LACBA Update Back Issues - December 2014

Counsel for Justice: A Good Match for Cy Pres Awards from Unpaid Residuals in Class Action Litigation

Counsel for Justice, formerly known as the Los Angeles County Bar Foundation, is dedicated to providing service to the community in five areas: domestic violence, veterans, immigration, AIDS legal services, and community mediation.

By Ronald H. Bae, Shareholder, Aequitas Law Group; member, LACBA Armed Forces Committee.

As the father of seven-year-old twin boys, I recently had the pleasure of seeing them join Cub Scouts. After a whirlwind of discussion among parents, I somehow ended up becoming the den leader for my two sons and eight other Cub Scouts. As I scrambled to learn about leading a Cub Scout den, I came across a quote from a British Army officer named Robert Stephenson Smyth Baden-Powell, founder of the Scout Movement. In a letter found in his desk after his death addressed to all Scouts, he wrote, "Try and leave this world a little better than you found it."

As lawyers, our profession is dedicated to helping, defending, and speaking for others. I have little doubt that every one of us tries our best to leave this world a little better than we found it. One way I have discovered to integrate this noble goal with my class action practice is to utilize California Code of Civil Procedure Section 384. Section 384 allows residual funds in class action settlements that cannot be distributed to class members to be given to certain charitable organizations. Such distribution is known as "cy pres," a French term meaning "as near as possible."

In certain class action settlements in which I was class counsel, I was able to negotiate a class action settlement to remit the residual funds to several worthy charitable organizations. It is a practical reality that some portions of class settlements do not get claimed and that some settlement checks do not get cashed. In the eyes of many courts, the next best use for such funds to is send them to “nonprofit organizations or foundations to support projects that will benefit the class or similarly situated persons, or that promote the law consistent with the objectives and purposes of the underlying cause of action.” Code Civ. Proc. §384(b). 

Having obtained preliminary and final approval of such class action settlements from various judges, I can say from personal experience that this is an excellent way for class action practitioners (both plaintiffs’ and defense counsel) to contribute much-needed funds to charities. 

During my research of various foundations and charitable organizations, I learned that there is one worthy organization right under our nose, Counsel for Justice, which was formerly known as the Los Angeles County Bar Foundation. Counsel for Justice is dedicated to providing our community with service in five areas through the work of the Domestic Violence Project, the Veterans Project, the Immigration Legal Assistance Project, the AIDS Legal Services Project, and the Center for Civic Mediation.

By making the effort to work with the other counsel in a class action settlement to include Counsel for Justice as a cy pres recipient, I believe that lawyers who practice in this area can make great advances in making our world better than how we found it by providing assistance to organizations like Counsel for Justice to prevent domestic violence, help veterans and immigrants, AIDS patients, and others. 

Residual funds in class action settlements can often be significant. Thus, while it may not take many resources for practitioners to seek out and negotiate a cy pres, these funds will have a lasting impact on providing vital services to those in need in our community.