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University Antitrust Case Tests Boundaries of Litigation Funding Transparency

By  |  October 9, 2025
University Antitrust Case Tests Boundaries of Litigation Funding Transparency

A high-profile antitrust case targeting some of the United States’ most prestigious universities has escalated into a battle over the integrity of the plaintiffs’ legal representation and the role of litigation funding in class actions. According to Reuters, the dispute before U.S. District Judge Matthew Kennelly in Chicago hinges on whether the lawyers representing more than 200,000 current and former students are “adequate” under federal class action rules.

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    The plaintiffs accuse the universities of illegally favoring applicants from wealthy backgrounds while disadvantaging those seeking financial aid. Law firm Gilbert Litigators & Counselors (GLC) recently filed a response asserting that the universities had mischaracterized its use of third-party litigation funding. The firm argued that the schools’ claims were a “contrived” effort to discredit GLC and block class certification, per Reuters.

    GLC maintained that it accurately disclosed its contingency-based arrangement and the risks involved, stating that no precedent exists where a firm was deemed inadequate due to reliance on external funding. The plaintiffs’ filing also revealed that GLC’s funding covers only 40% of its own fees and less than 16% of the total legal fees incurred by all firms involved in the case. “Under the funding arrangements at issue here, the firm and the funder are jointly incurring the risk of loss and delay,” the filing said, according to Reuters.

    Read more: Judge Dismisses Tuition Collusion Case Against 40 Elite US Universities

    Litigation funders provide capital to law firms or plaintiffs in exchange for a share of any eventual settlement or judgment. While questions of transparency and influence have surfaced in other legal contexts, the current case appears to break new ground by linking funding arrangements to the adequacy of class counsel. Legal expert Stephen Younger, who is not involved in the case, described the situation as “a new twist,” Reuters reported.

    So far, twelve of the universities originally named in the lawsuit—including Vanderbilt, Northwestern, Dartmouth, and Columbia—have agreed to pay nearly $320 million to settle, while denying any wrongdoing. The plaintiffs’ lawyers asserted in a separate filing that they met all standards of adequacy and “achieved extraordinary results over strenuous opposition.” They added that the defendants had “fallen far short of the standards for showing they are inadequate.”

    In a separate development in the legal industry, Frost Brown Todd announced a merger with New Jersey-based firm Gibbons, forming FBT Gibbons, a combined entity of around 800 attorneys across 25 offices. According to Reuters, the deal, effective January, follows a wave of law firm mergers this year, including McDermott, Will & Emery’s tie-up with Schulte Roth & Zabel.

    Meanwhile, the legal tech sector continues to attract major investment. Two startups serving plaintiff-side law firms—EvenUp and Eve—have secured $150 million and $103 million respectively, pushing their valuations to $2 billion and $1 billion.

    Source: Reuters