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Hans Bader on challenging class-action abuses

Hans Bader, senior attorney and counsel for special projects at the Competitive Enterprise Institute, in a piece featured on CEI's blog OpenMarket.org, discussed recent challenges to class-action abuses focusing his commentary specifically on cy pres distributions.

In his discussion of Nachsin v. AOL, Inc., where the Ninth Circuit struck down cy pres to local Los Angeles charities unrelated to the class or the claims of the lawsuit, Hans cited the appeals court,

As the appeals court noted, judges have often wrongly used class-action settlements to enrich groups that have nothing to do with consumers' rights, like the ACLU: "courts have awarded cy pres distributions to myriad charities which, though no doubt pursuing virtuous goals, have little or nothing to do with the purposes of the underlying lawsuit or the class of plaintiffs involved," such as "awarding $2 million from an antitrust class action settlement to fifteen applicants, including the San Jose Museum of Art, the American Jewish Congress, a public television station, and the Roger Baldwin Foundation of the American Civil Liberties Union of Illinois.

Ted Frank of PointofLaw and the Center for Class Action Fairness who represented the objecting consumer in the AOL settlement is also "challenging a settlement in a class-action lawsuit over mishandling of Native American trust accounts that massively enriched some favored claimants while ripping off others. CEI filed an amicus brief in support of that challenge in a case called Cobell v. Salazar."

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.