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Appeals Court Rejects Trump Detention Policy, Deepening Judicial Split

Appeals Court Rejects Trump Detention Policy, Deepening Judicial Split

Seventh Circuit becomes the sixth appeals court to reject the administration’s broad interpretation of mandatory detention for non-citizens

A divided panel of the Seventh Circuit Court of Appeals has rejected President Donald Trump’s interpretation of mandatory detention for non-citizens arrested inside the United States, becoming the sixth federal appeals court to reject a legal argument central to the administration’s mass deportation agenda.

The government argued that non-citizens already living in the US should nevertheless be treated as individuals "seeking admission" to the country, in the same way as those arriving at the border. That interpretation "doesn't hold water", Judge Joshua Kolar wrote in Thursday’s opinion, saying the government's position "rests upon the illogical use of both legal fiction and ordinary meaning for the same term".

For around three decades, including during Trump’s first term, successive presidential administrations recognised that non-citizens arrested within the US were generally entitled to a bond hearing, where they could argue for release from immigration detention. Such hearings are not available to individuals apprehended while "seeking admission" to the country.

Last year, however, the administration adopted a new interpretation of the law, arguing that even undocumented immigrants who had lived in the US for years were still "seeking admission" and were therefore subject to mandatory detention.

Jaciel Cirrus Rojas, the petitioner in the underlying district court case, "has never applied for anything that counts as 'admission' to the United States. Nor can he successfully 'seek' admission, as his unlawful entry renders him inadmissible," Kolar wrote in the majority opinion, which was joined by Judge Candace Jackson-Akiwumi. Both judges were appointed by former President Joe Biden.

In a dissenting opinion, Judge Diane Sykes, who was appointed by former President George W. Bush, argued that relying on the ordinary meaning of words such as "seeking" was of limited value when interpreting a statute as complex as the Immigration and Nationality Act (INA).

The law clearly provides that both newly arriving non-citizens and those already living in the country are deemed "applicants for admission", Sykes wrote. Consequently, they are all "subject to the same mandatory detention requirement".

"At this point, only the Supreme Court can bring uniformity and settle this question once and for all. I anticipate that it will do so soon," Sykes wrote, adding that, in her view, the Seventh Circuit had "joined the wrong side" of an increasingly deep circuit split.

The Seventh Circuit’s ruling was issued only hours after the Ninth Circuit also rejected the Trump administration’s claim of broad mandatory detention authority under the INA. The Second, Sixth, Tenth and Eleventh Circuits have reached similar conclusions in recent months, while the Fifth and Eighth Circuits have sided with the administration.

The Fifth Circuit has agreed to rehear the issue before its full bench later this year, examining the mandatory detention policy from the perspective of constitutional due process rather than statutory interpretation.

Both the government and immigrant rights advocates have separately petitioned the US Supreme Court to resolve the dispute over mandatory detention.

Despite repeated setbacks in the lower courts, the administration has continued to defend its interpretation of the law. Immigrant rights advocates argue that the policy advances the administration’s mass deportation objectives because people held in detention are less likely to successfully challenge their removal and more likely to agree to leave the country voluntarily.

Cirrus Rojas is represented by the American Civil Liberties Union Foundation and Layde & Parra SC.

The case is Cirrus Rojas v. Olson, Seventh Circuit, No. 25-03127, opinion issued on 30 July 2026.

 

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US Justice Department Proposes Giving Immigration Judges Power to Impose Contempt Fines in Courtrooms

US Justice Department Proposes Giving Immigration Judges Power to Impose Contempt Fines in Courtrooms

Trump admin move seeks to expand authority over lawyers, migrants and witnesses, raising fresh concerns over judicial fairness.

The US Justice Department has proposed granting immigration judges the power to impose civil contempt fines on immigration lawyers, migrants and other individuals appearing before them — a move that would significantly expand their authority within immigration court proceedings.

Under the proposed rule unveiled by the Trump administration, immigration judges would, for the first time, be permitted to “sanction contemptuous action or inaction” by attorneys appearing before them through monetary civil penalties under an authority enacted by Congress three decades ago.

 

The proposed contempt powers would apply not only to lawyers but also to migrants involved in immigration proceedings and witnesses appearing before immigration judges. Individuals could face financial penalties for conduct deemed disruptive or damaging to court proceedings.

However, lawyers representing Immigration and Customs Enforcement (ICE) would be exempt from such penalties under the proposal. The regulation states that immigration judges would not be allowed to exercise contempt authority against federal government lawyers acting in their official capacity. Witnesses testifying as federal government employees in their official roles would also be excluded.

