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Litigation slush funds, cont'd

Reader Skip Oliva of the Voluntary Trade Council writes in an email:

Recently, a state court in New Mexico gave preliminary approval to a class action settlement against several manufacturers of "flavor enhancers", such as MSG, who were accused of antitrust violations. The proposed settlement fund is about $37 million. Apparently, not one dollar will go the actual plaintiffs -- "indirect purchasers" of flavor enhancers -- and the entire fund, minus costs and attorney's fees, will be distributed to charitable organizations selected by the plaintiff's counsel, roughly apportioned according to the states where the plaintiffs reside.

I have been interested for some time in the use of class action antitrust settlements to fund various academic and non-profit groups. One of the more prominent pro-antitrust groups regularly obtains funds this way. But for an entire settlement to go to non-profits? Is this common? And has anyone ever tried to track and calculate the non-profit windfall from class action settlements?

More on litigation slush funds here, here, here, here and here.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.