CLASS ACTION RESIDUAL FUNDS ASSIST
NONPROFIT LEGAL SERVICE PROVIDERS
The law firms of Perkins & Faria and Bickerton Dang presented the non-profit legal service providers, Volunteer Legal Services Hawaii and Legal Aid Society of Hawaii, over $107,000 each in cy pres funds on June 14, 2016. Both law firms also designated the same amount of cy pres funds to nonprofit organizations Junior Achievement and Hawaii Council for Economic Education. These residual funds come from a class action lawsuit filed by the two firms against American Savings Bank. The bank was represented by Starn O’Toole Marcus & Fisher.
Cy pres is a legal doctrine originally developed to ensure the fair distribution of a trust fund. Its original meaning, from French “as near as possible,” refers to using a trust fund for its “next best use” should its original purpose fail. Today, cy pres refers primarily to residual funds left over from a class action lawsuit, but it can also refer to funds from restitution, settlements, or penalties.
On January 27, 2011, the Hawaii State Supreme Court amended Rule 23(f) [effective July 1, 2011] of the Hawaii Rules of Civil Procedure to provide that the residual funds from a class action may be distributed to nonprofit tax exempt organizations that provide civil legal assistance to low income Hawaii residents or to the Hawaii Justice Foundation for distribution to one or more of such organizations. The amended Rule 23 provided that it would be within the discretion of the court to approve the timing and method of the distribution of the residual funds as agreed to by the parties. Previously, Rule 23 was silent as to the distribution of such residual funds. The Hawaii Access to Justice Commission in May 2010 recommended the proposed amendment in order to provide increased funding to organizations that promote access to justice.
Volunteer Legal Services Hawaii has been providing civil legal assistance to low and moderate income persons throughout the state for 35 years, and through a partnership with volunteer attorneys. Services cover a broad range of civil legal matters affecting an individual’s basic living needs such as housing, employment, debt relief, and caring for family members. The $107,000 distribution to Volunteer Legal Services Hawaii helps to advance the interests of the class action members through the provision of services to individuals least able to exercise their legal rights.
Legal Aid Society of Hawaii also received a distribution from the above-mentioned class action settlement. This award will be used to help launch a workers’ right enforcement program at Legal Aid. Established in 1950, Legal Aid provides civil legal help to the most vulnerable in our community. Legal Aid has ten offices statewide and over 100 staff members dedicated to achieving Legal Aid’s vision of “Building a Just Society.”
The law firms of Perkins & Faria and Bickerton Dang have been leading the cy pres distributions for legal service providers and other nonprofits in the State of Hawaii since the Hawaii rule change. Such distributions are invaluable to non-profit legal service providers in Hawaii who have seen drastic cuts in funding, and who continue efforts to restore services to pre-recession levels.
The Hawaii Access to Justice Commission created a cy pres toolkit at (http://www.hawaiijustice.org/hawaii-access-to-justice-commission/what-is-cy-pres) to assist attorneys who are interested in providing a distribution of residual funds to nonprofit tax exempt organizations that provide legal services to the indigent. The toolkit provides sample documents such as orders and stipulations.