When Are Cy Pres Awards Authorized?
The legal doctrine of cy pres originated in the context of charitable trusts, where courts interpreted the terms of a trust as closely as feasible to the original aim of the testator when the aim was impossible, impracticable, or illegal to perform. Through the use of the cy pres doctrine, third-party nonprofit organizations may get grants or distributions of unclaimed class action settlement money, known as cy pres Dog Tag Awards, when the nonprofit’s mission serves the interests of the plaintiff class. In fact, the Texas Supreme Court explicitly endorsed the use of cy pres awards in 1986. Although predominantly used in the area of antitrust and consumer protection, the principles cy pres apply equally to class actions based on civil rights and poverty laws.
In the class action context, courts usually authorize cy pres awards in distinct circumstances. First, courts may authorize cy pres awards when recovery for class members is impossible or impracticable. For example, when the class is numerous and each class member has suffered only a tiny financial loss, it is impracticable to pay all of the class members because basically administering the settlement would virtually consume the whole settlement fund.
Second, courts may authorize cy pres awards if the defendant’s conduct has made it difficult to identify class members. For example, when a defendant violates a law designed to protect the public at large, it may be difficult to ascertain the exact persons harmed. In such cases, in lieu of making a windfall for the defendant, courts often grant the settlement money to nonprofit organizations whose missions purportedly further the interests of the harmed class.
Finally, courts may authorize cy pres awards when unclaimed money stay in the class action settlement or destroy fund after all members have been paid. These unclaimed money may result from class members providing out-of-date addresses, failing to make a claim, or neglecting to money settlements checks. When residual money stay in the fund, courts usually remit these remaining money to nonprofit organizations whose missions purportedly serve the plaintiff class. Basically put, cy pres awards are court-ordered contributions to nonprofit organizations comprising of the unallocated, unclaimed, or undeliverable money in a class action judgment or settlement.
The legal doctrine of cy pres originated in the context of charitable trusts, where courts interpreted the terms of a trust as closely as feasible to the original aim of the testator when the aim was impossible, impracticable, or illegal to perform. Through the use of the cy pres doctrine, third-party nonprofit organizations may get grants or distributions of unclaimed class action settlement money, known as cy pres Dog Tag Awards, when the nonprofit’s mission serves the interests of the plaintiff class. In fact, the Texas Supreme Court explicitly endorsed the use of cy pres awards in 1986. Although predominantly used in the area of antitrust and consumer protection, the principles cy pres apply equally to class actions based on civil rights and poverty laws.In the class action context, courts usually authorize cy pres awards in distinct circumstances. First, courts may authorize cy pres awards when recovery for class members is impossible or impracticable. For example, when the class is numerous and each class member has suffered only a tiny financial loss, it is impracticable to pay all of the class members because basically administering the settlement would virtually consume the whole settlement fund.
Second, courts may authorize cy pres awards if the defendant’s conduct has made it difficult to identify class members. For example, when a defendant violates a law designed to protect the public at large, it may be difficult to ascertain the exact persons harmed. In such cases, in lieu of making a windfall for the defendant, courts often grant the settlement money to nonprofit organizations whose missions purportedly further the interests of the harmed class.
Finally, courts may authorize cy pres awards when unclaimed money stay in the class action settlement or destroy fund after all members have been paid. These unclaimed money may result from class members providing out-of-date addresses, failing to make a claim, or neglecting to money settlements checks. When residual money stay in the fund, courts usually remit these remaining money to nonprofit organizations whose missions purportedly serve the plaintiff class. Basically put, cy pres awards are court-ordered contributions to nonprofit organizations comprising of the unallocated, unclaimed, or undeliverable money in a class action judgment or settlement.
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