The draft regulation, scheduled for publication in the Federal Register, represents the first formal attempt to fulfil a requirement under a 1996 law requiring the attorney general to establish rules defining immigration judges’ statutory authority to impose civil monetary sanctions.

According to the proposal, contempt powers would allow immigration judges to “control the proceedings before them” and discourage conduct that could interfere with the administration of justice.

The idea of expanding such powers dates back decades. Alberto Gonzales, who served as attorney general during President George W. Bush’s administration, had previously supported regulations allowing immigration judges to have stronger tools to manage courtrooms and safeguard the immigration adjudication system from fraud and abuse.

Immigration judges, who are employees of the Justice Department rather than part of an independent judicial system, have become a key element of President Donald Trump’s immigration enforcement agenda. The administration has focused on increasing the number of judges, speeding up deportation proceedings and reducing delays in asylum cases.

The Justice Department’s Executive Office for Immigration Review (EOIR), which oversees the immigration courts, has appointed more than 300 military lawyers, former ICE attorneys and other legal professionals as immigration judges while dismissing more than 100 judges, according to a Bloomberg Law analysis. The appointments include 41 new permanent and temporary judges who were sworn in on Wednesday.

During Trump’s first term, the Justice Department had also considered introducing regulations on immigration judges’ authority to impose civil monetary penalties, with such plans included in the administration’s Spring 2020 unified agenda.

The latest proposal has drawn criticism from immigration judges and legal advocates. Jeremiah Johnson, executive vice president of the National Association of Immigration Judges, said treating immigration lawyers differently from ICE attorneys raised concerns about equal treatment and due process.

“Proceedings are not fundamentally fair when one party is subject to penalties and the other is not,” Johnson said. He was among the immigration judges removed by the Trump administration last year.

The proposed rule now opens a broader debate over the balance between giving immigration judges greater control over courtrooms and ensuring fairness in a system where judges operate within the executive branch rather than an independent judiciary.

 

 
Trump Asks Supreme Court to Toss $83.3M Carroll Defamation Verdict

Trump Asks Supreme Court to Toss $83.3M Carroll Defamation Verdict

President argues his remarks denying E. Jean Carroll’s allegations were official acts protected by presidential immunity.

US President Donald Trump has asked the US Supreme Court to overturn an $83.3 million jury award granted to writer E. Jean Carroll in her defamation lawsuit, according to a petition reviewed by Bloomberg News.

The petition, filed on Tuesday, marks Trump's latest legal battle with the former Elle magazine advice columnist, who accused him of sexually assaulting her in the mid-1990s. The filing comes just a month after the Supreme Court declined to hear his appeal against a separate $5 million verdict in Carroll's related sexual abuse case.

Trump's appeal centres on the argument that his statements denying Carroll's allegations, made while he was serving as President during his first term, were official acts protected by presidential immunity.

In the petition, Trump's lawyers argued that allegations concerning a President's fitness for office are matters of public concern and that responses to such accusations made in an official capacity should be immune from civil liability.

A spokesperson for Carroll's lawyer, Roberta Kaplan, declined to comment.

Trump is also awaiting the Supreme Court's decision on his request to reconsider its refusal to hear his appeal in the separate $5 million case. He has denied any wrongdoing in both lawsuits.

Carroll alleged that Trump defamed her in 2019 by calling her a liar after she publicly claimed he had sexually assaulted her in a dressing room at Bergdorf Goodman in New York in 1996. She argued that Trump falsely accused her of fabricating the allegation for political motives and to promote her book.

A New York jury awarded Carroll $83.3 million in January 2024 after finding that Trump's statements had defamed her. The verdict was later upheld by the US Court of Appeals for the Second Circuit.

Unlike Carroll's other successful lawsuit, this case concerns statements Trump made while serving as President. He contends that the Supreme Court's landmark ruling on presidential immunity should shield him from liability because his comments were made in the course of his official duties.

Trump further argues that the appeals court wrongly concluded he had forfeited his immunity defence by failing to raise it earlier in the litigation.

In the Supreme Court petition, his lawyers described the judgment as unprecedented, arguing that it was the first time a US court had imposed civil damages on a President for conduct undertaken while in office.

The legal team also criticised the appeals court for upholding what it called an "exorbitant" $83.3 million award without first determining whether presidential immunity applied to Trump's statements, which were made from the White House in response to media questions.

