NEW JERSEY (Legal Newsline) – New Jersey’s new rule that requires a plaintiff to explain where the money to pursue their lawsuit is coming from has shined a light on the funding of controversial climate change litigation.
Lawyers for the City of Hoboken – which is one of many government plaintiffs that has teamed with private lawyers to sue energy companies like Exxon, BP and Chevron over the alleged effects of climate change – were required to fill out a statement disclosing any third-party funding of that case.
On Aug. 13, lawyers at Emery Celli of New York and Krovatin Nau disclosed that a nonprofit called the Institute for Governance and Sustainable Development is “providing limited funding directly to Plaintiffs’ counsel for attorneys fees and expenses during the pre-discovery phase of this action.”
That “limited funding” is up to $483,500 for fees and costs. IGSD isn’t a traditional litigation funder in that it doesn’t appear to have a financial stake in the outcome but lawyers chose to disclose the money “out of an abundance of caution.”
“Plaintiff, the City of Hoboken, states that no person or entity is providing funding for attorneys fees and expenses in exchange for a contingent financial interest based on the results of the litigation,” the document says.
On June 21, the chief judge for the U.S. District Court for the District of New Jersey, Freda Wolfson, signed a rule that requires plaintiffs to, within 30 days of filing their case or having it transferred to New Jersey federal courts, reveal:
-The identity of the funder –its name, address and place of formation;
-Whether the funder’s approval is necessary for litigation or settlement decisions and if so, what is the nature of the terms relating to that approval; and
-A brief description of the nature of the financial interest.
Following that, parties may seek additional discovery of the terms of litigation-funding agreements.
Similar rules have been passed for federal courts in the Northern District of California and state courts in Wisconsin.
Defendants forced to show how much insurance companies are covering their liability have long contended that plaintiffs who are taking money from third parties be required to turn over that information.
The D.C.-based Institute for Governance and Sustainable Development has taken hundreds of thousands of dollars from the Rockefeller Brothers Fund – one of the climate change litigation’s biggest backers.
Most recently, the Rockefeller fund gave IGSD $175,000 in April 2020 for mitigating climate change.
Cities and states continue to assert their lawsuits belong in state court, while the oil industry wants them in federal court. Federal jurisdiction presents a major hurdle for the plaintiffs to overcome.
The issue has drawn intervention from the U.S. Supreme Court and has yet to be definitively solved.