Washington Legal Foundation's Working Paper

Authors: James M. Beck Rachel B. Weil

Substantive law does not vest the United States judiciary with the power to take money away from injured litigants and give it to bystanders. Nevertheless, courts routinely do exactly this when fashioning so-called cy pres remedies. “Cy pres” is a French term that roughly translates to “as near as possible.” Courts employ cy pres remedies in the settlement context when—even with no opposition—class counsel cannot or will not identify the class members to whom “damages” are owed. Cy pres thus exists almost solely in litigation situations where the plaintiffs could never have proven who was actually injured, and by how much, by whatever the defendant allegedly did. In such cases, courts often assert control over missing class members’ shares of settlements, seizing these funds and awarding them to third parties—mostly charities—that were not damaged by the defendants and therefore have no legal right to any recovery.

But the era of such judicial overreach may be drawing to a close. The United States Supreme Court has recently taken interest in whether cy pres awards have any legal basis. In Marek v. Lane, the Court denied certiorari in an appeal from the particular features of a cy pres award in a class action settlement. Concurring in that result, Chief Justice Roberts wrote separately to alert the bench and bar that the Court might well have been interested in that case, had the objectors to the settlement challenged the validity vel non of cy pres remedies, rather than the case-specific attributes of a single award:

Granting review of this case might not have afforded the Court an opportunity to address more fundamental concerns surrounding the use of such remedies in class action litigation, including when, if ever, such relief should be considered; how to assess its fairness as a general matter; whether new entities may be established as part of such relief; if not, how existing entities should be selected; what the respective roles of the judge and parties are in shaping a cy pres remedy; how closely the goals of any enlisted organization must correspond to the interests of the class; and so on. This Court has not previously addressed any of these issues.

An opening thus exists for possibly ending cy pres as courts now use it, thereby holding class action plaintiffs to their burden of proving causation and damages. The proliferation of cy pres and its recent use by judges make this practice ripe for review of the “fundamental concerns” to which Chief Justice Roberts alluded.

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