Columbus, OH – On Tuesday, The Buckeye Institute filed an amicus brief in St. John v. Jones, urging the U.S. Supreme Court to accept the case and end the unfair practice of awarding third parties, or cy pres recipients—who are wholly unrelated to a lawsuit—a portion of the monetary award that results from a class action lawsuit.

“When class action lawsuits were embedded in the Federal Rules of Civil Procedure, Rule 23, there was no thought of the possibility that there might be left-over monies that could not be distributed to class members,” said David C. Tryon, director of litigation at The Buckeye Institute. “However, today, through our courts, groups wholly unrelated to class action lawsuits are profiting from settlements. This practice of cy pres awards from ‘unclaimed’ settlement funds undermines the legitimacy of our judicial system and incentivizes lawyers and law firms to seek high award settlements, not to benefit class members, but to generate high legal fees and accolades for charitable giving from cy pres awards. This is a systemic problem and must end.”

In its brief, The Buckeye Institute outlines how cy pres awards violate the safeguards included in Rule 23 and how “[f]aithfull enforcement of those safeguards would reduce or eliminate, the likelihood of excess funds” from class action lawsuits. Buckeye goes on to highlight highly questionable and unscrupulous awards, including:

• Law firms marketing the distribution of “unclaimed” monies as their firm’s own charitable giving;
• A $5.1 million “donation” to the George Washington Law School from a cy pres award that was negotiated by a law school alumnus who won the class action lawsuit;
• A nearly half-million dollars directed to a nonprofit whose purpose was to buy “historically appropriate” furniture and accessories for the courthouse in which the presiding judge sat;
• A distribution to a plaintiffs’ bar promoting class-action employment-law cases;
• Millions of dollars to a charity on whose board of directors sat the presiding judge and three plaintiffs’ attorneys, each of whom allegedly was paid several thousand dollars for their “service.” The same settlement distributed $1 million to the alma mater of one of the plaintiffs’ attorneys, which then allegedly hired the lawyer for $100,000 a year; 
• Almost $3 million to the law school from which several of the plaintiffs’ counsel graduated; and 
• An $8 million award to a law school that the presiding judge attended.

“Judges are not legislators empowered to tax some entities and award the revenues to others, and Article III of the U.S. Constitution does not give judges the power to award uninjured plaintiffs monetary awards from class action lawsuits,” Tryon continued. “This case illustrates just how far our courts have roamed from the actual language and intent of Rule 23, and it presents an opportunity for the Supreme Court itself to end this improper practice.”

# # #

UPDATE: On May 15, 2023, the U.S. Supreme Court denied cert in the case.