Is Cy Pres Defensible?

Cy pres is the practice of awarding class-action settlement funds to third-party organizations when distribution of settlement funds directly to class members is considered impractical. Champions of cy pres awards – which can amount to tens of millions of dollars – claim that the practice directly aids the causes in question. They also note its convenience and the importance of deterrence. Cy pres critics contend that such awards lead to conflicts of interest, the failure of class attorneys to prioritize class recovery, and First Amendment concerns over the compelled support of political beneficiaries. By a 6-5 vote, the Eighth Circuit recently declined en banc review of an opinion affirming approval of a Monsanto settlement that paid $16 million to cy pres while leaving 98% of the class uncompensated. The Second Circuit affirmed approval of a settlement with Navient that paid the class of student debtors nothing with all settlement proceeds going to a few nonprofits affiliated with the teachers' union funding the class action. Both courts rejected objectors' First Amendment and Rule 23 arguments, and both cases are now the subject of cert petitions.Ted Frank, who argued Frank v. Gaos and is counsel of record in St. John v. Jones and Yeatman v. Hyland, and Brian Fitzpatrick, author of The Conservative Case for Class Actions, will debate the pros, cons, and legality of cy pres and discuss possible Supreme Court review.Featuring:--Theodore "Ted" Frank, Director of Litigation & Senior Attorney, Hamilton Lincoln Law Institute--Brian T. Fitzpatrick, Milton R. Underwood Chair in Free Enterprise, Vanderbilt University Law School