## Facts

- A natural gas drilling rig fire in offshore Nigeria allegedly caused environmental harm affecting a Nigerian fisherman and a putative class of Niger Delta residents and workers.
- The plaintiff alleged reduced fishing yields, damaged equipment, and illness from polluted air and water, and sought compensatory and punitive damages under various tort theories and Nigerian law.
- The case proceeded as a putative class action; plaintiff’s counsel were solo practitioners who relied on third-party litigation funding to prosecute the matter.
- During discovery, the defendant sought the litigation-funding agreement and related materials to evaluate adequacy of representation and potential conflicts in connection with anticipated class certification.
- The plaintiff produced a heavily redacted funding agreement and sought to file funding-related materials under seal; the plaintiff also moved for sanctions based on the defendant’s funding-related discovery efforts.

## Issues

1. Whether third-party litigation-funding documents, including the funder’s identity and terms affecting control, settlement, resources, and conflicts, were discoverable as relevant to Rule 23 adequacy and local disclosure obligations.
2. Whether the litigation-funding materials should be filed under seal rather than on the public docket.
3. Whether sanctions were warranted against the defendant for pursuing litigation-funding discovery.

## Decision

- Granted in part the defendant’s motion to compel, ordering production of an unredacted funding agreement and related documents to the extent they bore on counsel’s adequacy, resources, and potential conflicts, with limited protection for any genuine attorney work product.
- Denied the plaintiff’s administrative motions to seal, allowing at most narrowly tailored redactions for truly sensitive material rather than wholesale sealing.
- Denied the plaintiff’s motion for sanctions.

## Legal Principles

- Discovery under Federal Rule of Civil Procedure 26(b)(1) extends to nonprivileged matter relevant to any party’s claim or defense; in a putative class action, relevance includes information bearing on Rule 23 certification requirements.
- Under Rule 23(g), courts consider “the resources that counsel will commit to representing the class,” making third-party funding arrangements discoverable when they materially bear on counsel’s ability to litigate and on independence from third parties.
- Litigation-funding materials may be discoverable to assess conflicts and compliance with disclosure rules requiring identification of entities with a financial interest in the subject matter or outcome of the litigation.
- The existence and basic terms of a funding agreement, including funder identity and provisions affecting control or settlement, are not categorically protected by attorney-client privilege or work-product doctrine; protection may apply only to specific opinion work product reflecting counsel’s mental impressions or legal theories.
- Sealing requires a particularized showing under applicable Ninth Circuit standards; generalized confidentiality concerns do not justify sealing funding arrangements central to adequacy of representation, and targeted redactions are favored over blanket sealing.
- Sanctions are not appropriate where the challenged discovery requests pursue legitimately relevant information within the permissible bounds of discovery practice.

## Conclusion

The court required limited disclosure of third-party litigation-funding information because it was relevant to class counsel’s adequacy, resources, and potential conflicts, refused broad sealing absent a concrete showing, and found no basis to sanction the defendant for seeking that discovery.


Gbarabe v. Chevron Corp., No. 14-cv-00173-SI, 2016 WL 4154849 (N.D. Cal. Aug. 5, 2016)