North Carolina's Legislative Bait-and-Switch: How HB 315 Transformed from Gift Card Theft Bill to A Full Litigation Funding Ban

The Trojan Horse in the Senate

There's a bill moving through the North Carolina Senate that would fundamentally transform who can access the courts in this state. It's not being debated on the floor. It's not making headlines. And if you looked it up in the legislative database, you'd think it was about stopping gift card thieves.

But you'd be wrong.

House Bill 315—still officially titled "Gift Card Theft & Unlawful Business Entry"—now declares its actual purpose in stark terms: "AN ACT TO PROHIBIT LITIGATION INVESTMENTS IN THE CIVIL JUSTICE SYSTEM, TO PREVENT THE CIVIL JUSTICE SYSTEM FROM BECOMING A FINANCIAL INVESTMENT MARKET." The gift card provisions? Gone. Completely replaced by a sweeping prohibition on litigation funding that would make North Carolina's courts accessible primarily to the wealthy and to the corporations they're suing.

This isn't legislation. It's a lockout dressed up as law enforcement.

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What the Bill Actually Does: Closing the Courthouse Doors

Let me be clear about what HB 315 Edition 3 would do. The bill makes it "unlawful for a person to engage in litigation investment in this State or to furnish litigation investment to a party or counsel of record in a civil proceeding in this State." Period. Full stop.

The bill defines "litigation investment" as "the provision of money, whether as a direct payment, advancement, loan, investment, or otherwise, for the fees, costs, and expenses of or related to a pending or potential civil proceeding in exchange for a right to receive repayment or other consideration that is contingent in any respect on the outcome of the pending or potential civil proceeding."

Read that again. Any money advanced for litigation expenses that gets repaid based on whether you win your case is now illegal in North Carolina.

The exceptions carved out are telling in their narrowness: contingency fee lawyers (which many cases can't support), insurance company obligations (which only defend policyholders), nonprofit legal aid (chronically underfunded and oversubscribed), direct loans not contingent on case outcome (which no rational lender would make for high-risk litigation), and family members. That's it.

If you're a worker whose employer stole your wages and you need $50,000 to hire experts to prove your case, but you don't have $50,000 and your family doesn't either, and no lawyer will take it on contingency because the case requires too much upfront cost—you're out of luck. The courthouse door is closed to you.

If you're a small business whose patent was infringed by a Fortune 500 company, and you need financing to pursue the case through litigation, but you're barely making payroll as it is—sorry. That company can steal your invention with impunity because the law now says no one can help you afford to enforce your rights.

This is what HB 315 does. It doesn't stop "predatory" anything. It stops justice. It stops ordinary people from having any chance against well-funded opponents.

The Fear-Mongering Justification: National Security Theater

The bill's authors knew they needed cover for what amounts to a wealth-based lockout of the courts. So they wrapped it in the flag.

The bill's "findings" read like something from a spy thriller. It claims that "litigation investment presents a threat to national security by allowing undisclosed foreign persons and entities to invest in domestic legal claims." It warns that "hostile foreign actors are able to impact the integrity of our court system, undermining our self-government, extract resources from economic competitors" and "obtain sensitive commercial information and intellectual property through the discovery process."

Let's be honest about what this is: fear-mongering designed to justify closing the courts to everyone but the wealthy. The bill provides zero evidence that foreign actors are funding litigation in North Carolina. Zero evidence of any actual national security threat. Zero examples of cases where this has occurred.

And most important: the bill is not limited to foreign actors, foreign funders, or anything "foreign."

In fact, foreign defendants (read large Chinese companies that pollute natural resources and create irreversible destruction) are given a free pass to do more damage, while making sure Anne-Victoireerage Americans cannot access the courthouse.

What we do know is who benefits from making it impossible for ordinary people to sue: large corporations, insurance companies, and anyone with deep enough pockets to outlast an opponent in court. These are the same interests that have pushed similar bills in state after state, always with the same national security fig leaf.

The bill declares that "legal claims and courthouses in this State are not financial markets for investments and are not vehicles for third parties to profit by financing a party to a civil proceeding." How noble. How principled. And how utterly divorced from reality.

Because here's what the bill's authors don't mention: defendants in civil cases have always had access to unlimited funding. A corporation being sued can spend $10 million defending itself with no restriction. It can hire fifty lawyers, retain dozens of experts, depose every witness for days on end, and file motion after motion—all funded by its corporate treasury or its insurance company.

But if a worker who was illegally fired wants someone to advance $25,000 so he can prove his case, that's suddenly a "threat to the integrity of the civil justice system"? That's when we need to invoke national security concerns? The double standard is not a bug. It's the entire point.

