CY PRES AWARD

Issues

Cy press settlements allow courts to distribute portions of class action settlement funds to outside beneficiaries—such as non-profit organizations—for the indirect benefit of the class.  This case asks the Supreme Court to decide whether lower courts violated Federal Rule of Civil Procedure 23(e) when they certified a cy pres settlement, which did not award settlement money to class members, in a class action against Google. Petitioner and class member Theodore H. Frank asserts that the courts should not have certified the cy pres class settlement because it was not “fair, reasonable, and adequate” in the meaning of Rule 23(e), given that it did not compensate class members for their injuries. Frank argues that the attorney fees of class counsel were disproportionate given that class members received no return and contends that cy pres awards generate potential conflicts between interests of class counsel and their clients. Finally, Frank contends that in the case at hand, class counsel had conflicts with the beneficiaries of the cy pres settlement. Other class members, such as Paloma Gaos, and Google respond that the cy pres settlement was “fair, reasonable, and adequate,” as distributing settlement money to each class member would be infeasible. Google and Gaos further indicate that the attorney fees were court-approved and state that Frank does not actually contest the award of attorneys’ fees. Finally, Google and Gaos assert that class counsel had no conflicts with the beneficiaries of the cy pres settlement, as the beneficiaries were chosen on their own merits. The outcome of this case has large implications for class action members, their freedom of speech, their due process rights, and to the awarding of cy pres settlements.

Questions as Framed for the Court by the Parties

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