Monies reserved to settle class action lawsuits often go unclaimed because absent class members cannot be identified or notified or because the paperwork required is too onerous. Rather than allow the unclaimed funds to revert to the defendant or escheat to the state, courts are experimenting with cy pres distributions—they award the funds to charities whose work ostensibly serves the interests of the class “as nearly as possible.”
Although laudable in theory, cy pres distributions raise a host of problems in practice. They often stray far from the “next best use,” sometimes benefitting the defendant more than the class. Class counsel often lacks a personal financial interest in maximizing direct payments to class members because the fee is just as large if the money is paid cy pres to charity. And if the judge has discretion to select the charitable recipient of the unclaimed funds, she may select her alma mater or another favored charity, thereby creating an appearance of impropriety.
Litigation challenging the national security actions of the federal government has taken a seemingly paradoxical form in recent years. Prospective coercive remedies like injunctions and habeas corpus (a type of injunction) are traditionally understood to involve much greater intrusions by the judiciary into government functioning than retrospective money damages awards. Yet, federal courts have developed and strictly applied doctrines barring Bivens damages actions against federal officials because of an asserted need to preserve the prerogatives of the political branches in national security and foreign affairs. At the same time, the courts have been increasingly assertive in cases involving coercive remedies, especially habeas, that have dramatically impacted post-9/11 national security policies. Additionally, federal courts, particularly the Supreme Court, are increasingly willing to rule against the executive in cases concerning justiciability and judicial power.
The Supreme Court, in a line of several cases over the past decade, has established a rigorous federal constitutional excessiveness review for punitive damages awards based on the Due Process Clause. As a matter of substantive due process, says the Court, punitive awards must be evaluated by three “guideposts” set forth in BMW of North America v. Gore: the degree of reprehensibility of the defendant’s conduct, the ratio between punitive and compensatory damages, and a comparison of the amount of punitive damages to any “civil or criminal penalties that could be imposed for comparable misconduct.” Following up on this pronouncement in State Farm Mutual Automobile Insurance Company v. Campbell, the Court indicated that “few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process.” Unfortunately, neither the “guideposts” nor the single-digit multiple rule have any basis in the law of due process and represent nothing more than the imposition of the Court’s own standards for punishment in place of those of the states.