Trump is represented by Robert J. Giuffra Jr., co-chair of Sullivan & Cromwell, and Michael Martinich-Sauter of the James Otis Law Group.

The US Department of Justice is expected to ask the Supreme Court to allow it to intervene on Trump's behalf. It has previously indicated that it will seek to substitute the US government as the defendant under the Westfall Act of 1988, which grants federal employees immunity from personal liability for actions taken within the scope of their official duties.

If the substitution is permitted, the lawsuit would be dismissed because the US government cannot be sued for defamation. Similar requests were previously rejected by both the trial court and the appeals court.

The central issue is whether Trump, as President, was acting within the scope of his official duties when he denied Carroll's allegations.

Carroll's separate civil action was brought under a temporary New York law that allowed survivors of historic sexual assaults to pursue civil claims. That case also included a defamation claim based on statements Trump made in 2022 after leaving office, when he was a private citizen.

 

 
Johnson & Johnson to Pay $5.5B to Settle Talc-Related Cancer Claims

Johnson & Johnson to Pay $5.5B to Settle Talc-Related Cancer Claims

Proposed settlement aims to bring an end to years of lawsuits alleging J&J’s talc-based products caused ovarian cancer.

Johnson & Johnson has agreed to commit $5.5 billion to resolve years of litigation over claims that its talc-based products caused ovarian cancer.

The healthcare giant said the proposed settlement would provide “an efficient conclusion” to the lawsuits. The agreement requires participation from lead plaintiff law firms handling ovarian talc litigation in state and federal courts, representing at least 95% of claims, according to J&J.

If approved, the settlement could bring closure to a legal battle that has challenged the company for more than 15 years. Plaintiffs allege that J&J’s iconic baby powder and other talc-based products were contaminated with asbestos, a substance linked to cancer. The company has consistently denied the allegations, maintaining that its products are safe and that its baby powder never contained asbestos.

J&J discontinued sales of talc-based baby powder in the US in 2020 and globally in 2023, replacing it with a cornstarch-based version.

The company had previously attempted to resolve the litigation through bankruptcy proceedings, a move criticised by opponents who argued that J&J, one of the world’s most profitable companies, was attempting to use bankruptcy protections to limit liability.

J&J has faced around 76,000 lawsuits related to talc products, with analysts warning last year that the number could exceed 90,000. The company said the settlement would allow it to move beyond the litigation and focus on developing medicines and medical devices.

“It provides finality to a saga,” Mizuho healthcare analyst Jared Holz said, commenting on the proposed resolution.

In June, J&J disclosed that it had set aside $11 billion to address legal matters linked to the talc claims. Analysts estimated that resolving the litigation could cost the company between $10 billion and $12 billion if the number of claims reached about 93,000.

The company also faced a major setback last October when a California jury ordered J&J to pay $966 million to the family of a woman who alleged that decades of using the company’s baby powder contributed to her cancer. It was the largest single-user verdict in the long-running litigation.

“While we are confident the company would have ultimately prevailed with further litigation, as it has in the vast majority of cases tried to date, this resolution allows the company to put this matter behind it and remain focused on its mission to develop medicines and devices that save lives,” J&J Vice President of Litigation Erik Haas said in a statement published on the company’s website.

 

 
Meta’s Social Media Trial Setback: Dropped Lawsuit Fails to Stop Legal Battle

Meta’s Social Media Trial Setback: Dropped Lawsuit Fails to Stop Legal Battle

Teen’s decision ends one case, but Meta still faces thousands of social media addiction lawsuits.

A teenager’s last-minute decision to withdraw his social media addiction lawsuit against Meta Platforms Inc. before trial has delayed one of the most closely watched cases in the growing legal battle over alleged harm caused by social media platforms.

The withdrawal comes after an early success for plaintiffs in the sprawling litigation in Los Angeles, where a jury awarded $6 million to a 20-year-old woman in the first bellwether trial against Meta.

However, the dismissal of the second bellwether case does not significantly change the broader landscape of the mass tort. Seven more trials remain scheduled in the initial group of cases, while social media companies continue to face more than 3,000 individual lawsuits, including those filed before the California Superior Court in Los Angeles County.

“There are other trials that have been chosen as bellwether trials. We’re not dealing with a blank slate,” said Ari Waldman, a law professor at the University of California, Irvine.

The case withdrawn on last Wednesday was filed by a boy identified in court documents as R.K.C., a 15-year-old from Panama City, Florida. According to court records, he began using social media at the age of eight and spent as many as 10 hours a day on various platforms. He alleged that excessive use led to insomnia caused by continuous scrolling.

