On March 20, 2019, in Frank v. Gaos, 586 U.S. ___ (2019), the United States Supreme Court sidestepped a novel question regarding a cy pres class action settlement, instead remanding the case back to the lower courts with instructions to consider Article III standing issues in light of the high court’s 2016 decision in Spokeo, Inc. v. Robins.
In the class action context, cy pres refers to the practice of distributing settlement funds to public interest or charitable recipients whose work is determined to indirectly benefit class members. Sometimes this is done with a portion of settlement funds (that go unclaimed by class members). Sometimes the cy pres award is the only cash payment (other than fees and costs to counsel), on the theory that this comes as close as possible (“cy près comme possible”) to awarding damages in a case that is not amenable to individual relief. Federal courts—which must review any class action settlement and find that it is “fair, reasonable, and adequate” to the class—have been generally critical of cy-pres-only settlements.