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The Law
California Code of Civil Procedure Section 384(b) permits courts to order that residual settlement funds be paid to “…non-profit organizations or foundations to support projects that will benefit the class or similarly situated persons…or to nonprofit organizations providing civil legal services to the indigent.”
The Cy Pres doctrine also enables the distribution of statutory damages to nonprofit organizations, when damages are so small that distribution to individual class members would be impractical or diminish the effect of the penalty. In non-class action suits, or prior to class certification, settling defendants may be willing to direct all or part of the settlement payments to a nonprofit organization.
Federal courts also may consider Cy Pres awards of unclaimed settlement funds.
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For more information please contact
Paul Tepper, Executive Director
WESTERN CENTER ON LAW & POVERTY
3701 Wilshire Boulevard, Suite 208, Los Angeles, CA 90010-2826
(213) 235-2612
ptepper@wclp.org
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