Federal case law is different from California law and requires a nexus.
Circuits differ, and they have developed different principles for determining when cy pres awards may be granted.
To make the case for a cy pres award to a nonprofit in federal court, it is generally necessary to select a recipient for which the nexus requirement can be met, and to present a factual basis for that conclusion.
Generally:
Class members should be compensated first. Remaining funds could be considered only after additional distributions to the class are not feasible.
Cy pres awards recipients should “reasonably approximate” the interests of class members. Courts have considered a number of factors, including: the purposes of the underlying statutes claimed to have been violated; the nature of the injury to the class; the characteristics and interests of the class members, including their location; the reason that settlement funds were unclaimed; and, the closeness of the fit between the class and the cy pres recipients.
There should be no conflicts of interest in selecting the nonprofit recipients (i.e. it should not be a nonprofit run by the judge’s or counsels’ spouses or family members).
The nexus requirement is critical. E.g. Ramirez v. Merrill Gardens, LLC, No. 1:22-CV-00542-SAB, 2024 WL 115216, p. *21 (E.D. Cal. Jan. 10, 2024) (rejecting the designated nonprofit, Children’s Advocacy Center, but approving Legal Aid at Work as a substitute, given the nexus with a case about failure to pay minimum wages).