Another Circuit Weighs In On Cy Pres Awards In Class Settlements

In an April 30th post, we described the First Circuit's recent decision in In re: Lupron Marketing and Sales Practices Litigation, in which the court for the first time articulated the standards district courts are to apply when reviewing cy pres awards in class action settlements.  As we explained then, the court adopted the "reasonable approximation" test of the American Law Institute's Principles of Aggregate Litigation, and warned that failure to meet the test could result in the reversal of district court orders approving class action settlements that include cy pres components.  Nevertheless, although the court expressed discomfort with a settlement agreement that did not identify the recipients of the cy pres benefits, it upheld the approval of a class action settlement where the district judge exercised his discretion to apply the cy pres payments to charities whose goals were found to be sufficiently aligned with the interests of the class.