Meyers et. al v State of Texas, et. al. Ordered $9 million in cy pres to organizations serving Texans with disabilities, of which $2.6 million went to legal aid programs.
Articles and cases making the case for cy pres residuals generally:
Hughes v Kore of Indiana Enterprises, 2013 WL 4805600 (7th Cir. 2013).
Endorses cy pres in a consumer protection case even when payments not possible to class members, noting that class actions have a deterrent as well as compensatory objective.
States Provide Model for Handling Controversial Class Action Awards, Catherine Weiss, Michael Hahn and Andrew S. Zimmerman, The National Law Journal, 11-25-2013.
Suggests state rules and statutes as model for a federal rule; while not stated in article, this argument is equally applicable to using state rules and statutes as persuasive authority and proposed models in federal court cases.
In re Baby Products Antitrust Litigation (3rd Cir. 2012) – Third Circuit gives good background on cy pres doctrine generally and rejects broad-based challenges to use of cy pres awards, but overturned proposed cy pres award in that case based on settlement providing insufficient funds to class members
Lupron Marketing and Sales Practices Litigation (1st Cir. 2012). The ruling was the first time the First Circuit addressed "the procedural and substantive standards for distribution" of such funds under the cy pres doctrine. However, the court expressed some unease over the propriety of federal judges making such distribution decisions, rather than approving proposals from the parties in the case.
Recent cases that discuss limitations on cy pres awards that may impact the ability of legal aid to obtain cy pres residuals in some instances:
Marek v Lane (Facebook), Petition for Writ of Certiorari, 571, U.S. (2013). Denial and comment from Chief Justice John Roberts.
In case involving unusual set of facts unrelated to legal aid, Supreme Court refused to take case but issued opinion expressing concern with cy pres generally and suggesting they might have more to say in a future case.
Holtzman v Turza, 728 F.3d 683 (7th Cir. 2013). Court vacated remedial order that would have in part provided a cy pres award to a legal aid program.
In opinion where cy pres award was held to be premature and case remanded to lower court for further consideration, some negative commentary on cy pres awards. Important to note that this case involved an award that was after a verdict in the case, a different scenario than the more typical cy pres award that is part of a voluntary settlement. Also, the negative commentary is non-binding dicta and 7th Circuit has other cases supporting cy pres, including the Hughes case that came out shortly afterwards.
Brief of Amici Curiae Texas Access to Justice Foundation, Texas Access to Justice Commission, and Texas Appleseed, Highland Homes Ltd v State of Texas. On petition for review from the Eighth Court of Appeals, El Paso, Texas Cause No. 08-10-00 215 CV. Court of Appeals overturned a cy pres award and held that any residual settlement funds must escheat to the State under Texas’ Unclaimed Property Act.
Brief arguing against idea of escheat to state as an alternative to cy pres award.
Oetting v Green Jacobson (Appellate Case 13-2620, pending in 8th Circuit)
Nachshin v AOL, LLC, 663 F. 3rd 1034 (9th Cir. 2011). Ninth Circuit overturned cy pres award (which included a legal aid organization as a beneficiary) primarily based on the fact that the distribution did not take into account the broad geographic distribution of the class.
Dennis v Kellogg (9th Cir. 2012). Ninth Circuit overturned award because settlement did not identify recipients or set forth any limiting restriction on those recipients and because attorneys’ fees were excessive.
Cy Pres Awards in Other Types of Proceedings or Instances:
Bankruptcy Court
In re Xpedior Inc., 354 B.R. 210 (N.D. Ill. 2006). $707,000 in surplus remaining in bankruptcy case after all claims were paid was distributed to five charities, including three legal aid entities.
In 2010, a Cook County (Chicago) Judge ordered one of the parties to pay $1.1 million as a sanction for violating a previous court ruling to preserve documents in a lawsuit, and used Illinois cy pres statutes as a model for designating recipients of the funds. CARPLS, a Chicago legal aid organization, received half of the funds.
Awards to legal aid in cases that are not contingent on residuals:
Logan, et al v. Firstar, No. 3-02-0681(Tenn. Mid. Dist. Ct.) - A federal class action filed in TN over discriminatory lending practices produced $150,000 for the Minneapolis Legal Aid Society, to fund two years of client education on consumer credit financing.
Cases that awarded cy pres funds to multiple legal aid entities (examples of methods of distribution):
Synthroid Marketing Litigation, U.S. District Court for the Northern District of IL, 2011. Cy pres distribution in a national class action lawsuit regarding pharmaceuticals, with mix of local and national legal aid organizations receiving share of award as well as other organizations related to health issues involved in case.
Susan Miller, et al. v Royal Maccabees Life Ins. Co; Circuit Court of Cook County, IL, 2008. Cy pres distribution in a national class action settlement involving a rate increase on life insurance policies. IL legal aid programs received $1.8 million; another $1.8 million was distributed to 111 LSC-funded programs around the country. Get Appendix
Summary of Legislation and Court Rules Providing for Legal Services to Receive Cy Pres Residuals, compiled by Meredith McBurney for the ABA Resource Center for Access to Justice Initiatives. Get Document
Samples of general informational materials:
Website Entries
Template language for legal aid organization websites, prepared by Chicago Bar Foundation
