By Leslie E. John, partner at Ballard Spahr LLP, and president of the Philadelphia Bar Foundation.
Each year, many class action lawsuits are filed nationwide by lawyers from Philadelphia. As these class action cases settle, unclaimed or leftover funds can remain. The cy pres doctrine presents a unique opportunity to benefit not only class members but also a broader community.
The term cy pres is derived from the Norman French phrase cy pres comme possible, meaning “as near as possible.”
For whatever the reason, when it is not possible to distribute all of the money directly to the class, a cy pres distribution to a nonprofit charitable organization whose work advances the public interest and indirectly benefits the class members is accepted as the next best use of the funds. The cy pres remedy can also be used for the entirety of a settlement fund when the amount to be awarded to each class member is too small to warrant distribution, or there is a determination that the settlement is better designed to align with the issue in the lawsuit.
Cy pres funds from class action lawsuits make a significant difference in our community. The Philadelphia Bar Foundation uses these funds to support the legal service organizations that provide a full range of legal aid services for people struggling with poverty, abuse, and discrimination.
The Bar Foundation is uniquely positioned to be the recipient of cy pres in many cases:
- We serve the entire community, both in Philadelphia and beyond.
- We provide grants and other support to nearly 40 different nonprofit legal aid organizations.
- We support the full range of access to justice issues, including children and youth, consumer issues, education, health, homeless individuals, housing, immigration, incarcerated individuals, individuals with disabilities, seniors, veterans, women, and workers.
- We are an independent, nonprofit organization aligned with the Philadelphia Bar Association.
The Philadelphia Bar Foundation has been fortunate to be the recipient of cy pres awards almost every year for nearly 20 years. Cy pres funds awarded to the Bar Foundation are used exclusively for our annual grantmaking to local legal aid organizations. During this grantmaking process, we thoroughly vet the organizations who receive the funds. These nonprofits deliver direct services to more than 60,000 clients annually, providing vital legal assistance to assure equal access to justice.
The parameters of cy pres relief in class action settlements are changing. This March, in the case of Frank v. Gaos, the Supreme Court appeared poised to provide some clarification regarding the validity of cy pres awards. However, the Supreme Court declined to resolve the cy pres issue in an 8-1 majority, thus allowing the use of cy pres to continue.
Both plaintiffs’ and defendants’ counsel can help to initiate a cy pres award to promote equal justice for all individuals and families in the Philadelphia region by incorporating it into the settlement agreement. We thank those who have allowed the Philadelphia Bar Foundation to use these funds to strengthen the provision of quality legal services to those who can least afford them. When appropriate, I encourage you to consider the Philadelphia Bar Foundation as the recipient of cy pres funds.
For more information on cy pres, contact Jessica Hilburn-Holmes, executive director of the Philadelphia Bar Foundation.