Cy Pres Settlements: Problems Associated with the Judiciary’s Role and Suggested Solutions

Abstract

Class action settlements frequently generate funds that are never collected by class members. This creates problems associated with determining how these funds should be allocated. This Note discusses one mechanism for distributing unclaimed settlement funds—cy pres distributions to charitable organizations that advance interests in line with those of the class members. This Note discusses two problems that arise out of the role judges play in cy pres distributions: the potential that judges will be perceived as making distributions to pet charities, and the potential that judges may transgress their constitutionally assigned role as arbiters of “cases or controversies” in making such distributions. This Note proposes solving these problems by removing judges from the process of allocating unclaimed class action settlement funds altogether, instead requiring parties to stipulate the treatment of such funds in any settlement agreement.