His claimed injuries included social media addiction, severe depression, suicidal thoughts, binge eating disorder, panic disorder and anxiety.

Lawyers representing R.K.C. said he chose to withdraw the claims against Meta “in light of the overall successful result of the litigation and his concerns about enduring a grueling weekslong trial.”

A Meta spokesperson said the plaintiff had dropped the lawsuit without receiving any payment and reiterated that the company would continue defending what it described as “baseless” claims.

Google’s YouTube and TikTok had previously reached settlements with the teenager and his family, while Snap Inc. said earlier this week that it had reached a tentative agreement.

For Meta, avoiding a second Los Angeles trial this summer removes the immediate risk of another major jury loss and limits further public scrutiny over allegations that its platforms encourage addictive behaviour among young users.

“There are lots of things that can come from these trials that aren’t specifically related to literal precedent,” Waldman said. He is also director of the University of California, Irvine’s Center for Technology and Justice.

As litigation expands, companies such as Meta must increasingly deal with public perceptions that their products are designed to be addictive, Waldman said. This could influence user behaviour and encourage additional regulation by state and local governments.

Appeal Becomes Meta’s Next Legal Battle

The dismissal also gives Meta more room to focus on its appeal against the March jury verdict.

Meta and YouTube filed notices of appeal earlier this month, although formal filings have not yet been uploaded to the state appellate court.

Stuart Benjamin, a professor at Duke University School of Law, said he expects the appeal to focus largely on First Amendment protections and Section 230 of the Communications Decency Act.

The companies are likely to argue that features such as infinite scrolling cannot be separated from the user-generated content they display, which is protected speech and therefore shields platforms from liability.

The court may also examine whether features such as automatic playback and endless scrolling can independently be considered addictive, separate from the content itself, Benjamin said.

Meta could find a more favourable setting before a panel of judges than a jury, Benjamin added, as judges may be more receptive to complex constitutional and legal arguments.

Although this particular case has been removed from its immediate trial schedule, Meta continues to face significant legal challenges.

A federal case in the Northern District of California is scheduled to begin in August, involving a group of state attorneys general seeking potentially trillions of dollars in damages over allegations that social media platforms have harmed young users. Separately, jury selection is underway in Tennessee’s state court case against Meta, with the trial expected to continue for several weeks.

The case is R.K.C. v Meta Platforms Inc., California Superior Court, No. 23STCV31485.

 
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New York Times Wins End to Subpoenas in Trump Plane Leak Probe

New York Times Wins End to Subpoenas in Trump Plane Leak Probe

Move comes after legal challenge over press freedom, as administration faces scrutiny over attempts to compel journalists to reveal sources.

US prosecutors have withdrawn subpoenas issued to journalists at The New York Times (NYT) who reported on security concerns surrounding President Donald Trump’s travel on a new Air Force One aircraft donated by Qatar.

A prosecutor from Manhattan US Attorney Jay Clayton’s office informed a federal judge on Thursday that the government would withdraw the subpoenas, which were issued on July 10 as part of an investigation into the alleged leak of sensitive national security information.

The subpoenas were the latest move by the Trump administration to compel journalists to disclose confidential sources in leak investigations — a practice that press freedom advocates have warned could discourage investigative reporting.

US District Judge Arun Subramanian questioned government lawyers for around 90 minutes about procedural issues in the investigation, including the handling of subpoenas seeking reporters’ phone records.

Following the hearing, prosecutor Sean Buckley told the court that the government was “prepared unilaterally to withdraw the subpoenas”, while adding that the investigation remained ongoing and that officials could seek new subpoenas against the journalists in the future.

Clayton, who was nominated by Trump to become the next US Director of National Intelligence, issued the subpoenas after The New York Times reported that Trump had continued using the existing Air Force One aircraft after concerns were raised that the new plane donated by Qatar lacked anti-missile and other defensive systems.

The government argued that the newspaper’s reporting raised a “substantial national security concern” because it involved the alleged disclosure of classified national defence information while the President was travelling during a period of heightened tensions with a foreign adversary, an apparent reference to Iran.

The reports were based on anonymous sources and emerged around the time a ceasefire in the US-Israeli conflict with Iran collapsed.

The New York Times had asked Judge Subramanian to dismiss the subpoenas, arguing that they were improperly issued and violated constitutional protections for a free press under the First Amendment of the US Constitution.

