The cy pres doctrine is a method of distributing a damage fund when the original purpose cannot be achieved. In class action lawsuits, if a payment of damages is to be made to class members, a fund is created. After class members’ claims are paid, a residual amount may remain, and under the doctrine of cy pres, judges and class counsel can recommend that residual funds be distributed to the “next best” use. In addition, when the amount of damages to each individual class member is too small to warrant distribution, the cy pres remedy can be used for the entirety of a statutory damage award.
Community Legal Services of Philadelphia (CLS) is a nationally known leader in the civil legal aid world. It and its staff have been repeatedly recognized as one of the very best legal aid programs in the country throughout its almost fifty year history, winning many national and local awards. It has handled cases in venues ranging from the local welfare office to the U.S. Supreme Court.
Funding for the important work CLS does is always a challenge: in 1996 CLS turned down federal Legal Services Corporation funding because it would not allow the organization to do a wide range of advocacy on behalf of its low income clients, including class actions, which have always been an important part of CLS’ work to make broad based change on behalf of the thousands of clients it helps each year. Pennsylvania legal aid funding has been stagnant for decades and IOLTA has suffered because of interest rate drops. In recent years, cy pres awards have become an important revenue source for CLS’ work in Philadelphia, across Pennsylvania, and nationally.
- CLS is an appropriate recipient of cy pres awards for Pennsylvania and national classes:
- Because CLS does advocacy with statewide and national impact and provides training and support to other legal aid providers across the state and nation, it is an appropriate recipient of awards for classes that are defined to include plaintiffs across the state or nation. Indeed, CLS receives funding from the statewide legal aid organization, Pennsylvania Legal Aid Network, to provide backup support to legal aid organizations across the state. CLS has won a class action for a national class of disabled children in the U.S. Supreme Court, works closely with national legal aid support organizations, and has received a number of foundation grants for work with national impact.
- CLS is an appropriate recipient of cy pres awards in all types of class actions:
- CLS handles cases in many areas and has repeatedly been approved by both federal and state courts as an appropriate recipient of cy pres awards in a wide range of types of cases. Our work includes national advocacy on employment, consumer rights, elder law, health care, mortgage, disability, public benefits, family law and housing.
- In recent years, courts have repeatedly held that because civil legal aid organizations provide access to the courts for people without resources, and class actions similarly are designed to provide access to courts for class members who otherwise might not have access, legal aid organizations are appropriate recipients of cy pres in class actions without regard to the subject matter. This theory is reflected in the PA Supreme Court’s 2012 rule changes providing that 50% of all cy pres awards go to the PA IOLTA Board for distribution to legal aid organizations.
- CLS has received dozens of cy pres awards in federal and state court including the following few examples:
- Samuel-Bassett v. Kia Motors America Litigation (Phila.C.C.P.) – ( $2 million for statewide work)
- Lewis v. Jaques Admiralty Law Firm (E.D. PA) – (J. Robreno wrote “designating CLS, an organization with a track record of providing effective and honest services to individuals of limited means, will serve [the purposes of the class].”
- In re Linerboard Antitrust Litigation (E.D. PA)
- In re Nasdaq Market-Makers Antitrust Litigation (S.D.N.Y.)
- Cosgrove v. Citizen’s Automotive Finance (E.D.PA)
- Liss & Marion v. Recordex (Phila.C.C.P.)
- CLS staff is ready and available to promptly assist class action counsel with information or documents to support cy pres awards. Contact Kathy Gomez at kgomez@clsphila.org or 215-981-3772.
