Metropolitan News-Enterprise reports on why the Center for Class Action Fairness objected to the AOL class action settlement based on the cy pres distribution failing to meet standards.
Smith, writing for the Court of Appeals, explained that cy pres distributions have been approved of in the past as a means of using settlement funds “for the aggregate, indirect, prospective benefit of the class.”
The use of the doctrine, the judge went on to say, has been criticized, however, where it is “unbridled by a driving nexus between the plaintiff class and the cy pres beneficiaries” and awards are made “to myriad charities which, though no doubt pursuing virtuous goals, have little or nothing to do with the purposes of the underlying lawsuit or the class of plaintiffs involved.” This may lead to self-interest on the part of parties or their counsel, Smith said, or to an appearance of impropriety on the part of the judge making or approving the selections.
“The cy pres distribution in this case fails to meet any of the guiding standards in Six Mexican Workers,” Smith declared. “The proposed awards fail to (1) address the objectives of the underlying statutes, (2) target the plaintiff class, or (3) provide reasonable certainty that any member will be benefitted.”
Read the full article at Metropolitan News-Enterprise.