In court filings, the newspaper alleged that the subpoenas were intended to intimidate and harass journalists. It also accused prosecutors of failing to follow internal Justice Department rules governing the use of subpoenas against members of the media, which require such measures to be used only in exceptional circumstances and with senior-level approval.

A Justice Department spokesperson said the investigation was continuing and that the government would prosecute individuals responsible for leaking classified information that threatened national security.

Buckley denied that the subpoenas were improperly issued but acknowledged that the Department of Justice had failed to notify reporters that their phone records had separately been obtained through subpoenas, as required under applicable rules.

Following the hearing, however, The New York Times said the government had effectively acknowledged that the subpoenas violated legal requirements and “should never have been issued”.

In a court filing earlier in the week, prosecutors argued that the First Amendment does not provide journalists with absolute protection from being required to disclose information during criminal investigations.

Growing Battle Over Press Freedom

Both Republican and Democratic administrations have previously sought to compel journalists to reveal confidential sources during leak investigations. However, press freedom organisations have accused the Trump administration of using subpoenas and search warrants against media organisations too aggressively, including actions involving The Washington Post and The Wall Street Journal.

Critics have also alleged that Trump has used government authority and private lawsuits to pressure and intimidate news organisations.

The administration has rejected those accusations, saying its actions are aimed at prosecuting individuals who leak classified information rather than targeting journalists. Trump’s private legal team has separately argued that it is seeking accountability for what it describes as inaccurate media coverage.

 

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US Revives ‘Alien Terrorist’ Court, Setting the Stage for a Lengthy Legal Battle

US Revives ‘Alien Terrorist’ Court, Setting the Stage for a Lengthy Legal Battle

The first-ever case before the court is expected to test the limits of national security law and due process.

The Trump administration faces an arduous legal battle and mounting due process questions as it activates a little-used court designed to hear deportation cases involving suspected non-citizen terrorists, Bloomberg Law reported.

The US Department of Justice’s National Security Division launched proceedings last week before the Alien Terrorist Removal Court (ATRC) and is expected to expand on its application in a sealed submission on Wednesday. It is the first case to come before the court since it was established in 1996.

Congress created the ATRC to conduct individual deportation hearings involving suspected terrorists where the evidence is considered so sensitive that its disclosure could threaten national security.

Successive administrations have refrained from using the court, partly because other legal mechanisms have been available to detain and monitor suspected terrorists, according to former national security officials from the Department of Justice (DOJ) and the Department of Homeland Security (DHS). Other concerns have included the court’s strict requirements for the use of classified evidence and the possibility that individuals could be deported without being allowed to examine the government’s case against them.

“This is essentially stepping into a car that has never run since it was released from the factory legislatively,” said Aram Gavoor, who served as Senior Counsel for National Security at the DOJ during President Donald Trump’s first term and the early part of Joe Biden’s administration.

“Because it’s a series of firsts, naturally the court is going to want to get it right,” Gavoor said.

Judges serving on the long-dormant court are expected to examine the Justice Department’s arguments closely as the administration continues to face broader judicial scrutiny over due process concerns relating to detained immigrants and other legal challenges to President Trump’s deportation agenda, former officials said.

DOJ spokesperson Emily Covington said the department intended to “use every tool available to bring alien terrorists to justice and remove them from the United States, including this court.”

Covington declined to comment further because the case remains under seal and its details are classified.

Dormant History

The administration’s decision to activate the court surprised former DOJ and DHS lawyers, who noted that the federal government has historically relied on alternative counter-terrorism and immigration laws.

When it was created, the ATRC was regarded as a major legislative counter-terrorism initiative. It was modelled on the Foreign Intelligence Surveillance Court, which reviews and authorises government applications for electronic surveillance and other national security measures.

The ATRC consists of five US district court judges appointed by the Chief Justice of the United States. All current members also serve on the Foreign Intelligence Surveillance Court.

Under federal law, the ATRC may approve a removal application if the government establishes that the individual falls within the legal definition of an “alien terrorist” and that pursuing deportation through another legal route would pose national security risks.

A 2004 report by a bipartisan national commission on terrorism found that DOJ lawyers had examined at least 100 potential cases for referral to the ATRC since its creation, but none proceeded.

During the Obama administration, the DOJ’s National Security Division reviewed whether the ATRC could be used to remove members of Al-Qaeda in Iraq living in the United States where proving terrorist links depended on classified evidence, said Chris Hardee, who served as the division’s Chief of Law and Policy from 2013 until last year.

