Category Archives cy pres

The Eighth Circuit upheld a class settlement over the objections of six of the twenty-three class representatives.  The case involved a settlement among the NFL and nearly 25,000 former NFL players over the use of the players’ likenesses and identities, and it provided class members with two benefits: (1) the establishment and $42 million funding of the Common Good Entity, a non-profit organization charged with disbursing the money to charitable organizations or health and welfare organizations for the benefit of class members; and (2) the establishment of the Licensing Agency intended to assist class members with marketing their publicity rights.  Marshall et al. v. Nat’l Football League, No. 13-3581 (8th Cir. May 21, 2015). At the outset, the Court tackled the question of whether the settlement benefits were appropriate given constraints on certain cy pres distributions.  The Court emphasized that the Licensing Agency provided class members with a direct benefit,…

Here's an interesting order from the District of Kansas that was published right before the Thanksgiving holiday that demonstrates how a proposed class settlement can get denied not once, but twice, if counsel does not adequately represent all members of the putative absent class. In Better v. YRC Worldwide, No. 11-2072-KHV, 2013 WL 6060952 (D. Kan. Nov. 18, 2013), the parties were before the court for a second time for preliminary approval of a securities class action settlement. While the court initially denied approval because plaintiffs failed to satisfy the Rule 23 requirements of typicality and adequacy, it appears the parties did not sufficiently address these deficiencies the second time around. Specifically, the court identified three areas where the parties failed to protect the interests of the putative class: First, approval was denied because the Court found that the proposed settlement failed to provide any benefit to certain class members while requiring…

Cy pres - A French term for "ok, close enough" - can be tricky. The wrong has been righted, but either the class has been fully compensated, or the compensation is too de minimis or impractical to allocate and distribute. What to do? Give it away to charity, but not just any charity. This issue confronted the Court in In re Bank of America Corp. Sec. Litig., 2013 WL 3212514 (E.D. Mo., June 24, 2013). In that securities fraud MDL, the global settlement of $490,000,000.00 had been approved, and all class members had been paid. Yet, due to problems locating class members, duplicate payments, restitution, and interest, class counsel found themselves with $2,734,136.69 remaining in the kitty. This was even after the claim administrator had been caught embezzling $5,000,000.00 from the fund. Not a bad problem to have, but a problem nonetheless. After rejecting the motion of the claims administrator…

Close