June 2011 #2. Cy Pres PROVISION Added to Hawai'i Rules of Civil Procedure.

• Author: by Amanda Donlin and Ryan Caday

Hawaii Bar Journal

2011.

June 2011 #2.

Cy Pres PROVISION Added to Hawai'i Rules of Civil Procedure

Hawaii State Bar JournalJune 2011Cy Pres PROVISION Added to Hawai'i Rules of Civil Procedureby Amanda Donlin and Ryan CadayWhen the economy has problems and we know the [Interest on Lawyers Trust Accounts (lOLTA)] funds have become extremely limited, it is important to find other ways to fund access to justice activities. -Margery Bronster, Bronster Hoshibata

On January 27, 2011, the Hawai'i Supreme Court adopted an amendment to the Hawai'i Rules of Civil Procedure (HRCP) proposed by the Hawai'i Access to Justice Commission that may increase funding to local non-profit organizations aimed at improving access to justice.(fn1)The amendment was to HRCP Rule 23 and governs the distribution of cy pres awards.(fn2) Cy pres, which means "as near as possible," originated as a trust law doctrine that allowed the distribution of a trust fund whose stated purpose could not be met.(fn3) Under the cy pres doctrine, funds were allocated to their "next best" use.(fn4) Similarly today, cy pres usually denotes the redistribution of residual class action funds.(fn5)

Elsewhere in the country, state judiciaries and legislatures have recognized the potential benefits these residual funds may confer upon public interest projects. Five other states - Illinois, Massachusetts, North Carolina, Tennessee, and Washington - have codified cy pres procedures in their civil rules or statutes.(fn6) This has resulted in palpable benefits for several of these states. For example, Illinois has already received over one million dollars in residual funds, which it has disbursed to organizations that improve access to justice for low-income residents.(fn7) The adoption of cy pres procedures in Hawai'i carries the potential to do the same for residents here.

Prior to the modification, HRCP Rule 23 was silent as to the handling of cy pres awards. However, in a 2009 class action settlement, Margery Bronster drew upon the common law to incorporate the concept of cy pres into the set-tlement.(fn8) In that case, where many of the claimants could not be found to receive their damages, the parties agreed to distribute over $125,000 in excess funds to the Hawai'i Food Bank, the Legal Aid Society, and the Jan Brenner Foundation. Bronster believes, though, that the codification of a cy pres process will make such settlements easier to implement.

Class action lawsuits provide legal assistance to individuals who alone would not have access to the courts.(fn9)Hence, cy pres may put residual class action funds to a compatible use. Effective July 1, 2011, the cy pres...