“We concluded that it would not help in any case because, even if we could not pursue terrorism charges, there were criminal and immigration options that avoided relying on classified information, such as immigration fraud,” Hardee said.

He added that those alternatives were “far preferable” to relying on “a novel law in a specialised court that had never heard a case”.

The ATRC’s purpose also runs contrary to the broader philosophy of US counter-terrorism policy, said Thomas Warrick, a former senior DHS counter-terrorism official.

“If we had evidence that somebody was a terrorist, and especially if they’d committed terrorist acts against the United States, the whole purpose was to try to bring them here so they could be prosecuted, convicted and then put in jail,” said Warrick, now with the Atlantic Council.


Once an individual leaves the United States, “you lose oversight over what they’re doing or who their contacts are”, he said.

Logistical Challenges

The Trump administration also faces significant legal and procedural hurdles, particularly in relation to the handling of classified evidence, immigration law analysts said.

Under federal law, classified evidence may only be admitted if the ATRC concludes that the government’s unclassified summary provides sufficient information to enable the individual to prepare a defence.

If the court determines that the proposed summary is inadequate, it may still approve the application and proceed to a hearing, but only if it concludes that both the individual’s continued presence in the United States and disclosure of the summary would cause serious and irreparable harm to national security or to a person’s physical safety.

Lawful permanent residents are entitled to have a special attorney appointed to examine and challenge classified evidence on their behalf.

However, that safeguard does not automatically extend to other non-citizens, raising concerns that some individuals could face deportation without ever seeing the evidence against them, said Margy O’Herron, a former senior immigration adviser in the Biden administration who spent nearly two decades as a DOJ attorney.

As the Trump administration has increasingly relied on rarely used laws to advance its deportation agenda—including the Alien Enemies Act of 1798 — the activation of the ATRC “appears to be the latest weapon in its scorched-earth deportation strategy”, O’Herron said.

The court’s secretive nature also limits public and congressional oversight of the Justice Department, according to Elora Mukherjee, Director of Columbia Law School’s Immigrants’ Rights Clinic.

The only indication of the court’s thinking so far came in a 16 July order requesting additional submissions from the government. ATRC Chief Judge Joan Ericksen stated that the court had questions “about the nexus that the government alleges between the actions of the respondent and the specific sections and subsections it invokes with respect to those actions”.

“The answers persuaded the Court that the Government could benefit from the opportunity for more thoughtful consideration,” Ericksen wrote.

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Investors Bypass Litigation Funders to Directly Finance Legal Claims

Investors Bypass Litigation Funders to Directly Finance Legal Claims

As confidence grows in litigation finance, investors seek greater control, faster deployment and a larger share of returns.

Investors seeking returns from litigation are increasingly bypassing traditional litigation funders and putting money directly into law firms, legal claims and case portfolios, Bloomberg law reported.

By moving away from intermediaries, investors gain greater control over where their capital is deployed and can retain a larger share of potential proceeds when cases succeed. However, they also lose the specialist expertise that litigation funders provide in assessing risks, valuing claims and managing legal investments.

“Everyone is obviously trying to find ways to cut costs and reduce fees,” said Mohsin Patel, co-founder of litigation finance broker Risk Factor Management. Removing the intermediary is “one way they have found they can do that”.

 

The shift reflects growing investor confidence in the complexities of litigation finance, a market that has expanded significantly since the practice emerged in the US three decades ago. Litigation funders, which seek returns uncorrelated with traditional financial markets, committed $2.8 billion to commercial legal claims last year, compared with $2.3 billion in 2024, according to litigation finance broker Westfleet Advisors.

Although the industry does not publish detailed data on investment flows, brokers, funders and consultants say they are seeing a rise in investors choosing to finance cases directly rather than investing through litigation finance funds.

“It is one of the clearest shifts in the market over the last couple of years,” said Jim Batson, chief investment officer of Siltstone Capital’s legal finance strategy.

Recent cases highlight the trend. Court filings revealed that HPS Investment Partners, a subsidiary of BlackRock, provided an advance against a judgment in a high-profile Florida case. JPMorgan Asset Management also provided financing to two mass tort law firms based on expected legal fees.

Direct investment represents a departure from the traditional litigation finance model. Historically, investors participated as limited partners in funds, while litigation finance companies acted as managers, selecting cases and deploying capital.

However, many investors are now moving away from this structure. Kelly Daley, founder of advisory firm Celsia Capital, said institutional investors increasingly want greater involvement in selecting individual opportunities rather than allowing fund managers to make decisions across a portfolio.

