National Consumers League

NCL joins amicus brief to protect cy pres settlements

September 5, 2018

Media contact: National Consumers League – Carol McKay, carolm@nclnet.org, (412) 945-3242 or Taun Sterling, tauns@nclnet.org, (202) 207-2832

Washington, DC—In advance of a scheduled October 31 United States Supreme Court hearing of Frank v. Gaos, the National Consumers League has joined with the Center for Democracy and Technology and the Electronic Frontier Foundation to file an amicus brief in support for the judicial practice of awarding cy pres grants to charities and nonprofits in class-action settlement.

The case to be heard by the court questions the following: Whether awarding the majority of the proceeds from a class action to charities and nonprofits (known as a cy pres award), with no direct relief to members of the class, is consistent with the requirement that a settlement binding class members be “fair, reasonable, and adequate.”

In the amicus brief filed today, the organizations argue that the cy pres doctrine does, in fact, ensure that awards benefit class members by aggregating cost-prohibitively small individual payments for the greater good and by promoting the interests of the class rather than the defendant. Contrary to petitioners’ claims, the advocates recognize that cy pres grants are a well-established legal precedent that allow proceeds from class-action awards that might otherwise revert to companies that wrong consumers to instead be put to use by organizations that further the public interest.

Cy pres awards are a critical way to make sure industry is held accountable when consumers are wronged,” said NCL Executive Director Sally Greenberg. “In cases where individual class members’ payouts may not even exceed the price of a stamp, cy pres grants to advocacy organizations ensure that class-actions can continue to be a check on industry misdeeds.”

Read the brief here (PDF).

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About the National Consumers League

The National Consumers League, founded in 1899, is America's pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.