Name Legal Aid at Work as a recipient of cy pres funds
We hope you will join the many lawyers and firms across California that help support Legal Aid at Work (formerly Legal Aid Society-Employment Law Center) by including our organization as a recipient of cy pres funds. These monies are essential in sustaining programs that serve low-wage workers, clients who would go without representation but for the services we provide.
- Any unpaid cash residue or unclaimed or abandoned class member funds generally attributable to California residents, plus any accrued interest that has not otherwise been distributed pursuant to order of the court, shall be transmitted as follows:
- A) Twenty-five percent to the State Treasury for deposit in the Trial Court Improvement and Modernization Fund to provide grants to trial courts for new or expanded collaborative courts or grants for Sargent Shriver Civil Counsel.
- B) Twenty-five percent to the State Treasury for deposit into the Equal Access Fund of the Judicial Branch, to be distributed in accordance with Sections 6216 to 6223, inclusive, of the Business and Professions Code.
- C) Fifty percent to one or more of the following: nonprofit organizations or foundations, to support projects that will benefit the class or similarly situated persons, further the objectives and purposes of the underlying class action or cause of action, or promote the law consistent with the objectives and purposes of the underlying class action or cause of action; child advocacy programs; or nonprofit organizations providing civil legal services to the indigent.
- Thus under the amended law, LAAW remains a qualified designee for at least 50 percent of any unpaid cash residue or unclaimed or abandoned class member funds generally attributable to California residents.
- Note that in class cases where non-residents of California are included in the class, it may be possible to ask the Court to designate LAAW as the cy pres beneficiary with respect to any unpaid cash residue or unclaimed or abandoned class member funds generally attributable to class members who are not California residents. In such cases LAAW may be designated as a cy pres beneficiary for more than 50 percent of any unpaid cash residue or unclaimed or abandoned class member funds in such cases.
- However as to this and other unanswered questions, it remains to be seen how the California Courts will interpret these amendments to California Code of Civil Procedure, Section 384.
- cy pres monies must be used by nonprofits to:
- support projects that will benefit the class or similarly situated persons; or
- further the objectives and purposes of the underlying class action or cause of action; or
- promote the law consistent with the objectives and purposes of the underlying class action or cause of action; child advocacy programs; or
- fund nonprofit organizations providing civil legal services to the indigent.
- Thus, LAAW is an appropriate designee of cy pres funds in almost any California class actions.
- LAAW remains the preferred designee for monies arising out of wage and hour and other employment-based class actions. But it also is an appropriate recipient of monies arising out of consumer, antitrust, privacy, and securities class action.
- Although there is no specific federal statute permitting cy pres awards to legal services organizations, LAAW could be an appropriate cy pres beneficiary in many federal class action cases, including any case involving employment law. Indeed, over the past 10 years, LAAW (under its prior name, Legal Aid Society-Employment Law Center) has been found to be an appropriate cy pres beneficiary in class actions raising a wide variety of employment law claims, as well as consumer and antitrust claims.
- Under federal case law in the Ninth Circuit, the recipients of cy pres funds must have a nexus to class claims. The U.S. District Court for the Northern District of California generally requires that there be a nexus between the mission of the cy pres recipient and the subject matter of the lawsuit. See, e.g., the Northern District’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. See, e.g., Dennis v. Kellogg Co., 697 F.3d 858 (9th Cir. 2012); Nachshin v. AOL, LLC, 663 F.3d 1064 (9th Cir. 2011).”). Dennis and Nachshin both affirm the rule that “to ensure that a class action settlement retains some connection to the plaintiff class and the underlying claims, . . . a cy pres award must qualify as the next best distribution to giving the funds directly to class members,” and they both hold that the Ninth Circuit “require[s] that there be a driving nexus between the plaintiff class and the cy pres beneficiaries.” Legal Aid at Work meets this requirement in a wide range of employment class actions brought by the plaintiffs’ bar. For example:
- Our Wage Protection Program represents low-wage workers who are the victims of wage violations. The wage claims made by our clients frequently have a direct connection to the claims made in wage-and-hour class actions brought by workers who are seeking relief under the federal Fair Labor Standards Act and under California wage-and-hour laws. Indeed, where there is a settlement of claims for unpaid overtime, meal and rest break claims, or wage statement violations, the claims brought by plaintiffs’ attorneys are precisely the claims that we make for low-wage workers — so there is the requisite nexus to designate LAAW as a cy pres beneficiary in wage-and-hour class actions.
- This would hold equally true for many class actions related to employment law, including discrimination, denial of leaves and accommodations, unequal pay, privacy, and other terms and conditions of employment — claims that are also brought by LAAW on behalf of low-wage workers.
- Bryan Schwartz Law
- Cohelan Khoury & Singer
- Feinberg, Jackson, Worthman & Wasow
- Goldstein, Borgen, Dardarian & Ho
- Leonard Carder LLP
- Leiff Cabraser Heimann & Bernstein, LLP
- Minami Tamaki LLP
- Rudy, Exelrod, Zieff & Lowe, LLP
- Sanford Heisler, LLP
- Schneider Wallace Cottrell Konecky Wotkyns LLP
- Zelle LLP
Legal Aid at Work has been a leader in advancing the rights of low-wage workers by taking on and winning important and ground-breaking law reform cases; representing individuals in enforcement actions; directing workers’ rights clinic sites across California; engaging in community education; advocating for legislation to strengthen workplace rights; and filing amicus briefs, including in many of the most important employment law cases in the appellate courts.
Our advocacy on behalf of low-wage and unemployed workers and their families has become even more critical now, as the Trump administration begins to mount attacks on civil and workplace rights. We see how our clients, many of whom are immigrants, are encountering an uptick in wage theft, discrimination, retaliation, intimidation, and hateful attacks in this new political climate. And we expect fulfillment of the administration’s promise to eliminate protective regulations and reduce enforcement actions.
By designating cy pres funds to Legal Aid at Work, you can help our clients and their communities fight back and continue to pursue their claims of unlawful conduct and policies. Enforcing the law is especially crucial at this time, given the White House’s apparent tolerance of bias and disregard for the rule of law. And it allows our clients to resist through use of our legal system.
We meet both state and federal requirements to qualify for cy pres awards
Cy Pres under California law:
Legal Aid at Work (“LAAW”) is a worthy recipient of cy pres funds in California class actions. By state statute (California Code of Civil Procedure, Section 384), a nonprofit legal organization can receive cy pres allocations. California Code of Civil Procedure, Section 384 law has recently been amended to change the formula for cy pres awards as follows.
(1) As to allocation of distributions:
2) As to the use of cy pres awards:
Cy pres under federal law:
It should be pointed out that some federal courts outside of the Northern District of California do not strictly 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 would have even more leeway to make Legal Aid at Work a cy pres beneficiary in a broad array of class actions. In such courts outside of California, LAAW may be an appropriate beneficiary in antitrust, consumer, or privacy class actions, as well as in class actions raising employment law, wage-and-hour, discrimination, denial of leave and accommodations, unequal pay, or privacy claims.
Some of the firms that have designated us to receive cy pres funds
If you have questions about designating Legal Aid at Work to receive cy pres funds, or about the amendment to California Code of Civil Procedure, Section 384, please contact our president, Joan M. Graff, at firstname.lastname@example.org, or Mike Gaitley, who directs our Workers’ Rights Clinic, at email@example.com. You can also reach Joan or Mike by calling 415-864-8848.