The Gift Card Bait-and-Switch: Legislative Deception

Here's how we got here, and it tells you everything you need to know about whether this bill was designed to withstand public scrutiny.

On March 5, 2025, Representative Pyrtle filed House Bill 315. It was straightforward criminal legislation designed to crack down on retail crime. The bill would have created new offenses for unlawfully entering restricted areas of businesses and for gift card theft—a growing problem where thieves steal gift card information, return the cards to store shelves, and drain the funds after unsuspecting customers activate them.

This was good, commonsense legislation. AARP North Carolina endorsed it. Retailers supported it. Consumer protection advocates backed it. On March 26, 2025, the House passed it unanimously—every single representative voted yes. It then moved to the Senate.

And then something happened.

In the Senate Judiciary Committee on June 18, 2025, Edition 3 was created. Every word about gift cards was deleted. In its place appeared this comprehensive ban on litigation funding, wrapped in national security rhetoric and decorated with some workers' compensation increases (presumably to provide political cover).

The short title in the tracking system? Still "Gift Card Theft & Unlawful Business Entry." A legislator glancing at the calendar wouldn't know that the bill they voted for unanimously had been gutted and replaced with something completely different. A constituent checking their senator's voting record would have no idea their representative had voted to close the courthouse doors to ordinary people.

This is not how a democracy is supposed to function. When proponents of legislation know it can't survive on its own merits, they hide it inside something else. They rely on confusion, misdirection, and the hope that no one will read the actual text of the bill.

The Real-World Impact: Justice Only for Those Who Can Afford It

Let me tell you who gets hurt when litigation funding is banned:

• The whistleblower who reports corporate fraud discovers evidence that her employer is defrauding the government. She's fired in retaliation. She has a strong case, but it will cost $100,000 to prosecute—depositions, expert witnesses, document review. She makes $60,000 a year and has $2,000 in savings. No lawyer will take this on pure contingency because the upfront costs are too high. Under HB 315, no one can advance her those costs in exchange for a share of any recovery. Her case never gets filed. The fraud continues.

• The injured patient whose surgeon operated while impaired suffers permanent disability. Medical malpractice cases require extensive expert testimony—often $75,000 or more just in expert fees before the case even goes to trial. The patient was a construction worker. He's now disabled, with no income. His family is struggling. Under HB 315, no one can provide the funding needed to pursue the case unless it's a gift with no expectation of repayment. His case never gets filed. The surgeon keeps operating.

• The individual inventor who developed breakthrough smartphone camera technology, has valid patents, clear infringement by Apple, Samsung, and Google, but faces $4-20 million in litigation fees and expenses with no way to fund the case

• The small software company that develops innovative technology discovers that a Fortune 500 tech giant has copied their software. They have the patents. They have the evidence. But patent litigation costs $500,000 to $2 million. The tech giant knows this. They know the small company can't afford to enforce its rights. Under HB 315, no litigation funder can level the playing field. The small company folds. Innovation is stifled. The big company wins through attrition.

• The elderly couple who invested their retirement savings based on fraudulent representations by a financial advisor lose everything. They have a clear case of securities fraud. But securities litigation is complex and expensive. They're living on Social Security. Under HB 315, they have no path to justice. The fraudster keeps their money and finds new victims.

• The worker whose employer steals wages through systematic misclassification of workers as contractors. It's a pattern affecting hundreds of workers, but no individual claim is large enough to attract a contingency fee lawyer. A collective action could recover millions, but it requires $150,000 in upfront costs to identify class members, compile wage data, and retain labor economists. Under HB 315, no one can fund this case. The employer continues stealing wages with impunity.

  
  

This is what HB 315 means in practice. Not abstract policy debates about the proper role of litigation funding. Real people. Real injustices. Real denial of access to the courts.

The Myth of "Frivolous" Litigation

Proponents of litigation funding bans love to talk about "frivolous" lawsuits and "predatory" practices. The bill itself claims that "litigation investors unnecessarily prolong proceedings in pursuit of profits and prevent settlement based on non-monetary terms."

This is nonsense, and anyone who understands how litigation funding works knows it.

Litigation funders are businesses seeking returns on investment. They employ teams of both in-house and outside lawyers to evaluate cases before funding them. They fund only the few cases they believe have merit and will result in recovery. A funder that systematically invested in weak cases would go bankrupt—there's no return on investments in lawsuits you lose.

The idea that funders reject reasonable settlements is particularly absurd. Funders want to be repaid as quickly as possible. A reasonable settlement means the funder recovers its investment plus returns without the risk and expense of trial. Funders have every incentive to encourage reasonable settlements.

What's actually happening? Funders help plaintiffs reject inadequate settlement offers that defendants make knowing the plaintiff is desperate and running out of money. That's not preventing reasonable settlement. That's preventing coerced settlement. There's a difference.

