The Rutgers Law Record

49 Rutgers L. Rec. 118 (2022) | WestLaw | LexisNexis | PDF

Imagine there is a plaintiff with a meritorious claim, but, because of the high costs of litigation, he cannot afford to bring or maintain it. Though there is a market for such claims and feasible fee arrangements are available, his claim is nonetheless rejected because of the litigation costs, the high risk of losing, and/or the unlikelihood of settlement. The claim, regardless of its merits, is over before it begins. There is now, however, one more option available to such plaintiffs: third-party litigation funding.

Increasingly, third-parties—investors with no legal interests in cases—are funding lawsuits, bearing most or all of the cost and risk of litigation.^[1] In exchange for financing a lawsuit, an investor will receive a large percentage of an award or settlement.^[2] Third-party litigation funding’s proponents believe it empowers claimants to bring meritorious claims against defendants, providing them the otherwise unobtainable sling and rocks needed to challenge corporate goliaths.^[3] Its opponents—chief among them the U.S. Chamber Institute for Legal Reform, an affiliate of the U.S. Chamber of Commerce—believe it encourages and enables claimants to bring frivolous and abusive claims and have, accordingly, attempted to frustrate these funding arrangements.^[4]

In 2009, the U.S. Chamber Institute, recognizing that “third-party funding governed in the United States by a patchwork of relatively weak laws, cases, rules, and regulations,” issued a seminal report on third-party litigation funding, predicting that it would cause substantial litigation abuse and that, under the doctrines of champerty and maintenance, it must be prohibited.^[5]

American courts, despite the Institute’s arguments, have largely upheld these arrangements on public policy grounds, concluding, like Australian and English courts before them, that, whatever the potential for abuse, third-party litigation funding allows low-resourced claimants greater access to justice.^[6] The U.S. Chamber Institute thus re-focused its attention on the issue of disclosure, arguing that financing agreements must be disclosed to defendants.^[7] In the twelve years since the Report’s publication, American courts have grappled with the Institute’s arguments and have, by and large, rejected them, permitting third-party litigation funding and placing materials relating to these financing agreements beyond the scope of discovery.^[8]

Part I of this Note provides a general overview of third-party litigation funding, from its modern origins in Australia and England to the litigation market as currently constituted in the United States. It concludes with a discussion of the U.S. Chamber Institute’s 2009 Report, putting it in the political context of the tort-reform movement.

Part II reviews court opinions over the last decade that have considered the issue of whether the doctrines of champerty and maintenance necessarily bar third-party litigation funding in the United States, issues that were unlitigated when the Chamber Institute published its 2009 Report. 

Part III reviews court opinions over the last decade concerning third-party litigation funding in the discovery context. In particular, whether financing agreements are generally “relevant” within the meaning of Federal Rule of Civil Procedure 26(a) as well as whether these agreements are protected under attorney-client privilege or the work-product doctrine.

Finally, Part IV briefly considers other developments regarding the disclosure of third-party litigation financing agreements. In particular, an Institute-sponsored proposal to add an additional fifth prong to Rule 26(a) to the Rules of Civil Procedure, which would require parties to disclose financing agreements to opposing parties “without awaiting a discovery request.”^[9]

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^[1] Victoria A. Shannon, Harmonizing Third-Party Litigation Funding, 36 Cardozo L. Rev. 861, 863 (2015).

^[2] Id.

^[3] See Joseph J. Stroble & Laura Welikson, Third-Party Litigation Funding: A Review of Recent Industry Developments, 87 Def. Couns. J. 1, 2 (2020).

^[4] See generally John Beisner et al., U.S. Chamber Inst. For Legal Reform, Selling More Lawsuits, Buying More Trouble: Third-Party Litigation Funding a Decade Later (2020) [hereinafter Chamber Report II].

^[5] John Beisner et al., U.S. Chamber Inst. For Legal Reform, Selling Lawsuits, Buying Trouble: Third-Party Litigation Funding in the United States (2009) [hereinafter Chamber Report I].

^[6] See Stroble & Welikson, supra note 4, at 7.

^[7] Chamber Report II, supra note 5, at 26.A

^[8] See Stroble & Welikson, supra note 4, at 10–15.

^[9] Fed. R. Civ. P. 26(a).

