Cy Près Settlements in Privacy Class Actions

Abstract

This essay considers the potential for using cy près settlements in privacy class actions. These settlements are a procedural mechanism to overcome distribution challenges in class actions. When it is too burdensome to prove individual claims or too costly to distribute damages to class members, courts on occasions award damages to a charity or non-profit organization involved in work serving the class members’ interests. These controversial settlements have been gaining attention in various legal systems. The U.S. Supreme Court recently considered their propriety in Frank v. Gaos, while courts in Canada and several Latin American countries have been experimenting with cy près as well. The essay uses these cases to explore how this procedural mechanism can be particularly useful in privacy class actions. While cy près settlements require proper judicial supervision to prevent abuse, the chapter concludes that they can help to deter privacy invasions, enforce privacy laws, and provide plaintiffs with some measure of indirect relief when those laws are violated.

Keywords: Privacy Law, Class Actions, Privacy Class Actions, Cy Pres Settlements, Frank v Gaos