Cy Pres Settlements

April 4, 2008

Theodore H. Frank

The idea of cy pres (pronounced “see pray” or “sigh pray,” from the French cy pres comme possible—“as near as possible”) originated in the trust context, where courts would reinterpret the terms of a charitable trust when literal application of those terms resulted in the dissolution of the trust because of impossibility or illegality. In a classic nineteenth century example, a court repurposed a trust that had been created to abolish slavery in the United States to instead provide charity to poor African-Americans. The California Supreme Court endorsed the use of cy pres or “fluid recovery” mechanism in class action settlements in 1986, to distribute proceeds to a “next best” class of consumers, and many other courts have gradually adopted the procedure. Cy pres settlements arise in one of three circumstances....

Cy Pres Settlements