Foreign Money Is Gaming Our Courts. American Families are Paying for It.

For years, Democrats screamed about “foreign interference.” But while they were chasing ghosts on cable news, foreign influence was infiltrating our courts right here at home—making a killing and sticking American families with the bill.

This is why the Tackling Predatory Litigation Funding Act, introduced by Rep. Kevin Hern, R-Okla., is so important. It will stop a growing industry that is letting outside foreign investors with anti-America First interests bankroll lawsuits in the U.S.  in exchange for a cut of the winnings. 

Think hedge funds, but instead of investing in companies, they’re betting on court outcomes.

Much of that money is coming from foreign sovereign wealth funds. These funds are gaming lawsuits against American businesses, winning big, and then sending the profits straight out of the country.

Most of these suits are weak—the kind that would have never been filed, or would have quickly fizzled out, if not for deep-pocketed backers looking to turn litigation into a payday.

These funders don’t care if the cases ultimately succeed; they just want settlement money. 

Americans have spent years worrying about foreign control of supply chains and tech. But we’ve ignored the fact that our legal system is now open for business to shadowy overseas interests.

This should concern anyone who believes in American sovereignty.

When investors bankroll lawsuits, they’re not looking for justice. They’re looking for a return. 

This can make even weak cases expensive to fight. So companies settle, not because they’re guilty, but because the game is rigged in favor of the people financing the case.

The costs of this profiteering are felt across the American economy.

They show up when a manufacturer delays hiring. They show up when an energy company cuts investment. They show up when prices quietly creep up for everyone else. All because companies had money extracted from them by foreigners gambling on lawsuits and needed to make up the difference. This hits factories, trucking firms, and energy jobs in red-state America.

This is a hidden transfer of wealth out of American communities. No other country would ever tolerate this. Foreign nations would never accept American-backed money quietly steering lawsuits inside their courts and skewing their justice system.

So why are we not only allowing it here, but even providing these exploitative litigation funders preferential tax treatment?

The investors financing these lawsuits often structure their investments so that their earnings are taxed as capital gains rather than ordinary income. This gives them a lower effective tax rate than the plaintiffs.In fact, in many cases foreign investors can avoid U.S. tax liability altogether.

The Tackling Predatory Litigation Funding Act, which Congress is currently considering, addresses the problem by closing that loophole. It would tax the profits of litigation bankrollers at the top income tax rate in the country, plus an additional 3.8%. The bill comes down to one simple principle: The people taking money out of the U.S. economy should not be rewarded with a tax shield while injured parties pay higher taxes than they do. 

If foreign profiteers are going to game the American justice system, then Uncle Sam should be taking a big cut before their money leaves the country. If this fix is put in place, it should disincentivize third-party financiers from ever getting involved in the first place. After all, if you tax something, you usually get less of it.

The proposed act is just common sense.

American lawsuits shouldn’t be just another asset class for global investors that forces regular Americans to absorb the damage.

The MAGA movement was built on the idea that Americans should not be played for suckers—not by Beijing, Brussels, global corporations, or other foreign-backed litigation funders gaming our courts for profit.

If Republicans are serious about defending American sovereignty, they cannot ignore what is happening inside the courtroom. The Hern bill is a critical reform that draws an important line. If foreign money wants to influence American litigation, the American people at least deserve a cut.

It’s time to stop pretending this is normal. There is nothing pro-worker, pro-family, or pro-sovereignty about a system that makes life more expensive at home while lining the pockets of wealthy investors abroad.

This is exactly the kind of upside-down system President Donald Trump was elected to fight. Congress should pass this bill without delay. If it doesn’t, then the Trump administration should consider taking action itself to make clear that American sovereignty and America’s courts are not for sale. 

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