Category Archives: Cy Pres

 

November 14th, 2013

Linda Greenhouse and Me

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Linda Greenhouse via New York Times

Sometimes when I write things slightly out of my wheelhouse I get a bit concerned about mucking things up and making a fool of myself. This is especially true if I’m writing about the United States Supreme Court and noting something that others didn’t feel worthy of comment.

And today I got confirmation about whether I made myself a fool. I didn’t. And not only didn’t I muck it up, but New York Times columnist and Supreme Court diva Linda Greenhouse agrees with me. Whew.

Last week I noted a statement by Chief Justice John Roberts in the matter of Marek v. Lane, which was a class action settlement involving Facebook. Instead of settlement money going to Facebook users, it went into a new fund dedicated to educating people about privacy on the Internet. These are known as cy pres settlements, meaning that due to the problems of distributing funds, this arrangement is “as near as possible” to doing just that. That is the theory.

My point was that C.J. Roberts was being rather activist in his statement, as the questions he asked about these types of settlements are those best addressed by a legislature. Roberts,  however, was asking litigants to bring him a case so that the court could address the issues that he identified.

And today Linda Greenhouse hits just that point, in a piece entitled “Bring Me A Case,” linking together several unrelated matters where various federal judges have all said, bring me a case.

With regards to Marek v. Lane, Greenhouse writes:

While this particular appeal presented too narrow a slice of the “more fundamental concerns” about this increasingly popular kind of settlement, the chief justice said, “in a suitable case, the court may need to clarify the limits on the use of such remedies.” Citing a law review article that criticized such settlements as among the “pathologies of the modern class action,” he posed six questions, ending with “and so on,” which implied that there was quite a bit more that he wanted to know.

Judicial activism can take many forms, and one way is to call for a particular kind of case in order to “feed the docket,” which I’m pretty sure is not what Roberts had in mind when he testified at his confirmation hearing that the justices were merely umpires in disputes — that they are there “to call balls and strikes and not to pitch or bat.”

As Greenhouse then writes:

[N]o one is accusing Chief Justice Roberts of any kind of ethical violation in issuing his invitation to bring the Supreme Court another challenge to the newfangled species of class-action settlement that he finds troubling. Nor am I suggesting that his statement was in any way improper. But it sheds light on an underappreciated aspect of the court’s institutional behavior, on what one might call the care and feeding of the docket.

…

The court is an active participant in shaping its own destiny through a continuing dialogue with a legal system attuned to its every nuance and primed to respond accordingly. The court’s role in this respect might be seen as closer to legislative than judicial; one federal judge I spoke with this week said the chief justice, with his list of questions about class-action remedies, sounded like the chairman of the Senate Judiciary Committee convening a hearing. (emphasis added)

Now I’m not so horribly vain as to think my little posting about this last week caught Greenhouse’s attention, even though I wrote language almost identical to her theme:

This call to action (‘Send me a good case so we can put our imprimatur on the issue!’),  goes quite a ways away from merely umpiring for the people on different sides of an issue.

The fact is, my blog wasn’t mentioned anywhere, nor linked to, nor was the post even tweeted about. I simply published it and it died on the spot.

But I’m gratified to see that the issue is now front and center. The idea that Roberts espoused, that he is there merely as an umpire, is belied by his call for a case and the legislative-like questions that he both asked and wanted to answer in a subsequent opinion.

 

November 6th, 2013

Did CJ Roberts Trash His Role as “Umpire” In Facebook Cy Pres Case?

Chief Justice John RobertsWhen Chief Justice John Roberts appeared before the Senate in 2005 for confirmation, he famously stated that his role as Chief Justice would be “to call balls and strikes and not to pitch or bat.”

He seems now to have fully discarded the umpire’s uniform in his pursuit of making policy.

On Monday the Court denied certiorari in Marek v. Lane, which was a cy press settlement matter. Cy pres is where class action settlement proceeds don’t go to the victims due to the difficulties or expense of distribution, but go instead to a charity of some kind as being “as near as” possible to getting the funds to the actual victims. This was, as per Adam Steinman (Civil Procedure and Federal Courts Blog):

a closely watched class action against Facebook. Four class members had objected to the settlement of that class action, which included as a cy pres remedy “the establishment of a new charitable foundation that would help fund organizations dedicated to educating the public about online privacy.” The settlement was approved by the district court and on appeal to the Ninth Circuit, prompting a petition for certiorari by one of the objectors.

But while the issue of whether it’s appropriate to send the funds to a charity is a hotly debated one, created in a legislative vacuum, neither its rightness or wrongness is the issue I want to address. (See Public Justice Foundation in favor and Ilya Shapiro at Cato for opposing view.)

Instead, I draw your attention to a statement issued by C.J. Roberts (via Overlawyered), accompanying the denial of certiorari, where he discusses his desire not to call the balls and strikes, but rather, to affirmatively make decisions about policy:

I agree with this Court’s decision to deny the petition for certiorari. Marek’s challenge is focused on the particular features of the specific cy pres settlement at issue. Grant­ing review of this case might not have afforded the Court an opportunity to address more fundamental concerns surrounding the use of such remedies in class action liti­gation, including when, if ever, such relief should be con­sidered; how to assess its fairness as a general matter; whether new entities may be established as part of such relief; if not, how existing entities should be selected; what the respective roles of the judge and parties are in shaping a cy pres remedy; how closely the goals of any enlisted organization must correspond to the interests of the class; and so on. This Court has not previously addressed any of these issues. Cy pres remedies, however, are a growing feature of class action settlements. See Redish, Julian, & Zyontz, Cy Pres Relief and the Pathologies of the Modern Class Action: A Normative and Empirical Analysis, 62 Fla. L. Rev. 617, 653–656 (2010). In a suitable case, this Court may need to clarify the limits on the use of such remedies.

This call to action (‘Send me a good case so we can put our imprimatur on the issue!’),  goes quite a ways away from merely umpiring for the people on different sides of an issue.

Roberts didn’t  ask Congress to step up to the plate, he asked instead for a suitable case so that the judiciary can perform a legislative function.

In a blog post back in 2009, the Drug and Device Law Blog — very much a defense oriented blog — raised the same issue in excoriating the concept of cy pres. They wrote:

Under our tripartite system of government, the legislature is supposed to make the laws and the executive to enforce them. Where is the law or regulation allowing, as a consequence of some legal violation, one private person’s money to be taken away and given to some other private person(s) whom the violator didn’t injure? There isn’t any. If there were, there’d be no need to resort to cy pres, because the statute or rule (assuming it were constitutional – which is a stretch) itself would provide the distribution scheme, not some vague notion of “equity.” The government can impose civil or criminal fines for conduct that’s illegal, without regard to causation or damages, but the money in those situations goes to the government as the sovereign enforcer of the laws.

But while they argued there shouldn’t be any such thing as cy pres, C.J. Roberts isn’t suggesting that it be abolished (though he is certainly open to it). What he asks is that the judiciary regulate them, hence his conclusion that the Supreme Court “may need to clarify the limits on the use of such remedies.”

And you will not find any mention in his statement suggesting that Congress resolve the matter.