AUSTIN – Attorney General Paxton has joined two Montana-led cert-stage amicus briefs before the U.S. Supreme Court, arguing against advocacy groups receiving large funds in settlement cases when the victims receive little or nothing, a press release states.
At issue are cy pres awards, which are awards often granted to non-class third-party advocacy organizations when courts decide that they can do more for a class than the class members could do for themselves.
In the case of William Yeatman v. Kathryn Hyland, et al., despite evidence showing that funds could be distributed to class members, the New York City-based U.S. Court of Appeals for the Second Circuit opted instead to give $2.25 million to an outside organization and no funds to class members.
The press release states that this violates both federal rules and the rights of the class members. As the brief in the case states: “Cy pres awards pose another pernicious problem to class members. They divert settlement funds to non-class third-party advocacy organizations that promote certain viewpoints while depriving class members of the funds owed to them.”
In the case of Anna St. John v. Lisa Jones, et al., the St. Louis-based U.S. Court of Appeals for the Eighth Circuit affirmed a district court’s decision to approve an approximately $39 million settlement that directed only 30% of the funds to the actual class members; the rest was paid to an outside organization.
The brief opposes the outcome: “But making further distributions to class members—whether to newly identified class members or already participating class members—should always be the preferable remedy [rather] than giving awards to non-class third-party organizations that don’t even allege an injury.”