H.R. 2675, Protecting Our Courts from Foreign Manipulation Act

H.R. 2675 would make it unlawful for a foreign state or sovereign wealth fund to directly or indirectly fund a civil lawsuit in the United States in which it is not a named party. The changes would apply to both pending and future civil actions. The bill would increase disclosure and certification requirements on litigants in cases where foreign sponsors or entities have interests at stake. H.R. 2675 also would require the Attorney General to report annually to the Congress on activities involving foreign funding of third-party litigation.

As a result of the changes, CBO expects that fewer civil cases would be filed in federal courts. Under current law, the federal judiciary charges fees to file suits in district courts. Those fees are recorded in the budget as revenues and the courts can spend those fees without further appropriation. Because CBO expects that the number of affected cases would be small, we estimate that any decrease in revenues and the consequent direct spending would be insignificant over the 2026-2036 period. The net effect on the deficit from those changes would be negligible.

Using information from the Department of Justice about the costs of similar activities, CBO estimates that implementing the reporting requirement in H.R. 2675 would cost less than $500,000 over the 2026-2031 period. Any related spending would be subject to the availability of appropriated funds.

H.R. 2675 would impose intergovernmental and private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) by prohibiting lawyers and litigants, including state and local governments, in federal civil lawsuits from accepting payments or entering into contracts with foreign states or sovereign wealth funds that are not named parties in the lawsuit. The bill also would cancel existing contracts that violate those provisions.

The cost of those mandates is the lost compensation from the contracts and payments that would be prohibited or canceled by this bill. CBO has determined that there is limited publicly available information on the number and value of such contracts. Additionally, that information does not distinguish between foreign and domestic contracts. Therefore, CBO cannot estimate whether the cost of the mandates would exceed the annual thresholds established in UMRA for intergovernmental and private-sector mandates ($107 million and $214 million respectively, in 2026, adjusted annually for inflation).

The bill also would require federal courts to dismiss with prejudice any pending civil actions in which prohibited funding was used by a plaintiff. By dismissing those cases, the bill would eliminate those plaintiffs’ ability to pursue otherwise valid claims in federal court. This would impose an intergovernmental and private-sector mandate by eliminating an existing right of action for plaintiffs. Because the details of these cases are generally confidential, CBO has no basis to determine the number of cases that could be dismissed or the potential awards from such cases. Therefore, CBO cannot estimate whether the cost of the mandates would exceed the annual thresholds established in UMRA.

Lastly, the bill would impose intergovernmental and private-sector mandates by requiring lawyers and litigants to disclose information related to foreign funding to the other parties of the lawsuit, the court, and the Attorney General. CBO estimates that the cost to comply with this mandate is small because such information would be readily available.

The CBO staff contacts for this estimate are Jon Sperl (for federal costs) and Erich Dvorak (for mandates). The estimate was reviewed by H. Samuel Papenfuss, Deputy Director of Budget Analysis.