district litigation may not approve or participate in any deal between their clients and outside funders offering high-interest cash advances in anticipation of payouts from the settlement.

She also barred claimants from entering any deal with a litigation funder without obtaining her approval in advance. Rodgers seems to be the first multi-district litigation judge to place major obstacles in the path of post-settlement agreements between plaintiffs and lenders offering them advances on their settlement money, according to several litigation funding experts Frankel consulted.

The judge has plenty of reasons to be concerned about lenders who contend that double-digit interest rates are justified by the risk that a proposed multi-district settlement will take years, or won’t be approved at all.

She cited a study that noted post-settlement funding deals can drop a spanner in the settlement approval works because plaintiffs seek extra money to pay back litigation funders.

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