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49 Rutgers L. Rec. 81 (2021) | WestLaw | LexisNexis | PDF

In an effort to address the cost of healthcare and the number of uninsured people in the United States, Congress passed the Patient Protection and Affordable Care Act, commonly called the “Affordable Care Act,” “ACA,” or “Obamacare,” in 2010. Signed into law by President Barack Obama, the Act required states to expand Medicaid coverage to various segments of the population not previously covered by the program, or states may lose all of their federal Medicaid funding. Additionally, a provision known as the “individual mandate” required those uninsured by the government or their employer to either pay a small penalty to the Internal Revenue Service or purchase private insurance. In 2012, a group of 26 states and other parties sued Health and Human Services Secretary, Kathleen Sebelius, and related parties regarding the constitutionality of the statute. In a 5-4 decision, the U.S. Supreme Court in National Federation of Independent Business v. Sebelius, 567 U.S. 519 (2012), found the individual mandate constitutional under Congress’s power to tax but found the Medicaid expansion provision to be unconstitutionally coercive under Congress’s spending power.

This note will seek to further contextualize Justice Ginsburg’s dissent, which argued the Medicaid expansion provision should not have been struck down by the majority, as the states are merely expecting Medicaid funds from Congress, but they are not at all entitled to them if they do not meet the criteria set by Congress, in the present moment. This note will explore the COVID-19 pandemic and the role that the states and the federal government ought to play in ensuring the general welfare of the nation is protected, primarily by either expanding Medicaid or otherwise ensuring free healthcare in response to the greatest economic and health crisis in over a century. To achieve this, the note will revisit the ACA and the Supreme Court’s spending clause analysis given the changing dimensions of the healthcare debate, with employer-sponsored insurance enrollment declining (along with overall employment) and government insurance and subsidies for COVID-19 testing dominating the market, and analyze, through a policy-oriented lens, whether states ought to take the lead in closing the so-called “coverage gap,” or whether Congress should have the power to expand insurance in a cooperative federalism model, especially in a deadly pandemic emergency which was not at all contemplated by the Court in Sebelius.

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49 Rutgers L. Rec. 25 (2021) | WestLaw | LexisNexis | PDF

“Although the idea of permanence appears to be traditionally associated with legislation, law is inevitably constrained by time. Laws are doomed to face a destiny like the mythological character Kronos: they overthrow existing laws, have a period to reign, but are destined to be overthrown again by the next generation. Like Kronos, legislators often experience the ‘nostalgia of eternity,’ refusing their mortality as well as that of their rules.”

An interstate compact designed to promote uniformity in state taxation would appear to have little in common with an interstate compact designed to fight corruption in the Port of New York. Yet recent cases concerning these two very different subjects illustrate that interstate compacts can experience similar aging issues that can create an existential crisis decades after their formation. Who could have anticipated when the New York Waterfront Commission Compact was adopted in 1953 that the proliferation of containerized shipping would cause New Jersey, one of the Compact’s two parties, to attempt to withdraw from the Compact in 2018, leading to litigation over its right to do so? And who would have predicted when the Multistate Tax Compact was formed in 1967 that the adoption of an income tax apportionment formula by a non-party state would, three decades later, cause the Compact states to abandon a different apportionment formula that had been integral to the Compact from its inception, leading to multiple lawsuits challenging their authority to do so?

It should not be surprising that the passage of time can cause even the most well-reasoned and carefully written compact to become destabilized in a much different economic or legal environment than existed when it was written. When that occurs, it isn’t easy to “fix” the compact to address the problem. Interstate compacts are often considered contracts. If they were private contracts, the parties to the contract would always be free to modify it. But because interstate compacts are also statutes, modifying the compact is no easy task. First, the compact must provide a method to modify it. And then the legislature in each state would need to enact a statute that makes the change. The situation is even more complicated if the compact is a congressionally approved compact like the Waterfront Compact. Such compacts constitute federal law. Congress would usually need to approve any change to such a compact. If the compact provides no mechanism to resolve the problem, the compact may face an existential crisis – states may determine the only solution is to withdraw. This is precisely what happened with the Waterfront Compact and the Multistate Tax Compact. This Article explores the derivation, causes and – at least in the case of the Multistate Tax Compact – the resolution of such a crisis.

While it is not possible to anticipate all the circumstances that could adversely affect a compact’s continuing viability, it is possible to include certain tools in the compact that can help the states more nimbly adapt to those changed circumstances than through the vagaries of litigation. The Article will explore some of those tools.

Part II of the Article will recount a brief history of the New York Waterfront Commission Compact and the Multistate Tax Compact. Part III will describe the developments that led to the litigation that threatened each Compact’s continuing viability. Part IV will discuss the recent litigation that threatened both compacts and the deficiencies in each compact that made litigation likely. Part V will suggest some legal tools that future compact drafters might consider to reduce the likelihood of such destabilizing litigation occurring. Part VI will offer a brief conclusion.

