Cy pres awards are funds left over in major class actions that courts distribute to charitable organizations. The purpose of these awards is to channel unclaimed money to an organization performing functions likely to benefit uncompensated class members by alleviating the type of harm at issue in the lawsuit. But controversy about cy pres awards persists. In fact, in early November, when the U.S. Supreme Court declined to hear a challenge to a cy pres award arising out of a settlement with Facebook Inc., Chief Justice John Roberts expressed serious reservations about the fairness of cy pres awards generally, which, he wrote, are becoming more frequent.
State and federal courts have diverged in their treatment of cy pres awards. States are trending toward statutory or rule-based systems that designate legal services organizations as appropriate cy pres recipients. In contrast, federal courts, operating without the guidance of any rule for designating cy pres recipients, have struggled to protect class members and have, therefore, established an increasing number of conditions on cy pres awards.
