In Defense of the Cy-Pres-Only Class Action

Authors

Robert G. Bone, The University of Texas at Austin School of Law

First Page

571

Abstract

Cy pres is frequently used to dispose of class action settlement funds, yet it is one of the most controversial aspects of class action practice. Perhaps the most contested use of cy pres is what I call the “cy-pres-only class action”: a settlement class action in which the judge certifies a class and approves a settlement that expressly provides for a third-party charity to receive all the settlement funds. In these cases, the judge exercises her judicial power to enable a lawsuit that compensates a third party who does not have legal rights at stake and does so without providing any direct compensation to class members who do.

The strongest argument against this use of cy pres is based on legitimacy, and the most compelling critique rests on a particular conception of civil adjudica- tion, which I call the “legal rights view.” The legal rights view holds that courts are strictly limited to producing case outcomes that match the parties’ substan- tive legal rights as those rights are defined by the best interpretation of the substantive law. From this perspective, the problem with a cy-pres-only class action is that it fails to enforce class members’ substantive legal rights to com- pensation, and does so in order to promote the values and policies that underlie the substantive law.

One way to respond to the legitimacy challenge posed by the legal rights view is to dispute the coherence and validity of the legal rights view itself. This Ar- ticle takes a different path. It responds from within the logic of the legal rights view. It shows that the cy-pres-only class action is in fact consistent with the legal rights view when that view is modified to account for the practical limi- tations of litigation, and in particular the inevitability of outcome error. When outcome error is factored into the analysis, the cy-pres-only class action can be justified as a device to secure a fair and efficient distribution of error risk across different cases and litigants.

Law. I wish to thank Briana Rosenbaum for her helpful commentary, participants in the “Class Actions, Mass Torts, and MDLs: The Next 50 Years” conference for their questions and comments, and Doug Laycock for his helpful input.

Recommended Citation

Robert G. Bone, In Defense of the Cy-Pres-Only Class Action, 24 Lewis & Clark L. Rev. 571 (2020).
Available at: https://lawcommons.lclark.edu/lclr/vol24/iss2/11