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Introduction

48 Rutgers L. Rec. 206 (2021) | WestLaw | LexisNexis | PDF

What does a judge presiding over her court, a researcher working in an astronomical observatory[1], and a monk observing monastic silence have in common?  The answer is that they are all members of a small group of adults who go about their day without being continuously distracted by a smartphone, although admittedly on account of varied individual commitments and institutional constraints.  Unlike this unusual group, most of us spend our day in a continuous state of technology induced distraction. Claudia Roda notes, “the advent of information and communication technologies has dramatically shifted the balance between the availability of information and the ability of humans to process information.”[2]  We have migrated, albeit not seamlessly, from an age where information was scarce to an age where attention is scarce.[3]  Scarcity of attention has led to a slew of warnings from both experts and regulators about the addictive and distractive nature of technologies.[4]

Against the backdrop of this growing recognition of the importance of human attention and technology’s adverse impact on it, this paper seeks to formulate an ethical response to the challenges posed by the rise of the attention economy.  In this paper, I highlight the vital role played by attention in preserving individual autonomy.  I seek to protect this scarce human resource through a right to attentional privacy.  Privacy has been traditionally understood in informational context.  This paper’s chief contribution lies in articulation of a dual conception of right to attentional privacy, which keeps intrusive, immersive, persuasive, and addictive technologies at bay.  I begin by defining attention and then provide a brief account of previous attempts at formulating a freedom or right to attention.  I then highlight the techno-commercial practices adopted by Big Tech firms to harvest attention by configuring an individual’s choice environment through hypernudges[5] and deploying supernormal stimuli[6] to divert an individual’s attention towards artificial target of advertisements.[7].  I analyze the various forms of intrusive and addictive technologies before formulating a dual conception of positive and negative right to attentional privacy.

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[1] Wayne Drash and Evelio Contreras, America’s Quietest Town where Cell Phones are Banned, CNN  (2015), https://edition.cnn.com/interactive/2015/07/us/quiet-town-american-story/;  Dan Levin, No Cell Signal, No Wi-Fi, No Problem. Growing Up Inside America’s ‘Quiet Zone’ N.Y. Times (Mar. 6, 2020), https://www.nytimes.com/2020/03/06/us/green-bank-west-virginia-quiet-zone.html.

[2] Claudia Roda, Introduction, in Human Attention in Digital Environments 1, 1 (Claudia Roda ed., 2011).

[3] See Michael H. Goldhaber, The Attention Economy and the Net, First Monday (Apr. 1997), https://firstmonday.org/ojs/index.php/fm/article/view/519/440/.

[4] See Bernadka Dubicka & Louise Theodosiou, Royal College of Psychiatrists, CR225: Technology Use and the Mental Health of Children and Young People (2020); Digital, Culture, Media & Sport Committee, House of Commons, Immersive and addictive technologies (2019).

[5] Karen Yeung, ‘Hypernudge’: Big Data as a mode of regulation by design, 20 (1) Information, Communication & Society 118, 122 (2017).

[6] Niko Tinbergen, The Herring Gull’s World: A Study of the Social Behavior of Birds 206-208 (Revised Ed. 1960).

[7] Yogi Hale Hendlin, I Am a Fake Loop: The Effects of Advertising-Based Artificial Selection, 12 Biosemiotics 131, 145 (2019).

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48 Rutgers L. Rec. 166 (2021) | WestLaw | LexisNexis | PDF
New Jersey cannabis law is dynamic. In the weeks leading up to this note’s publication, the June 2019 RFA was released from its stay and DOH was permitted to resume scoring applications and New Jersey legalized the cannabis for adult use. Thus, this note serves as a road map for licensing ATCs under the new adult use legislation in New Jersey, or for other states that have yet to enact a comprehensive medical cannabis program. Part I of this note will introduce necessary background information that is germane to understanding the legal treatment of cannabis in New Jersey. More specifically, Part I will track New Jersey’s Medical Marijuana Program (“MMP”) progression, beginning with the January 2010 enactment of the New Jersey Compassionate Use Medical Marijuana Act (“CUMMA”) and concluding with the June 2019 RFA. Part II will examine the three ATC licensing processes states employ when the state restricts the amount of available licenses. Part III will analogize and distinguish case law examining the ATC license process in New Jersey, Colorado and Arkansas with caselaw examining college admissions decisions. Part IV will present potential solutions to New Jersey’s ATC licensing process, drawing guidance from Missouri. .
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