About the Campaign
Harnessing the Power of Cy Pres and Residual Funds Awards in California
Designate the Justice Gap Fund to receive cy pres and other residual funds - it is a powerful and easy way to increase access to justice! Find out how with the cy pres toolkit - Expanding Access to Justice through Class Action Residuals and Other Court Awards.
What is Cy Pres?
The term "cy pres" comes from a French term meaning "as near as possible." Cy pres awards are designated when there are residual funds in class action lawsuits, probate matters, and other proceedings that cannot be distributed to the class members or beneficiaries for a variety of reasons. Courts solve this problem by making cy pres awards to appropriate nonprofit charitable organizations.
The Justice Gap Fund is a Perfect Fit for Residual Funds Designations, including Cy Pres Awards
California Code of Civil Procedure §384 specifically authorizes the distribution of unpaid residuals from class action litigation to legal services nonprofit organizations funded by the State Bar of California. Funds should be distributed "in a manner designed either to further the purposes of the underlying causes of action, or to promote justice for all Californians" (§384 (a)). The code also states that "funds collected by the State Bar pursuant to this section for these purposes is in the public interest, is a proper use of the funds, and is consistent with essential public and governmental purposes." Id.
The State Bar created the Justice Gap Fund to benefit the over 270,000 Californians served by civil nonprofit legal aid organizations. The Justice Gap Fund directly benefits the most vulnerable Californians in legal crisis. At heart, legal aid organizations, like class actions, are about making access to justice a reality for those who otherwise could not obtain the protections of our court system. Not only does the Justice Gap Fund fall squarely within the parameters of CCP §384, but it is a worthy and appropriate beneficiary for residual funds:
- Expand Justice without Conflicts. The State Bar's mission is to "preserve and improve our justice system in order to ensure a free and just society under the law." In this role, the State Bar does not represent parties in court, therefore leaving little possibility for a conflict of interest for either the Court or the Defendant.
- Benefit a Broad Spectrum of Communities. Undistributed residuals designated to the Justice Gap Fund will be distributed to the network of 95 legal aid organizations that provide free civil legal services to low-income Californians in every county across a wide substantive spectrum. Legal aid organizations step in when families are in crisis to prevent the costly spiral of social problems arising from homelessness, wage loss, deficient healthcare, domestic violence, and more.
- Employ Key Partnerships. Legal aid organizations leverage resources by creating partnerships with each other, the courts, local, state and federal government, community-based organizations, law schools, and law firms to expand access to justice to the greatest possible extent.
- Fund Quality. The State Bar has decades of experience as a grant-making organization. Grants are funded pursuant to strict statutory criteria. Recipient organizations must meet rigorous quality control standards and demonstrate that their priorities reflect community concerns.
If you are involved in a class action case, or otherwise are in a position to designate a beneficiary for residual funds, be an advocate for the Justice Gap Fund. You can rest assured the funds will be used in a manner consistent with the intent of the award. We are happy to recognize you for the contribution in Our Contributors, but most importantly, you can make a significant difference in the lives of low-income Californians who desperately need free civil legal assistance for safety, shelter, and well-being. For more information about the Justice Gap Fund, cy pres, or residual funds, contact Stephanie Choy, Managing Director at the Legal Services Trust Fund Program, at (415) 538-2249 or firstname.lastname@example.org.
(a) It is the intent of the Legislature in enacting this section to ensure that the unpaid residuals in class action litigation are distributed, to the extent possible, in a manner designed either to further the purposes of the underlying causes of action, or to promote justice for all Californians. The Legislature finds that the use of funds collected by the State Bar pursuant to this section for these purposes is in the public interest, is a proper use of the funds, and is consistent with essential public and governmental purposes.
(b) Except as provided in subdivision (c), prior to the entry of any judgment in a class action established pursuant to Section 382 the court shall determine the total amount that will be payable to all class members, if all class members are paid the amount to which they are entitled pursuant to the judgment. The court shall also set a date when the parties shall report to the court the total amount that was actually paid to the class members. After the report is received, the court shall amend the judgment to direct the defendant to pay the sum of the unpaid residue, plus interest on that sum at the legal rate of interest from the date of entry of the initial judgment, 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, to child advocacy programs, or to nonprofit organizations providing civil legal services to the indigent [emphasis added]. The court shall ensure that the distribution of any unpaid residual derived from multi-state or national cases brought under California law shall provide substantial or commensurate benefit to California consumers.
(c) This section shall not apply to any class action brought against any public entity, as defined in Section 811.2 of the Government Code, or against any public employee, as defined in Section 811.4 of the Government Code. However, this section shall not be construed to abrogate any equitable cy pres remedy, which may be available in any class action with regard to all, or part of the residue.
- Pennies from heaven: why cy pres awards work - Daily Journal, 11/22/2013