And let's talk about who really "unnecessarily prolongs proceedings." It's not plaintiffs with limited resources. It's defendants with deep pockets who can afford to file motion after motion, demand extension after extension, and drag out discovery for years—all strategies designed to exhaust the plaintiff's resources and force them to abandon meritorious claims or accept pennies on the dollar.

HB 315 does nothing to prevent defendants from using unlimited resources to overwhelm plaintiffs. But it criminalizes helping plaintiffs have enough resources to fight back. The asymmetry is intentional.

Who Really Benefits: Follow the Money

Let's be clear about the economic interests behind bills like HB 315. This isn't a grassroots uprising of concerned citizens worried about the integrity of the court system. This is a coordinated campaign by business lobby groups, insurance companies, and corporate defense firms to tilt the playing field even further in their favor.

The U.S. Chamber of Commerce Institute for Legal Reform has made opposition to litigation funding a top priority. Why? Because litigation funding enables plaintiffs to pursue cases that would otherwise be impossible for the non-wealthy. It allows workers, consumers, and small businesses to hold large corporations accountable when they'd otherwise be priced out of justice.

Defense-side law firms benefit from litigation funding bans because it means fewer cases filed against their corporate clients and more leverage in the cases that are filed. "Sorry, your client is running out of money" is a powerful negotiating position when you're defending a defendant with unlimited resources.

Insurance companies benefit because litigation funding helps plaintiffs in personal injury, medical malpractice, and product liability cases—exactly the cases where insurance companies are on the hook for damages. Make it harder for injured people to prosecute these cases, and insurance companies pay out less.

None of these groups will admit this is about protecting their bottom lines at the expense of ordinary people's access to justice. Instead, they talk about "integrity of the court system" and "preventing commercialization of justice" and—when they really want to shut down debate—"national security concerns."

But the money tells the real story. Look at who's lobbying for these bills. Look at who's funding the campaigns of legislators who support them. You won't find consumer protection groups. You won't find civil rights organizations. You won't find small businesses or working families. You'll find the same corporate interests that have opposed every measure to hold them accountable for decades.

The Broader Attack on Civil Justice

HB 315 isn't happening in isolation. It's part of a broader, decades-long effort to dismantle the civil justice system in America.

We've seen caps on damages in medical malpractice cases, preventing severely injured patients from full recovery. We've seen forced arbitration clauses that strip away the right to sue. We've seen class action restrictions that make it impossible to hold corporations accountable for widespread harm. We've seen rollbacks of consumer protection laws, weakening of employment discrimination protections, and limits on punitive damages.

Every one of these measures has been sold as "tort reform" or "preventing lawsuit abuse." Every one has been pushed by the same corporate lobby groups. And every one has had the same effect: making it harder for ordinary people to hold powerful interests accountable through the legal system.

Banning litigation funding is just the latest weapon in this arsenal. And it may be the most effective, because it doesn't require changing substantive law. Your rights remain on paper. You just can't afford to enforce them. The end result is the same—corporate immunity in practice, if not in law—but it's harder to fight because technically your rights still exist. You're just too poor to use them.

This is the ultimate perversion of the rule of law. Justice is theoretically available to all, but actually available only to those who can afford it.

What This Means for Democracy

Access to courts isn't just about individual disputes. It's fundamental to democracy and the rule of law. Courts are where workers enforce workplace protections. They're where consumers hold companies accountable for defective products. They're where citizens challenge government overreach and discrimination. They're where whistleblowers expose fraud and corruption. They're where small businesses protect their intellectual property from theft by larger competitors.

When courts become accessible only to the wealthy, all these protections become theoretical rather than real. A right you can't afford to enforce isn't really a right at all.

The consequences ripple outward. Companies know they can violate the law with impunity if their victims can't afford to sue. Employers can steal wages, knowing workers lack resources for litigation. Corporations can commit fraud, knowing that banning litigation funding ensures most victims will never be able to prosecute claims. The deterrent effect of the legal system disappears when only the wealthy can access it.

This is how you get a two-tiered system of justice: one set of rules for those with resources, another for everyone else. It's the definition of oligarchy—rule by the wealthy—masquerading as law and order.

The Hypocrisy of the "Anti-Commercialization" Argument

Perhaps the most galling aspect of HB 315 is its high-minded rhetoric about preventing the "commercialization" of justice. The bill declares that "legal claims and courthouses in this State are not financial markets for investments."

Really? Let's talk about commercialization.

Is it not commercialization when corporations budget millions for litigation as a cost of doing business? When they staff entire departments with in-house counsel whose job is to defend against lawsuits? When they retain law firms on annual retainers to be ready for litigation? When they purchase liability insurance specifically to fund defense of lawsuits? When they calculate that it's cheaper to pay modest settlements than fix dangerous products?

