The legal doctrine of cy pres is a French term meaning “as close as possible,” referring in legal terms to the donor or plaintiff’s intentions. With roots in trust law, the doctrine allows for a gift in circumstances where the recipient no longer exists, fulfilling their wish as nearly as possible. In the class action context, the cy pres doctrine allows for the distribution of unclaimed settlement funds to charitable causes, whose causes indirectly benefit the injured class.
In 2018, the Northern District of California United States District Court released updated class action settlement guidelines, including changes to the cy pres approval process. The Courts added a step to preliminary approval that requires counsel to not only identify the cy pres awardee, but also identify any relationship the parties or counsel may have with the proposed recipient. This move toward transparency is evidence of stricter judicial scrutiny, as seen in recent years.
In this white paper, we explore real case law and how it impacts cy pres class action settlement administrations today and where the practice could be headed in the future.
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