ENHANCING COMPETITION THROUGH THE CY PRES REMEDY: SUGGESTED BEST PRACTICES

Albert A. Foer, American Antitrust Institute

Abstract

In class action litigation involving the antitrust laws, it is often impossible or impracticable to compensate all victims. In such cases courts sometimes employ the doctrine of “cy pres” to put the unclaimed damage funds to “the next best use,” which may include awarding funds to public interest organizations for purposes related in some way to the case. It is increasingly, and appropriately, being recognized that the cy pres doctrine can be utilized as part of a remedy for the purpose of carrying out the objectives of the antitrust laws by enhancing competition. At the same time, cy pres opens up possibilities of corruption, waste, and/or public criticism. This paper provides background on class action settlements and the law of cy pres, then offers a “best practices” agenda that can utilize the cy pres doctrine as part of a competition-enhancing remedy.