Beware of Cy Pres Bearing Gifts

The Arizona Supreme Court is presently considering an amendment to Arizona Rule of Civil Procedure 23, which governs class actions. The proposed amendment requires that at least 50% of all residual class action funds be distributed to a state legal aid organization that provides legal services for low-income individuals. Whether the Court adopts this amendment, the proposal presents an opportunity to comment on the current trend of allocating residual class action funds to state legal aid organizations, ostensibly pursuant to the “cy pres” doctrine. Although allocating residual class action funds to a legal aid organization undoubtedly puts these funds to a productive use, to call it cy pres” is disingenuous. It is improper for a court to adopt such a change by using the cy pres doctrine as a Trojan Horse.