A Call to the Private Bar:
Join the many lawyers and firms across California that help support Legal Aid at Work by including our organization as a recipient of cy pres funds. These monies are essential in sustaining programs like ours that serve low-wage workers.
What is a “cy pres” award?
A “cy pres” award is a distribution of money that is left over from a class action settlement because individual class members fail to claim their portion of the settlement or when it is impractical to distribute very small amounts of money to large numbers of class members. In many circumstances, and under court supervision, these leftover monies can be awarded to nonprofits, such as Legal Aid at Work (“LAAW”).
California state law
LAAW is a proper recipient of cy pres funds in California class actions according to California Code of Civil Procedure § 384. Under that law, any nonprofit organization that provides “civil legal services to the indigent” is a proper recipient of cy pres funds. LAAW is such a nonprofit organization and is therefore an appropriate designee of cy pres funds for almost any type of class action in California state court.
Under federal case law in the Ninth Circuit, the recipients of cy pres funds must have a nexus to class claims. (See, e.g., the Northern District of California’s Procedural Guidance for Class Action Settlements (“The parties should address their chosen cy pres awardees, if any, and how those awardees are related to the subject matter of the lawsuit and the class members, including their location.”). Legal Aid at Work meets this requirement in a wide range of employment class actions brought by the plaintiffs’ bar. For example, LAAW’s Wage Protection Program, which represents low-wage workers who are the victims of wage violations, has a clear nexus to wage/hour class actions because the wage claims made by our clients are often the same type of claims made in wage-and-hour class actions brought by workers under the federal Fair Labor Standards Act and under California wage-and-hour laws.
LAAW’s other programs also may have a nexus to many other class actions related to employment law, including discrimination, denial of leaves and accommodations, unequal pay, privacy, and other terms and conditions of employment.
Note: Some federal courts outside of the Northern District of California do not require that recipients of cy pres funds have a nexus to class claims. In those courts, the nexus may be only one of a number of factors considered in determining whether to award a cy pres distribution to a nonprofit organization. Those courts therefore would have even more leeway to make Legal Aid at Work a cy pres beneficiary in a broad array of class actions, regardless of whether they are based on employment law claims.
If you have questions about designating Legal Aid at Work to receive cy pres, or to request a declaration by LAAW in support of your motion to designate LAAW as a recipient of cy pres, please contact:
- Joan Graff, President, [email protected], 415-593-0116
- Mike Gaitley, Sr. Staff Attorney, Community Legal Services, [email protected].