What is cy pres?
When class action lawsuit awards and settlements cannot be delivered to the people affected by the case, they go to charities as the next best place to fund. In Oregon, the cy pres rules for what happens to leftover class action damages can be found in the Oregon Rules of Civil Procedure (ORCP).
What does ORCP 32O say?
When there are leftover funds from an Oregon class action judgement or settlement, those funds must be used to benefit the public.
At least half of the leftover funds must go to the Oregon State Bar to fund legal aid across Oregon. The other half goes either to the OSB to fund legal aid or to any entity for a purpose directly related to the class action or directly beneficial to the interest of class members.
What are leftover funds?
Leftover funds come from either damages that were not claimed during the claims period or damages that the court deemed not practicable to pay to class members.
How do lawyers follow ORCP 32O?
If there is a chance for leftover funds, when the court enters a judgement or approves a proposed settlement, make sure you include a plan for disbursing leftover funds.
How must lawyers distribute leftover funds?
- At least fifty percent of leftover funds must be delivered to the Oregon State Bar Legal Services Program to fund Oregon legal aid. Contact the Legal Services Program for more information about how to deliver funds.
- The other fifty percent may go to the OSB Legal Services Program, or it can go to a different organization like the Oregon Law Foundation. If disbursed to an organization other than the OSB Legal Services program, the court must determine that the funds will be used either for purposes that are directly related to the class action or are directly beneficial to the interests of class members.
How does the OLF connect to the interests of class members?
The Oregon Law Foundation primarily funds efforts to reach justice for all in Oregon, sometimes referred to as access to justice. Although those who cannot afford legal help have a constitutional right to an attorney in a criminal case, no such right exists in the civil court system. When someone’s family is in danger from an abusive partner, when their income is at risk from an employer who will not pay wages, and when their home is threatened by a landlord who will not make repairs, there is no right to an attorney. Only some can get help from publicly funded legal aid organizations or pro bono representation from volunteer lawyers. Unfortunately, there is neither enough funding nor enough volunteers to meet the civil legal needs of those with incomes so low they cannot afford the cost of a lawyer. The Oregon Law Foundation’s Civil Legal Needs Study found that 84% of Oregonians with low incomes have unmet civil legal needs and no meaningful access to justice for the issues they face.
Class actions function as a tool to provide access to the civil legal system when other tools will not work. If many people suffer harm, but the harm is too small to support individual lawsuits, class actions present a way to access justice and seek a remedy. Cy pres awards to organizations like the Oregon Law Foundation that primarily fund civil legal help for people with low incomes enhance access to justice and promote justice for all, just as class action lawsuits do.
Unlike other funders, the Oregon Law Foundation has the ability, for large awards, to target funding towards specific areas of law or specific populations in need. Contact us to see how we might be able to target cy pres funds.
Why is the OLF a great place for cy pres awards?
- Flexibility: The Oregon Law Foundation has the flexibility to use cy pres awards either to expand its annual grant program or for large awards to target funds on specific legal areas, specific populations, specific grantees, or specific projects.
- Statewide Reach: The Oregon Las Foundation funds organizations that serve clients in every Oregon county and maintains representation on its board from across the state.
- No Conflicts of Interest: The Oregon Law Foundation does not file lawsuits or represent clients in any court. The OLF is generally free of potential conflicts for the court and parties to class actions.
- Longevity and Expertise: The Oregon Law Foundation has worked since 1981 to fund justice for all in Oregon. Over that time, we have delivered over $48 million to improve the civil legal system.
- Relationships: The Oregon Law Foundation works closely with Oregon’s Access to Justice Coalition, including the courts, state and local bars, full-service legal aid providers, the Campaign for Equal Justice, immigration legal help organizations, and Oregon’s constellation of civil legal help providers. Foundation staff have decades of connection to this community, creating a deep understanding of the need for civil legal help and an ability to leverage relationships to reach justice for all.
What is the OLF’s experience with large awards?
We receive and grant out millions of dollars of IOLTA interest every year in our annual grant program. In 2014, the United States Department of Justice chose the Oregon Law Foundation as the Oregon recipient of cy pres-like funds from their mortgage settlement with Bank of America. Through that settlement, the OLF received $5.23 million of restricted funds. We invested and managed those funds, disbursing grants over a period of more than seven years. With these settlement funds, we targeted foreclosure legal help and community development legal help across the state.