Appeals Court Returns Class Action To Lower Court After Only $225,000 Paid Out To Class Members, But $12M Awarded To Attorneys And Third-Party Universities

Northern California Record cited CEI’s Attorney Adam Schulman on Ninth Circuit Frank v. Gaos decision.

In its decision based on the objection by the Competitive Enterprise Institute (CEI), the Ninth Circuit remanded the fee issue to the U.S District Court for Southern California, but allowed the disbursement of the money to the universities under the “cy pres” doctrine.

This doctrine states that if an amount is not claimed, or it is found that the individual amounts are so small that it costs more to disburse them, then the money would go to a nonprofit or charitable organization with interests related to the action.

“We think the court got it half right,” attorney Adam Schulman, who argued the CEI’s position before the appeals court, told the Northern California Record, adding that the remanding of the attorney fees was welcome, but it still allowed millions of dollars to be disbursed to non-class members. The institute objects to the way the “cy pres” doctrine is used in class actions.

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