“There is a shortage of capital interested” in the traditional structure, Daley said. Investors are attracted to having “front-of-market litigation assets brought directly to them for direct investment”.

Changing Capital Landscape

The traditional commercial litigation finance sector has faced challenges as some investors reduce allocations through conventional channels. According to Westfleet, a relatively small number of established participants drove a 23 per cent increase in new litigation finance commitments in 2025. However, overall investment levels remain below the peak reached in 2022.

“Many funders continue to face significant challenges in raising new capital from investors,” Westfleet said in a March report, adding that these constraints have resulted in more cautious underwriting and selective deployment of funds.

Batson said investors have become increasingly frustrated by the long timelines associated with legal investments before receiving returns.

“That has made allocators wary of blind pools and more comfortable with transactions they can evaluate on their own merits,” he said. “A direct deal allows investors to see exactly what they own.”

Some investors are also partnering with specialist litigation finance managers on individual cases. Rather than committing capital to broad funds, they approach experienced legal finance firms to evaluate specific opportunities and invest alongside them.

Growing Role of Insurance

Despite the growing appetite for direct investment, legal assets remain complex, and inexperienced investors can struggle to accurately assess the value and risks of litigation claims.

“Underwriting litigation is not the easiest thing to do and it is very different from credit underwriting,” said Charles Agee, founder of Westfleet.

To manage risks, many direct investors are increasingly turning to insurance products, said Rebecca Berrebi, a litigation finance and special situations consultant at Litigation Finance Advisors. Insurance provides a more familiar risk assessment framework compared with legal assets.

These policies can protect investors against adverse court outcomes or guarantee minimum returns. Instead of focusing only on legal issues such as the likely duration of a case, investors assess factors such as the insurer’s ability and willingness to pay.

Patel said such insurance products help address concerns over lengthy litigation timelines by guaranteeing returns after a specified period. While premiums can be costly, investors view them as a trade-off for greater stability.

“Capital preservation is kind of the name of the game for them,” Patel said. “They are willing to give up some upside if it means they have protection on the downside.”

 

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Paramount-Warner Bros. Merger Hits Legal Roadblock as Judge Raises Antitrust Concerns

Paramount-Warner Bros. Merger Hits Legal Roadblock as Judge Raises Antitrust Concerns

Court temporarily blocks $110B deal, saying states have raised “serious questions” over its impact on Hollywood competition.

A US federal judge has temporarily halted Paramount Skydance Corp.’s proposed $110 billion takeover of Warner Bros. Discovery Inc., saying the merger could potentially violate antitrust laws.

US District Judge Araceli Martínez-Olguín in Oakland, California, on Monday ordered the companies to delay completion of the deal for 14 days. Paramount and Warner Bros. had been hoping to close the transaction as early as July 22.

California and 11 other states filed a lawsuit on July 13 seeking to block the Hollywood mega-merger. The states argue that combining two of the five largest film studios would reduce competition in film production and cable television distribution.

Paramount said it would continue to “vigorously defend” the transaction.

“We are confident the evidence will demonstrate that the state attorneys general’s antitrust arguments are without merit, as their alleged markets and claims of anticompetitive effects have no basis in modern market realities,” the company said in a statement. “This merger is lawful, pro-competitive, and will benefit consumers, creators, workers and the entertainment industry.”

The judge has scheduled a hearing for August 3 to decide whether the temporary block should be extended. The court will then consider whether the merger should remain on hold until a full trial determines whether the transaction breaches federal antitrust laws.

Paramount had been close to completing the acquisition after receiving approval from the US Department of Justice. European regulators were also expected to clear the deal on July 22, subject to limited concessions.

However, the delay creates significant financial pressure for Paramount. For every day beyond September, the company could be required to pay Warner Bros. shareholders millions of dollars in “ticking fees”. If the court ultimately rejects the merger, Paramount could face a $7 billion termination fee, in addition to the $2.8 billion it paid to Netflix Inc. to withdraw from the bidding process.

Paramount Chief Executive Officer David Ellison has argued that the merger would strengthen the company’s streaming ambitions by combining Paramount+ and HBO Max. Warner Bros.’ major franchises, including Harry Potter, Batman and The Lord of the Rings, were expected to provide additional content for the streaming platforms. Warner’s cable networks, including CNN, HGTV and Discovery Channel, would also become part of the expanded entertainment group.

California has requested a trial date in April 2027. Paramount, however, is seeking a decision on the preliminary injunction before September 30, when the daily payments to Warner Bros. shareholders are expected to begin.

