‘Cy Pres’ Settlement Review

The Washington Post reviews the cases granted cert by the Supreme Court, including Frank v. Gaos in which the court will examine cy pres settlements:

The court also said it will review an $8.5 million class-action settlement involving Google in which the money went to lawyers and a group of organizations instead of the class members who brought the complaint.

The lawsuit involved complaints that Google improperly disclosed users’ Internet search terms to others.

About $2 million of the settlement went to lawyers, and the rest went to organizations and university centers that said they would use the money to promote privacy protection.

But Theodore Frank and Melissa Ann Holyoak objected to what is called a “cy pres” agreement and said Monday they were gratified the court had taken the case.

“We are hopeful that the Supreme Court’s review will result in a standard forbidding attorneys from misusing class-action settlements to selfishly put themselves and third parties ahead of their clients,” said Frank, director of litigation at the Competitive Enterprise Institute.

Google said it would have been “infeasible to distribute $5.3 million in settlement funds to 129 million class members who had been unable to plead any concrete injury resulting from the challenged feature of Internet searches.”

The Supreme Court has seemingly been looking for a case that would allow it to review cy pres (pronounced “see pray”) settlements. In declining to accept such a challenge in 2013, Chief Justice John G. Roberts Jr. nevertheless said the agreements raised “fundamental concerns,” including “when, if ever, such relief should be considered” and “how to assess its fairness as a general matter.”

The case is Frank V. Gaos.

Read the full article here.