AOL Privacy Deal Violated Cy Pres Standards: 9th Circ.

Law360, New York (November 21, 2011, 4:37 PM EST) -- The Ninth Circuit ruled in a published opinion Monday that cy pres donations must bear some relevance to the statutes upon which allegations are brought when it reversed the settlement approval for an online privacy class action against America Online LLC.

The three-judge panel remanded the suit, finding that the charities that AOL made donations to in the place of awards to individual class members did not meet the standards of cy pres.

The cy pres doctrine allows a court to distribute settlement awards to third parties if distribution to the actual injured parties is unrealistic. To comply with cy pres standards,...

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