Law 360 reports on teh case where Cheif Justice Roberts agreed with Center for Class Action Fairness that the problem of cy pres solutions for settlements should be addressed.
The petition argued that cy pres agreements, used when paying class members is not feasible, present a heightened risk of conflict between class members and fee-hungry counsel and open a path for plaintiffs' attorneys to strike collusive agreements with corporate defendants eager to settle at the lowest cost and "with a minimum of fuss."
The Facebook deal in particular contravened the "fair, reasonable and adequate" standard because its benefit to class members in the form of an untested Internet-privacy advocacy group was uncertain and because outlawing the Beacon program did nothing to proscribe future privacy violations, Marek argued.
In his statement, Justice Roberts concurred with the high court's decision but noted that the court has never addressed "fundamental concerns" surrounding the use of cy pres remedies in class action litigation.
Those include when, if ever, cy pres deals are appropriate, the standard for assessing one's fairness, whether new entities like the Facebook-created Digital Trust Foundation can be part of such a deal, and how closely the proposed remedy must align with class members' interests, according to the statement.
"Cy pres remedies, however, are a growing feature of class action settlements," Chief Justice Roberts said. "In a suitable case, this court may need to clarify the limits on the use of such remedies."
Read the full article at Law 360.