A Blow to Legal Ethics from an Unlikely Source

scales of justiceMark Chenoweth is General Counsel of Washington Legal Foundation

I cannot recall for sure when I first heard about the American Judicature Society (AJS), but it was probably about 20 years ago when my work-study job in college included re-shelving volumes of Judicature at the campus law library. There was a time when AJS was a pillar of the American legal establishment, led by the likes of the late Chief Justice and former Secretary of State Charles Evans Hughes, but that time has long since passed.

So, I was not surprised to hear that AJS decided to close its doors last month. After 101 years in the business of “promot[ing] fair and impartial courts through research, publications, education, and advocacy for judicial reform,” the AJS board has concluded that it can’t keep going.

There are always multiple reasons for the failure of a non-profit organization, but a primary factor is invariably the lack of revenue. And indeed AJS President Tom Leighton issued a statement suggesting that AJS’s “membership model has become more challenging” in recent years and that “new nonprofit entities with organizational and financial structures more suited to the times have joined AJS in the fight” for a fair and impartial justice system.

I had not seen anything about AJS or even thought about it for years when I heard the news of its demise, but I decided to visit its website to see what the group has been up to lately. I was shocked to discover that one source of revenue AJS has been seeking—I don’t know for how long—is money from judicial cy près awards. When an organization ostensibly devoted to fair and impartial justice, one whose slogan is “Advocating Integrity in American Justice,” resorts to hitting up judges for cy près funds, it has truly outlived its usefulness.

By all appearances, AJS does not seem to be the least bit embarrassed by this fundraising tactic. There is a prominent “Key Link” on the homepage to “Cy Pres.” I actually clicked on it thinking that AJS might have posted an eloquent explanation that I had missed about the ethical minefield represented by cy près awards. Instead, the link takes one to a page that says the following:

If you are a Federal Judge you can donate to AJS by giving Cy Pres damages amounts that were unclaimed in class action lawsuits. Simply fill in the information below to make your donation today!

And then there is a short form to fill out, though how exactly the short form suffices to accomplish a donation is not obvious. Perhaps AJS just views the form as a shorthand way of letting the organization know that cy près award funds are on the way.

In case you are not aware, cy près is highly controversial because it infects the settlement process with perverse incentives having nothing to do with the best interests of class members. An organization like AJS, which spends a significant share of its time and resources advocating for judicial ethics, should really know better than to tout such a discredited practice—let alone encourage judges to engage in it to AJS’s own benefit! At a bare minimum, AJS should counsel judges to consider carefully the ethical ramifications of awarding cy près funds to AJS before doing so. The ethical disconnect here astounds, though I trust that AJS’s hitting hard financial times has nothing to do with the oversight.

Meanwhile, in our own efforts to support fair and impartial justice, Washington Legal Foundation recently published a Working Paper by James Beck and Rachel Weil entitled “Cy Pres” Awards: Is the End Near for a Legal Remedy with No Basis in Law? In it they explain further the problems with cy près (including ethical conflicts of interest) and discuss several recent court opinions casting doubt on the practice. Rather than summarize the article here, I will simply recommend that you click on the link to check it out for yourself.

As it happens, at least once in the past year WLF itself was contacted as the designated recipient of cy près funds, but we figured out pretty quickly that the caller was looking for the Legal Foundation of Washington. Just to be clear, WLF does not accept cy près funds. So, if you are judge, please do not award us any leftover class action funds. Do, however, check out the Beck and Weil paper for a thoughtful discussion of the legal, constitutional, and ethical concerns with cy près awards in the class action litigation context.

Also published by Forbes.com at its WLF contributor site

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s