Litigation Funding Companies Claim Judge Improperly Assumed Jurisdiction in Concussion Settlement Case

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On January 23, 2019, three litigation-funding companies, RD Legal Funding LLC, Atlas Legal Funding LLC, and Thrivest Specialty Funding LLC told a three-judge panel that U.S. District Judge Anita B. Brody, the judge who oversaw the NFL concussion case settlement, improperly assumed jurisdiction over third party funding contracts between the companies and the former players. The litigation funding companies argued that Judge Brody lacked jurisdiction to bar the litigation funding companies from recovering their stake in the settlement.

As we have previously reported, in April 2015, Judge Brody approved a settlement between the NFL and almost 22,000 former players. The settlement established a 65-year uncapped monetary fund for players who could prove certain neurological diagnoses. The settlement provided a $75 million “baseline assessment program” that provided eligible retired players with neurological examinations, a $10 million education fund to promote safety and injury prevention in youth football, and to inform retired players of their medical benefits. Lastly, the settlement offered payments ranging from $1.5 million to $5 million for each player, or the player’s estate, who suffered from a serious degenerative condition in connection with a traumatic brain injury.

In December 2018, Judge Brody invalidated the contracts between the litigation-funding companies and the former NFL players. One of the litigation companies, RD Legal Funding LLC, reported that Judge Brody’s ruling invalidated more than a thousand third-party litigation funding agreements between the players and the companies. RD Legal Funding LLC claims that it paid $1.6 million to purchase portions of the future awards from at least seven players. The litigation-funding companies argued that Judge Brody’s invalidation of those contracts amounted to her “extracting” a single issue that had been pending in separate litigation. Further, according to the litigation-funding company’s attorney, “[f]undamentally, I think this is about the scope of authority and how that authority is exercised.” One of the judges on the panel agreed that Judge Brody’s move was “really unusual.”

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