Cy pres is a doctrine used in class actions to handle settlement monies which are unclaimed by class members after distribution is finished. Class actions are very complicated lawsuits. They are usually filed when a large company (or a large organization such as the government) has committed an alleged wrong of a small amount, but against a large group of people. For example, a national bank deducts a $4.50 “check processing fee” from the accounts of all its customers (over 2 million persons)—even though the bank’s contract with the customers states checks will be processed without fee. What customer can afford to sue over $4.50, but the bank has wrongfully taken over $9 million from this group. Or, a national car rental company adds a $15.00 charge to the bill of all its customers (over 2 million persons) for “refueling”, even when the customer brings the car back full and the company does not refuel the car. What customer can afford to sue over $15, but the car rental company has wrongfully taken over $30 million from these people. The U.S. Supreme court permitted the use of a class action in cases of this type—a suit by one member of the group, to allow the court to give relief to the entire group.Because class actions take years to resolve, when it is time to give back the wrongfully taken monies, many class members cannot be found. Some have passed-away. Others have moved or remarried. It would not be fair to allow a defendant to keep the class member’s monies, but with no other place for it, that is where it goes in nearly all class actions—back to the defendant.
To address this situation, courts are using an ancient legal doctrine from the third century called cy pres. Cy pres means “as nearly as possible.” It allows the court—or the parties by agreement—to put a beneficial use to monies, where the payment as intended has not been made.
Mission, history, and accomplishments Cy pres has been around for centuries, but its use in class actions has not been widespread. That may be because it does not increase the attorney fees which the class counsel receives if they use it and instead requires much more time to fairly resolve the case. It may also be because judges or parties are not familiar with it.
Regardless, even limited use of the doctrine has recently provided millions of dollars to charities. This money has saved key charities or their main programs from closing in many cities. The cy pres funds have allowed new programs to be started to help entire new groups of people and whole neighborhoods who were forgotten—not from lack of desire but from lack of funds. The cy pres monies have expanded charity services, so instead of having the resources to serve one hundred homeless people, over one thousand got a hot meal, and a warm bed.
A heartwarming example of the success of cy pres is the fight against cystic fibrosis. This disease prevents the lungs from working properly and without constant, intensive treatment—at least 3 times each day—massive infection will result, followed by death. Even with full treatment, CF patients in the 1980’s only lived into their teens or 20’s. But the news is not all bad. Research funds have allowed scientists to battle this killing disease so now; kids with CF are living into their 30’s and 40’s. At a recent event where a cy pres check for over $180,000 was presented to CF for more research and treatment, a 10 year old CF victim named Sarah (a pseudonym) put her arms around the presenter and said, “Thank you, Mister. You are going to save my life.”
Because cy pres can actually save lives, it is a practice that must be spread all over our country. Justice can do more. The children and all others in need deserve no less.