The United States stands at a pivotal moment in our energy journey. That’s especially true in Louisiana, where the state’s rich natural resources have made it a cornerstone of America’s energy landscape.

As we strive toward greater energy independence, we must address a growing danger that threatens not just Louisiana’s energy producers but the nation’s energy security: abusive litigation, potentially funded by foreign entities, that is flooding the courts.

In courts nationwide, investors are financing lawsuits against American companies. This time-consuming and wasteful practice poses an obvious threat to our security. Investor-funded litigation gives foreign competitors a way to use our courts to weaken critical industries and force innovative companies to expend resources, either settling a baseless claim or defending themselves against a costly jury verdict.

For those who finance litigation, lawsuits are a key part of their growing portfolios of stocks, bonds and other securitized investments. This business model turns the American justice system on its head — treating litigation not as a way to right wrongs through the courts but as a new way to generate profits.

Litigation investment has grown into a multibillion-dollar industry as more and more well-heeled hedge funds and other entities hope to generate inflated returns. In most federal courts plaintiffs are not required to disclose outside sources of funding, so these investors can operate in secrecy and shield themselves from repercussions.

Fortunately, Louisiana lawmakers are leading the way in fighting back against this growing menace. Last year, Speaker of the House Mike Johnson and Sen. John Kennedy introduced the Protecting Our Courts from Foreign Manipulation Act. This legislation will ban sovereign wealth funds and foreign governments from bankrolling lawsuits in U.S. courts and requires that individuals and other foreign entities investing in lawsuits disclose their identities.

This badly needed legislation would go a long way toward fixing what’s broken. In the District Court of Delaware, which already requires plaintiffs to disclose investor arrangements, we recently learned that a Chinese firm is bankrolling four separate lawsuits targeting American companies. There’s no telling how much foreign meddling we would uncover if more courts required this level of disclosure.

The threat of frivolous litigation targeting strategic industries is a national problem, but it is bound to come home to roost in Louisiana where the oil and gas industry supports nearly a quarter-million productive, good-paying jobs and generates $73 billion in economic activity annually. Louisiana’s 15 oil refineries account for nearly one-sixth of the nation’s refining capacity, with the ability to produce 2.9 million barrels of crude oil daily.

Groups like the U.S. Chamber of Commerce Institute for Legal Reform have pointed out that strategically important industries like energy are at risk of manipulation through investor-funded litigation, including the vulnerability of foreign competitors accessing sensitive information through lawsuits. What’s more, meritless litigation can easily slow innovation and investment in developing new energy technologies, which are essential as the United States transitions from traditional sources of energy production. 

It’s not hard to understand how the constant threat of litigation from foreign competitors and adversaries makes it much harder for energy producers to do their jobs.

There is a clear, urgent need for greater transparency in litigation funding, which is particularly relevant to identify and regulate foreign funding sources. Disclosure should be the law of the land. With all the dangers and threats we face, anything less is unacceptable.

Now is the time to protect American innovation, support our energy producers and secure our energy future. Litigation financing transparency is not just a legal issue; it’s an economic imperative and a matter of national security.