Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

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Thursday, May 6, 2010

Enhancing Competition Through The Cy Pres Remedy: Suggested Best Practices

Posted by D. Daniel Sokol

Bert Foer (AAI) suggests Enhancing Competition Through The Cy Pres Remedy: Suggested Best Practices.

ABSTRACT: TH E N O R M A L R E M E D I E S I N A private antitrust case are a combination of injunctions and treble damages that are paid out to the victim(s) of the anticompetitive activity.When an aggregate amount of damages is established, the primary objective is to distribute the damages to those who were injured. In antitrust class action litigation, however, it is often impossible or impracticable to compensate all victims. Administrative concerns may work against payments to individual plaintiffs, as in the case of an extremely large class where the fund is not sufficient to justify the transaction costs of distribution to individual claimants. Consequently, in some cases, there is money left over in the form of unclaimed funds. In such cases, courts sometimes employ the doctrine of “cy pres” to put the unclaimed funds to “the next best use,” which may include awarding funds to public interest organizations or charities for purposes related to the case. There is increasing interest in utilizing the cy pres doctrine as part of the remedy because of its potential to enhance competition. At the same time, cy pres opens up possibilities of corruption, waste, and public criticism. In this article, I provide background on the law of cy pres and suggest “best practices” for its invocation.

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