The U.S. Supreme Court is scheduled to hear arguments this morning in a case that could end cy pres, the practice of steering money in class action settlements to organizations with absolutely no connection to the underlying lawsuit.
Proponents say cy pres – it translates roughly into “as good as” – has noble roots in ancient Roman law and accomplishes the goal of compensating class members when it’s impractical to actually send them a check. Opponents say cy pres has much more recent and intellectually dishonest roots and has evolved into a sneaky way to pay plaintiff lawyers more than they’re due while rewarding charities they may have a personal connection with.
Competitive Enterprise Institute attorney Ted Frank will be arguing for himself in Frank v. Gaos as a member of a class of Google customers who received nothing from an $8.5 million settlement of privacy litigation that paid plaintiff lawyers $2.2 million in fees.
The U.S. Court of Appeals for the Ninth Circuit approved the settlement anyway.
With the support of conservative groups and a number of Republican-leaning states, Frank argues the lawyers didn’t even try to compensate their supposed clients and instead agreed to steer more than $5 million to a handful of charities that Google already supported or were associated with colleges the lawyers attended.
“It’s a question of fairness, and whether lawyers have actually compromised the class by allocating money in a way that maximizes their own fees,” said Frank, who heads the Center for Class Action Fairness, which frequently represents objectors challenging class action settlements and the fees awarded to plaintiff lawyers.
Continue reading this Legal Newsline story on Forbes.com