Another federal court rejects discovery into litigation funding

Continuing a nationwide trend, in an order dated January 7 in MLC Intellectual Property, LLC v. Micron Technology, Inc., Judge Susan Illston of the Northern District of California rejected a discovery request into the plaintiff’s litigation funding arrangements, concluding that discovery of such arrangements is “not relevant”.

The defendant had tried to argue that its requested discovery was somehow relevant to conflicts of interest, but it is not defendants’ function to police such conflicts. Judge Illston handily swept aside that illusory justification, noting that “the Court can question potential jurors in camera regarding relationships to third party funders and potential conflicts of interest” if needed.

Further, as Judge Illston wrote: “The cases cited by Micron do not support Micron’s broad request, as the courts simply held that fee and litigation funding agreements could be discoverable when there was a specific, articulated reason to suspect bias or conflicts of interest.”

Judge Illston’s rejection of any precedent for broad discovery into litigation funding arrangements in MLC is especially noteworthy because of her earlier decision in Gbarabe v. Chevron. That case, which involved qualification of class counsel, has been erroneously cited as providing such a basis by The US Chamber Institute for Legal Reform (ILR), a separately incorporated affiliate of the US Chamber of Commerce that has been described as “virulently anti-funder”. Clearly, as the January 7 order makes clear, its author disagrees.


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