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The Cy Pres Doctrine in Class Action Residual Distributions: Cy Pres as a Best Practice and Recommendations for Regulation

Evelyn G. Abravanel Prof., American University

Abstract

This article examines the widespread and inconsistent use of cy pres distributions arising from class action settlements. Using the cy pres doctrine’s theoretical and practical application in class action settlements, as well as the discrepancy between the two as a base, there are three alternative approaches to distributing residual funds. For reasons discussed, a cy pres distribution scheme is usually the best approach. There remain questions about the need for more uniform regulations over cy pres distributions and, if needed, who should enforce such rules and what mechanisms should be employed to do so. Existing state laws that govern cy pres awards are analyzed. The article concludes that government regulation or supervision by an independent body would not necessarily reduce the occurrence of erroneous applications of the cy pres doctrine in the class action context and would likely place severe limits on judicial discretion. Instead, to increase the consistency and fairness of cy pres distributions, greater transparency must be given to the settlement proceedings.

Suggested Citation

Evelyn G. Abravanel Prof.. 2012. "The Cy Pres Doctrine in Class Action Residual Distributions: Cy Pres as a Best Practice and Recommendations for Regulation" ExpressO
Available at: http://works.bepress.com/evelyn_abravanel/8

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