Northwestern Law Study Takes Aim At “Faux Class Actions”

[WSJ_law_blog]

The Searle study concludes that awarding charitable grants violates Article III of the Constitution, which restricts judges to considering only cases and controversies. “Ordering the transfer of money from one private actor to another private actor whose rights have in no way been violated inescapably contravenes Article III.”

But the Searle study sees something even more sinister afoot. Cy pres grants, it asserts, attempt to conceal “faux class actions,” which the study defines as a suit “where the individual damages are so minimal … that as a practical matter the function of the suit as a means of compensating injured victims is all but completely undermined.” In these cases, the argument continues, no one does well but the lawyers.

There are plenty of counter-arguments, to be sure. Class actions are aimed not just at compensating class members, but also holding corporations accountable ─ a goal still served in cases involving cy pres grants. And plaintiffs’ lawyers, arguably, should not be faulted if class members don’t get off their duffs to claim damage payments.

If you are left wanting more, here’s a video interview with Northwestern law prof Martin Redish, the lead author of the Searle study.