We previously reported on the uncertainty of cy pres settlements in class action lawsuits. Although the Supreme Court granted cert on the issue, the Seventh Circuit weighed in during the interim by approving a settlement that included a potential payout to cy pres recipients.

The case arose out of a million phone calls made to consumers throughout 2011 and 2012 in which people were offered a chance to go on a free cruise if they agreed to participate in a political survey. Plaintiffs filed a class action lawsuit under the Telephone Consumer Protection Act seeking damages against Caribbean Cruise Line and other defendants for the calls. The district court certified the class and ultimately granted partial summary judgment in favor of the plaintiff. A trial was scheduled. However, the parties agreed to settle the suit in lieu of going to trial. The defendants agreed to pay between $56 million and $76 million into a fund to be paid out to the class members. The agreement also specified that if claimants failed to timely cash checks from the fund during the second round of payments, the remaining funds would go to appropriate cy pres recipients, subject to the district court's approval.

One class member appealed the approval of the settlement alleging that the notice to class members was inadequate – specifically, that the notice was unclear in its description of the process for selecting cy pres recipients. However, the Seventh Circuit found that because the notice included instructions for recommending recipients and also provided a website for members to find out more information, this was sufficient to meet the notice requirements specified under the Federal Rules.

Birchmeier v. Caribbean Cruise Line, Nos. 17-1626, 17-1778, 17-1953, 17-1969, 17-1984 & 17-2857 (7th Cir. July 24, 2018).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.