Cy Pres? S’il vous plait!
The Cy Pres doctrine (from the French term “Cy Pres comme possible,” meaning “as near as possible”) is a court-approved method of distributing a damage fund when the original purpose cannot be achieved. In recent years, Cy Pres awards have been a significant source of additional funding for the Oklahoma Bar Foundation (OBF), which for Oklahoma lawyers is the “next best use” in any type of class action case or other matter involving unallocated discretionary funds. The OBF’s mission of improving access to justice for those less fortunate makes it an ideal match for class action Cy Pres awards, since an underlying premise for all class actions is to make access to justice a reality for people who otherwise would not be able to obtain the projections of the court system.
Where does a Cy Pres award come from?
Typically at the conclusion of a class action where damages have been awarded to class members, a fund is created. After class members’ claims are paid, there is frequently an amount remaining because members of the class cannot be located, not all members of a class collect their portion of the award, or it is not possible to determine each plaintiff’s actual damages or share of the settlement fund. Under the doctrine of Cy Pres, judges and attorneys can recommend that residual funds be put to their “next best use” for the aggregate, indirect and prospective benefit of the class members.
Whatever the amount, the court must determine how to distribute these leftover funds. In these instances, courts have the discretion to distribute the remaining funds to charitable organizations, such as the OBF, under the Cy Pres doctrine. When negotiating a fund settlement, class action practitioners should discuss a precise mechanism for dealing with any residual funds that may remain at the end of any claims administration. A Cy Pres award supporting the OBF merits consideration during these negotiations. Oklahoma, unlike some other states, does not have a specific statute governing the allocation of residual funds in a class action context. However, Oklahoma courts have often directed Cy Pres funds to the OBF. Likewise, federal courts under the Federal Rules of Civil Procedure frequently direct residual funds in federal class actions to charitable organizations such as the OBF. Often the driving force for Cy Pres awards to charitable organizations such as the OBF is the plaintiff’s counsel, but defense counsel also frequently welcomes a Cy Pres remedy as a way for their client to resolve the case and obtain some positive publicity from the settlement. The OBF can be a resource in providing counsel with sample language for pleadings in directing Cy Pres awards to the OBF.
What does the OBF do with Cy Pres awards?
Cy Pres awards have made possible a number of successful charitable projects and initiatives over the past several years and have enabled the OBF to provide ongoing support for these efforts. The OBF uses a substantial portion of the Cy Pres awards received to support the court systems in Oklahoma and the work of our communities’ pro bono and legal aid organizations, and Cy Pres awards play a critical part in the OBF’s ability to provide that support. The OBF maintains a fund specifically for the benefit of Oklahoma district and appellate courts known as the “OBF District Court and Appellate Court Grant Fund.” There is a separate grant cycle for the Court Grant Fund each year, with applicants completing a formal grant application and receiving a personal interview with the OBF Grants and Awards Committee. The primary purpose of the fund is for capital improvements and extraordinary expenditures of Oklahoma district and appellate courts necessary to promote the administration of justice.
Since 2006, the OBF has received over $3.3 million in Cy Pres awards due to the generosity and forethought of Oklahoma attorneys and other counsel in various class action matters. These awards have allowed the OBF to make grant awards from the fund to 25 courts across the state in the total amount of $218,337 through calendar year 2011 to provide for such things as digital court reporting systems and sound equipment, audio visual equipment for the courts, technology upgrades and Wi-Fi systems for the district court of Oklahoma County, waiting area improvements to the Juvenile Justice Center, educational displays, computer equipment and software, video equipment and other items. An additional approximate $100,000 in awards is projected to be made by the OBF from the Court Grant Fund during 2012. The OBF Court Grant Fund allows the OBF to partner with Oklahoma counties to provide improvements to the courts that otherwise would not be possible, and provides funds for improvements to our court systems which benefit all users of Oklahoma courts thereby furthering the OBF mission of access to justice for all.
What can you do to further the charitable mission of the OBF?
The OBF’s mission of “advancing education, citizenship and justice for all” makes it a perfect match for class action Cy Pres awards. Through the OBF’s comprehensive grant award process, applicants and a panel of diverse individuals with a wide range of interests and expertise come together to strategically and objectively allocate resources to support dozens of outstanding law-related programs and initiatives, making OBF an attractive charitable investment choice for Cy Pres awards.
Thanks to members of the Oklahoma Bar Association, the OBF has been fortunate to receive a number of generous Cy Pres awards since 2006. These awards have been key components for growth and outreach for the OBF’s charitable missions and have enabled the OBF to provide for increases in overall grant awards for new initiatives across the state. Additional Cy Pres awards to the OBF can and will make a tremendous difference to benefit courts throughout Oklahoma and to further the other charitable missions of the OBF. Please consider the OBF in any cases in which you are involved that have the potential of remaining Cy Pres fund distributions.
- For a detailed look at Cy Pres awards and how they can be used, See In re Holocaust Victim Asset Litig., 424 F.3d 158, 163 (2nd Cir. 2005), and Kevin M. Forde, “What Can a Court Do with Leftover Class Action Funds? Almost Anything!,” 35 JUDGES’ JOURNAL 9 (Summer, 1996).
- Cal. Cod Civ. Proc. §384; 735 ILCS. §5/2-807; Mass. R. Vic. P. 23(e); N.C. gen. Stat. §1-267.10; S.D. Codified Laws §16-2-57; and Wash. CR 23(f).