Cy Pres Standard Dispute Settled With Reasonable Approximation

The District Court for the Southern District of New York recently addressed whether the "next best" or "reasonable approximation" standard should apply when the court evaluates proposed cy pres designations in class action settlements. Observing that the Second Circuit had not definitively resolved this issue to date, the district court engaged in a thorough evaluation of the origins, justifications, and policy implications of the two standards. In the end, the court concluded that the reasonable approximation standard was superior and consistent with the court's mandate throughout the settlement approval process: to approve a fair, reasonable, and adequate settlement; not the best possible one.