Increase Access to Justice for All Californians with Awards of Class Action Residual Funds

If you designate your class action residual funds to the legal aid community, you can support access to a legal services for people across the state. Similar to class action representation, where most class members cannot afford an attorney to help them, legal aid nonprofits help people who also can’t afford an attorney. Without legal help, people in need may face hunger, unsafe housing conditions, and workplace violations. Legal services organizations help people understand and protect their rights and promote clear legal resolution of cases.

This opportunity to designate residuals arises when class action litigation results in monetary awards that are not fully claimed. This can happen when class members cannot be located, when they do not cash their settlement checks, or when the amount due to some class members is too small to justify the administrative costs of disbursing those funds.  

When this occurs, the common law doctrine of cy pres could be applied. A cy pres designation distributes unclaimed or residual class member funds to nonprofit organizations that serve interests shared by members of the class or address issues similar to those at issue in the litigation. California has additional guidance through our Code of Civil Procedure that is more specific than the common law doctrine.

Legal Aid Organizations Are Expressly Authorized Recipients Under California Law.  The State of California has codified the cy pres doctrine for courts’ use in disposing of class action residuals in Code of Civil Procedure Section 384.

Although some class action plaintiff and defense counsel may designate the state’s unclaimed property fund as the recipient for residual funds, this contradicts the public policy stated in CCP 384, as well as missing an important opportunity to contribute to the well-being of all Californians. According to CCP 384, designating funds “either to further the purposes of the underlying class action or causes of action, or to promote justice for all Californians … is in the public interest, is a proper use of the funds, and is consistent with essential public and governmental purposes.”