Cy Pres

Cy pres (pronounced "see pray," from a French phrase meaning "as near as possible") is a doctrine that lets a court send class action settlement money to a charity, nonprofit, or other organization whose work indirectly benefits the class. It is most often used for leftover funds after checks go uncashed, or when the class is so large and individual damages so small that direct payments would cost more than they are worth.

Cy pres is controversial when it replaces payments to class members instead of supplementing them. In Frank v. Gaos (2019), the U.S. Supreme Court reviewed an $8.5 million Google privacy settlement in which most of the money would go to six cy pres recipients, more than $2 million to class counsel, and none to absent class members. The Court sent the case back on a standing question without deciding whether such settlements are fair, but the case drew attention to the practice, and Justice Thomas wrote separately that he would have rejected the settlement.

Courts now generally require that direct payments be tried first and that cy pres recipients have a real connection to the class's interests. Judges also look for conflicts, such as recipients tied to the defendant, the lawyers, or the judge. Under the 2018 amendments to Federal Rule of Civil Procedure 23, courts consider the effectiveness of the proposed distribution method when deciding whether relief to the class is adequate.

For class members, cy pres is a reason to cash settlement checks promptly and file claims on time, since unclaimed money often goes elsewhere. See what happens to unclaimed settlement money and why payouts can be smaller than expected.