Last week, I was  pretty hard on Adam Liptak for his exceptionally vapid yet inflammatory piece on a non-existent debate on the efficacy of the death penalty.  Fortunately for society, his attempt to create an issue was ignored in all quarters.

This week, however, Liptak redeems himself with  a fascinating piece, and actually brings some substance to his writing, about the use of left-over class action monies by district court judges.  The lesson here is that Adam should stick to topics with which he is more familiar, and then he does a fine job.  But for now, he’s out of the dog house.

Has anyone wondered what becomes of those millions of dollars put into a fund by Mel Weiss, after he’s already gotten his share of the booty, for the benefit of the class?  It seems that plenty of people ignore the class action claim form, likely under the belief that the $12.58 isn’t worth the 5 hours it will take to fill out the forms, collect the paperwork from 12 years ago and ship it all off to the administrator with the promise of hearing something, maybe, eventually.

Judges all over the country have gotten into the business of doling out leftover class-action settlement money, sometimes to organizations only tangentially related to the subject of the lawsuit.

Judges are turning into grant administrators, and some of them are starting to enjoy it.

Well, this certainly opens up a new line of questioning during the Senate hearings.  But this gives rise to some very interesting issues.  Very interesting indeed.  Let’s start at the top.  Who’s money is this? 

The funds have been taken away from the bad guy, so it can’t be given back even if left unclaimed.  The claimants haven’t come forward to take it, so the court can’t distribute it amongst the unknown class members.  But there are the known class members, the named plaintiffs.  And there is the Public Fisc.  And then there are the good causes.  The favored use is for the judge to distribute the excess funds to “good causes.”

Class-action lawyers call these creative uses of settlement money “cy pres,” from the French expression “cy pres comme possible,” or “as near as possible.” They borrowed the term from the law of charitable trusts. If, say, a charity that was specified in a will no longer exists, the law sometimes allows the estate’s money to be used for a similar cause under the cy pres doctrine.

And what’s wrong with judges taking money from bad guys and giving it to good causes?  Plenty.  First, this was not the purpose for which the law authorized the funds to be taken.  When we disconnect the remedy from the right, courts are left without their legitimacy and are exercising naked power.  Courts should not be allowed to do this.  It’s not enough that the bad guy has been punished.  There has to be a connection between the money taken and where it ends up.  Government can’t just take money away from people (or entities) and then gift it away at the whim of the court.  At least not with a straight face.

Distributing the excess funds amongst the known plaintiffs/claimants seems to reconnect the remedy with the right (or wrong, if you prefer).  But this solution has been rejected because it would “provide a windfall to the relatively few [individuals] who had made claims.”

So instead, the solution was for a United States District Judge to hand-pick causes, law schools, hospitals and the like to receive the benefit. 

This strikes me as not merely wrong, but insane.  Initially, why would it be a “windfall” to give the damages to the individuals who were injured?  If it’s because their injuries didn’t merit the amount used to fund the class payout, that’s none of the court’s business.  It’s a settlement fund.  The defendant elected to give up the money to the class, and the class consists of whoever decided to make a claim.  It’s the claimants money.  Every penny of it (except Mel’s piece).  If it is a windfall, so what?  It’s their windfall, not the judge’s to dole out like a Saudi prince.

As Professor Issacharoff, the main author of the American Law Institute draft on the subject says, “I don’t care how much good you want to do. Do it with your own money, not someone else’s money.”  It doesn’t matter that the causes are good, or places where “we” like the money to go.  It matter that it’s not the judge’s to give.

Even to those of us who are charitably minded, if the settlement was with a gun manufacturer, would we be thrilled with the judge giving millions to the NRA for handgun education?  So don’t let the end blind you from the means. 

“You’re taking money from someone who does not deserve to have it — the defendant — and you’re putting it to a public good,” said Peter F. Langrock, a Vermont lawyer who spoke with pride about using money from the settlement of an environmental class-action suit in Alaska to finance a high school science program.

And were the Vermont school district taxpayers harmed.  What about my school district’s taxpayers?  They were certainly “harmed” to the same extent, if one is going to try to provide some logical nexus for the handout.  Just because someone likes the end result doesn’t make it legitimate.

The worst part about this scheme is that lawyers stand outside the courtroom door with hats in hand for their client causes.  There is little as unseemly than judges being courted by their alma mater for a handout.  Since when is it in a federal judge’s job description to decide the worthiness of charitable causes with other people’s money?  This is scandalous.

But the new judicial role does not fit well with the old one. “It is,” Professor Issacharoff said, “an invitation to wild corruption of the judicial process.”

You bet.  And a begrudging tip of the hat to Adam Liptak from outing this situation.  Maybe I’ve been too hard on him.