Update: Cy Pres & SCOTUS

Last October I reported that the Supreme Court granted cert in a case that might have led to a decision regarding complaints that cy pres awards in class action lawsuits wind up funding organizations anathema to the interests of the class. Specifically, I addressed the amicus brief filed on behalf of copyright owners outlining the ways in which, for instance, Google can settle a suit then fund various organizations (EFF, Public Knowledge, et al) that work to undermine copyright law.

Unfortunately, the Supreme Court vacated and remanded the case of Frank v. Gaos back down to the lower courts on a question of standing. So, there will be no decision in the near future on the broader question as to whether cy pres awards too often harm the interests of litigating classes. That said, Justice Thomas, in his dissent, wrote the following …

Whatever role cy pres may permissibly play in disposing of unclaimed or undistributable class funds (citation removed) cy pres payments are not a form of relief to the absent class members and should not be treated as such (including whencalculating attorney’s fees). And the settlement agreement here provided no other form of meaningful relief to the class. … the fact that class counsel and the named plaintiffs were willing to settle the class claims without obtaining any relief for the class—while securing significant benefits for themselves—strongly suggests that the interests of the class were not adequately represented. 

In short, because the class members here received no settlement fund, no meaningful injunctive relief, and no other benefit whatsoever in exchange for the settlement of their claims, I would hold that the class action should not have been certified, and the settlement should not have been approved. 

So, take that for what it’s worth if and when this subject returns to the Supreme Court.

© 2019, David Newhoff. All rights reserved.

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