The term cy pres is derived from the
term “cy pres commé possible,” meaning “as near as possible.”
The concept, adapted from trust and estate law, allows for
distribution of residual damage awards in class action lawsuits
where it is not possible to determine each plaintiff’s actual
damages or when plaintiffs fail to collect their portion of the
award. Under the cy pres doctrine, courts may order residual
funds to be put to the “next best compensation use, for the
aggregate, indirect, prospective benefit of the class (aggregate
cy pres distribution).” H.B. Newberg & A. Conte, Newberg on
Class Actions, § 10.17
(3d ed. 1992).
Because the concept of cy pres indicates
the “next best use” of funds, initially cy pres awards were
related to the purpose of the case from which it was created.
However, there is some permitted with the distribution. See
Superior Beverage Co. v. Owens-Illinois, 827 F. Supp. 477, 479
(N.D. Ill. 1993) (finding
[though the] use of funds for purposes
closely related to their origin is still the best cy pres
application, the doctrine of cy pres and courts’ broad
equitable powers now permit use of funds for other public interest
purposes by educational, charitable, and other public service
organizations, both for current programs or, where appropriate, to
constitute an endowment and source of future income for long-range
programs to be used in conjunction with other funds raised
Courts in the 7th, 9th
and 11th Circuits have awarded cy pres
distributions to State Bar organizations and law schools. Also,
courts across the country have found legal services programs to be
appropriate recipients of cy pres awards because they often
represent the next best use of funds to indirectly benefit the
members of a class. The core mission of South Carolina’s legal
services program is to protect the rights of those who ordinarily
would go unrepresented. Class action beneficiaries may not be able
to afford legal counsel, may be unaware of their rights or may not
be able to vindicate their rights.
A cy pres award to a non-profit
organization, such as the SC Bar Foundation, also is appropriate.
Through its grant program, the Bar Foundation provides funding to
organizations that afford basic access to civil legal aid to
low-income citizens, promote law related education services to the
public and advance the administration of justice.
In many cases, cy pres awards are made
pursuant to the stipulation or recommendation of counsel for both
plaintiffs and defendants. Decisions about residual funds can be
made by the court when the case is decided and the fund is
established, or when the residual funds actually become available.
Please consider a cy pres award to the Bar Foundation when
you are looking for the next best use of class action residual
funds. It could help advance the cause of justice.