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

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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.

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Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.