Defendants have always treated litigation as a financial calculation. They have unlimited access to capital for defense. They can spend $10 million defending a case if they calculate it's worth it. They can hire the most expensive lawyers, retain the best experts, and outlast any opponent through sheer financial attrition.

But when a plaintiff wants access to capital to level the playing field—that's suddenly commercialization that threatens the integrity of the system?

The principle being asserted here is that defendants should have unlimited access to funding while plaintiffs should only have access to what they personally can afford. In what universe is that justice? In what system of law is that fair?

The answer is: it's not about fairness. It's about power. HB 315 is designed to preserve and extend the advantage that well-funded defendants already have. The "commercialization" rhetoric is just cover for what amounts to economic discrimination in the courts.

The False Choice: Disclosure vs. Prohibition

There's a legitimate policy debate to be had about litigation funding. Should funders be required to disclose their involvement? Should there be regulations about funder influence on case strategy? Should courts have visibility into funding arrangements that might present conflicts of interest?

These are reasonable questions. Some states have chosen disclosure requirements and regulatory frameworks rather than outright prohibition. These approaches allow litigation funding to serve its access-to-justice function while providing transparency and oversight.

But HB 315 doesn't take that approach. It doesn't regulate, it doesn't require disclosure, it doesn't set standards. It bans. Completely. With penalties of up to $50,000 per violation plus treble damages.

Why? Because the goal isn't to address legitimate concerns about transparency or conflicts of interest. The goal is to eliminate litigation funding entirely. To make sure that only defendants—and the small number of plaintiffs who are independently wealthy or have slam-dunk contingency cases—have access to adequate resources for litigation.

If the concern were really about foreign actors influencing litigation, the solution would be disclosure requirements and restrictions on foreign investment—like we have in many other sectors. But that would still allow domestic litigation funding to exist, which defeats the real purpose.

If the concern were really about funders interfering with attorney-client relationships, the solution would be regulations prohibiting such interference and establishing ethical guidelines—not a blanket ban that eliminates funding for everyone. The fact that HB 315 chose prohibition over regulation tells you everything you need to know about its true goals.

What Needs to Happen

First, this bill needs to be defeated. The Senate should reject it outright, and if it somehow passes the Senate, the House should refuse to concur with the amendments. (Though I have little confidence that will happen, given how this bill has been handled so far.)

Second, this bill should be retitled honestly. If legislators want to vote to close the courts to everyone but the wealthy, fine—but do it under a bill actually titled "Close Courts to Non-Wealthy Act" so voters know where their representatives stand.

Third, North Carolinians need to understand what's being done in their name. The average citizen has no idea this bill exists. The media coverage has been virtually nonexistent. This is happening in the shadows, exactly as designed. Sunlight is the best disinfectant.

Fourth, we need to have an honest conversation about access to justice in this country. The civil justice system was never supposed to be a playground for the rich. It was supposed to be the way ordinary people could hold powerful interests accountable. When we make justice contingent on wealth, we undermine the rule of law itself.

The Bottom Line

House Bill 315 is a moral obscenity dressed up as policy.

It takes a functioning tool for access to justice—litigation funding that allows ordinary people to pursue valid claims against well-funded opponents—and criminalizes it. It wraps this denial of access in flag-waving rhetoric about national security, providing zero evidence of any actual threat. It perpetuates a system where defendants have unlimited resources while plaintiffs are limited to what they personally can afford. And it does all this while hiding behind a misleading short title about gift cards, hoping no one will notice.

The bill's authors declare that North Carolina's courts "are not a financial market but [are] an instrument of justice." They're right about one thing: courts should be instruments of justice. But justice that's available only to those who can afford it isn't justice at all. It's just another commodity, priced out of reach for ordinary Americans.

If HB 315 becomes law, North Carolina will be closing their courts to anyone who isn't wealthy.

Workers whose employers violate the law will have no recourse. Consumers harmed by defective products will go uncompensated. Small businesses whose intellectual property is stolen by larger competitors will have no remedy. Whistleblowers who expose fraud will be silenced. Victims of discrimination will be forced to accept whatever crumbs defendants offer in settlement, knowing they can't afford to proceed to trial.

This is what access to justice dies looks like. Not with public debate or honest reckoning, but with procedural maneuvering, misleading titles, and high-minded rhetoric about the integrity of the court system from the same interests that have spent decades trying to dismantle it.

The question for North Carolina legislators is simple: Do you believe in equal justice under law, or do you believe justice should be available only to those who can afford it?

The answer will be revealed in how they vote on HB 315. And North Carolinians should remember it.