In her ruling, Judge Martínez-Olguín said the states had demonstrated that “serious questions going to the merits remain” in their challenge to the merger.

“This is a critical first win in our case to ensure this mega-merger never sees the light of day,” California Attorney General Rob Bonta said in a statement. He argued that history showed the risks of excessive concentration of market power, including fewer opportunities, reduced competition and lower-quality services.

Shares of Paramount fell as much as 2.2% following the ruling and were down 1.2% at 3.47pm in New York. Warner Bros. shares dropped 3.7% to $25.87.

The states’ lawsuit argues that the merged company would control about 27% of the market for films receiving wide theatrical releases. They also claim the combined entity would control more than 30% of major blockbuster releases — defined as films with large production budgets and broad cinema distribution.

If completed, the merger would leave only four major players controlling more than 90% of the wide-release theatrical distribution market: the new Paramount-Warner Bros. entity, The Walt Disney Company, Universal Pictures and Sony Pictures Entertainment.

“Plaintiffs present compelling evidence that the combined firm resulting from the transaction will possess substantial market share in the wide-release theatrical distribution market,” Judge Martínez-Olguín wrote in her 10-page order. “On this combined firm market share alone, the Court is persuaded that it can presume the proposed merger is likely to violate antitrust laws.”

Under the merger agreement, Paramount has until June 4, 2027, to complete the acquisition. However, it must begin paying Warner Bros. shareholders a daily fee of $7 million from September 30 until the transaction closes.

Paramount has maintained that the merger would help it compete more effectively with technology giants such as Amazon and Netflix in the rapidly changing streaming market. The company has also promised to release at least 30 films in cinemas annually — a commitment the states have challenged as insufficient to address competition concerns.

 
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DOJ Subpoenas Reignite Battle Over Executive Privilege and Big Law

DOJ Subpoenas Reignite Battle Over Executive Privilege and Big Law

The subpoenas have transformed a procedural dispute into a wider constitutional debate over presidential confidentiality.

The US Department of Justice (DOJ) has defended its decision to subpoena 13 leading US law firms, arguing that the move is necessary to safeguard the confidentiality of legal advice provided to President Donald Trump, even as it deepens an already contentious dispute with the American Bar Association (ABA).

According to the DOJ, the subpoenas seek information about communications between the firms and Boris Epshteyn, President Trump’s personal lawyer, reinforcing the department’s argument that the ABA should obtain any relevant information from its own member firms rather than compel testimony from one of the President’s closest advisers.

The subpoenas, first reported by The New York Times, come amid an ongoing lawsuit filed by the ABA challenging what it has described as the Trump administration’s policy of intimidating law firms. The litigation centres on both executive orders issued against several prominent firms and agreements reached with others.

A DOJ spokesperson said the department’s motion is consistent with longstanding constitutional principles protecting a president’s ability to receive confidential legal advice from trusted advisers. The department maintains that compelling Epshteyn to disclose private communications would undermine that principle.

The latest development has once again placed the administration’s relationship with the legal profession under the spotlight. The ABA has alleged that the White House sought to pressure firms through executive actions and negotiations, while the administration maintains that its actions were lawful and aimed at addressing concerns over legal representation and professional conduct.

Court filings identify Epshteyn as a key liaison between the Trump administration and major private law firms. The ABA’s subpoena sought information about discussions surrounding agreements reportedly reached with nine firms, as well as executive orders targeting four others.

Those executive orders attempted to restrict the affected firms’ access to classified information and federal facilities, while also threatening government contracts involving their clients. Four of the targeted firms successfully challenged the measures in court, with federal judges ruling that the orders were unconstitutional. The rulings are now under appeal.

Separately, nine prominent firms — including Kirkland & Ellis, Latham & Watkins and Simpson Thacher — agreed to provide approximately US$940 million in pro bono legal services under arrangements reached with the Trump administration, agreements that have continued to generate debate within the legal community.

The DOJ has now asked the court to quash the ABA’s subpoena issued to Epshteyn, arguing that the confidentiality of presidential legal advice is a constitutional safeguard that extends beyond any individual administration.

The dispute therefore extends beyond a procedural disagreement over subpoenas. It raises broader constitutional questions about executive privilege, the independence of the legal profession and the extent to which government can engage with — or exert influence over —private law firms. With appeals continuing and the ABA’s lawsuit still pending, the case is likely to shape the evolving relationship between the executive branch and the legal profession.

 

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