Martin Redish, joined by Peter Julian and Samantha Zyontz, is coming out with a new article, "Cy Pres Relief and the Pathologies of the Modern Class Action: A Normative and Empirical Analysis." It’s well-researched, and well-written, but I want to address the strategic implications of some of their arguments.
Cy pres relief (from the old Norman, roughly meaning "next best") is a form of relief courts use when they cannot distribute damages to the entire class, either because some class members cannot be found, or because some won’t bother to collect. The defendant sets aside the total amount it will pay, and anything left over after distribution gets donated to an appropriate non-profit that would approximate relief to the class. Cy pres relief has been controversial. Supporters argue that it can enhance deterrence by increasing the defendant’s payout, can provide social good by funding organizations with noble goals, and can help parties agree on larger settlement amounts. Critics argue that cy pres relief is often used to inflate plaintiffs’ attorneys’ fees (which increase with the size of the settlement), and that the "charities" often don’t help the class — they’re frequently law schools or even nonprofits that benefit the defendants.
For defendants, cy pres relief is a mixed blessing. It’s useful in crafting settlements, but plaintiffs in contested class actions may invoke it as a way of persuading a court to certify a procedurally problematic class.
Redish and Co. side squarely with the critics. "In a variety of ways, use of cy pres threatens to create or foster ‘pathologies’ of the modern class action." (By "pathologies," they mean ways in which class actions exceed the legal limitations imposed by the Constitution and the Rules Enabling Act.) Their primary criticism is that class actions are procedural, not substantive devices (a familiar argument for defense counsel). As a result, they argue, cy pres relief shouldn’t be available to class plaintiffs any more than it would be to an individual plaintiff.
It’s an interesting argument doctrinally. But from a pragmatic standpoint, it’s difficult to see who would make it. While plaintiffs have argued for cy pres relief when seeking to certify a class for litigation, they usually invoke it when the parties are settling. At that point, both plaintiffs and defendants have aligned interests (finalizing the settlement), so presumably they’ve both agreed to include cy pres relief.
That leaves objectors. However, most objectors tend to be members of the class action plaintiffs’ bar. (Usually, they’re either plaintiffs from competing class actions, or plaintiffs’ counsel who have a sideline in objecting to class settlements for cash.) In either case, they’re unlikely to raise an argument that might be used against them in the future. There are some tort-reform groups that, for ideological reasons, object to some settlements that include cy pres relief. But, for the most part, Redish’s argument is an intriguing one that practitioners are unlikely to encounter.