Subscribe Subscribe   Find us on Twitter Follow POL on Twitter  



Cy pres and Stanford Law's Center on Internet and Society

| No Comments

Speaking of self-dealing cy pres...

I was researching a $0 settlement of a Google class action that would provide cy pres to Larry Lessig's Center on Internet and Society at Stanford Law School. I wasn't especially surprised to see that Google—whose founders are from Stanford, and whose business model aligns with Lessig's antipathy to broad applications of copyright law—is already a major donor to CIS—so much so, that CIS feels it a conflict of interest to participate in litigation where Google is a party. When a cy pres settlement donates money to a charity that the defendant was giving money to anyway, the indirect benefit to the class of a cy pres award is even more illusory: all that's really happening is a change in accounting entries. There isn't even the pathetic excuse of "deterrence" as a rationale for cy pres awards that some academics use.

But I was genuinely offended by the list of donors that CIS thanks, which included:

KamberLaw, LLC (result of a cy pres settlement)
Lerach Coughlin Stoia Geller Rudman & Robins LLP (result of a cy pres settlement)
Perkins Cole LLP (result of a cy pres settlement)

Wait a second. If CIS got money from a cy pres settlement, they got the class's money, or, at a minimum, money of the defendant who paid the settlement. Defense firm Perkins Coie certainly didn't give CIS that money: they never had possession of it. And KamberLaw and Lerach Coughlin not only did not give CIS that money, but they almost certainly got paid a giant commission in attorneys' fees for steering the money to Stanford instead of their own clients. To then take credit for that profitable diversion is adding insult to injury—and does much to further prove CCAF's point that cy pres is all too often just another form of class counsel self-dealing.

The other three beneficiaries of the proposed Google settlement are similarly offensive, either because they reflect recipients that Google gives money to, or reflect ideologically charged organizations that would be controversial among members of the class—which include me.

The case is In re Google Header Referral Litigation, Case No. 5:10-cv-04809-EJD (N.D. Cal.). CCAF (which is not affiliated with the Manhattan Institute) likely will not have time to file an amicus brief opposing preliminary approval, but if preliminary approval is granted, we will almost certainly object.

Leave a comment

Once submitted, the comment will first be reviewed by our editors and is not guaranteed to be published. Point of Law editors reserve the right to edit, delete, move, or mark as spam any and all comments. They also have the right to block access to any one or group from commenting or from the entire blog. A comment which does not add to the conversation, runs of on an inappropriate tangent, or kills the conversation may be edited, moved, or deleted.

The views and opinions of those providing comments are those of the author of the comment alone, and even if allowed onto the site do not reflect the opinions of Point of Law bloggers or the Manhattan Institute for Policy Research or any employee thereof. Comments submitted to Point of Law are the sole responsibility of their authors, and the author will take full responsibility for the comment, including any asserted liability for defamation or any other cause of action, and neither the Manhattan Institute nor its insurance carriers will assume responsibility for the comment merely because the Institute has provided the forum for its posting.

Related Entries:




Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.