Leading Cases on Objections to Cy Pres Awards in Class Action Settlements: A Circuit-By-Circuit Guide

• Author: Wilber H. Boies and Gabrielle Siroonian
• Pages: 7-13

American Bar Association | Litigation Section

Class Actions & Derivative Suits

Summer 2024, Vol. 34 No. 1

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© 2024 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any

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Leading Cases on Objections to Cy Pres Awards in Class

Action Settlements: A Circuit-By-Circuit Guide

By Wilber H. Boies and Gabrielle Siroonian

Federal courts generally approve proposed cy pres awards from undistributed residual funds in

class action settlements when (i) further distributions to class members are not feasible and

(ii) the parties propose cy pres recipients whose work relates to the settled class action. While

distributions to class members and proposals for cy pres distributions are standard parts of class

action settlements, counsel settling class actions should be prepared for the less common

challenges to any use of cy pres awards: Can courts award settlement funds to nonparties? Are cy

pres awards allowed under Rule 23? Do they violate the Rules Enabling Act or the First

Amendment and due process protections for class members? Those questions and challenges can

come from district judges unfamiliar with class action administration—or from objectors who

want to disrupt proposed settlements. This article is your guide to leading cases that answer such

questions and defeat such objections.

Leading opinions from every federal circuit reject broad objections to the use of cy pres awards.

Ten circuits have appellate opinions that approve the use of cy pres awards over objections. The

Supreme Court has denied certiorari petitions challenging cy pres awards in cases from seven

circuits.

Much of this case law was generated by objectors represented by the Center for Class Action

Fairness, the Hamilton Lincoln Law Institute, and attorney Ted Frank (referred to in this article

collectively as Center/Hamilton). In several cases, Center/Hamilton lawyers were themselves the

objecting class members. The Supreme Court denied Center/Hamilton certiorari petitions from

the Second, Eighth, and Ninth Circuits in the Court term ending in June 2023.

First Circuit (Maine, Massachusetts, New Hampshire,

Puerto Rico, Rhode Island)

In In re Lupron Marketing and Sales Practices Litigation, 677 F.3d 21 (1st Cir. 2012), the First

Circuit approved a class action settlement over objections about cy pres awards—and the

Supreme Court denied certiorari.

The district court in Lupron approved a settlement agreement with $40 million to be distributed

to consumers and unclaimed funds distributed as cy pres awards at the discretion of the trial

judge. When the district court later ordered $14 million in cy pres awards, three class members

appealed.