The UNC School of Law’s Economic Justice Clinic was named the beneficiary of a cy pres award arising from a $2,500,000 class action settlement.
The cy pres award came from a class action lawsuit in which Karl Gwaltney ’12, partner at Maginnis Howard, represented the plaintiffs against a large company that charged North Carolinians more than state law allows for receiving their own medical records. Under the settlement, class members were sent settlement checks for the full amounts they had been overcharged, plus statutory penalties, without having to file claim forms. Some settlement checks were never cashed. Rather than let that money revert to the company, the parties agreed that it would go to a cy pres recipient.
“Cy pres” is a Norman French term meaning “as near as possible.” When deciding how to distribute leftover funds from a class action lawsuit, the court looks for a recipient that is working to address concerns similar to those raised in the class action. The plaintiffs and their attorneys have an opportunity to weigh in on who the cy pres recipient should be, and the court typically approves their recommendation, as long as they’ve clearly articulated how the recipient’s mission is connected to the purpose of the class action.
Gwaltney’s named client had been overcharged $66. “It was a small amount of money but it shouldn’t have been charged,” said Gwaltney. “Nobody hires a lawyer over $66. Having no practical way to redress a small but legitimate claim is a primary reason the class action mechanism exists — and is also a reason legal clinics exist.”
“The Economic Justice Clinic represents people in positions similar to those of the people I represented here, so it was the right fit,” said Gwaltney. “And when you support a clinic, you get two benefits — a client gets represented who likely wouldn’t be otherwise, and students get trained to be lawyers who can help with these issues in the future, regardless of their career paths.”
Professor Kate Elengold, director of the Economic Justice Clinic, has worked closely with Gwaltney over the years, taking case referrals from him and bringing him in as a guest lecturer in the clinic. She was still shocked when she learned about the award.
“I’m so grateful to Karl Gwaltney for the many ways he has supported Carolina Law and the clinical programs, including by designating the Economic Justice Clinic as the cy pres recipient of a class action settlement he negotiated on behalf of injured consumers,” said Elengold. “It is quite a gift for an alumnus to help afford current students greater opportunity both to learn and to serve more North Carolinians in need of legal help.”
Gwaltney experienced the benefit of clinic participation firsthand. During his time as a Carolina Law student, he worked in what was then known as the Juvenile Justice Clinic. “I took that work — and having actual clients — very seriously, and I know that the faculty leading the clinic [Barbara Fedders and Tamar Birckhead] did as well,” said Gwaltney. “Carolina Law does a great job putting these opportunities in front of students and then students get the type of training that really sticks with you long term.”
Directing a cy pres award to a Carolina Law clinic is a unique and impactful way to support the School. When asked what message he has for other alumni, Gwaltney said, “Carolina Law prepares students in countless ways, and once we become alumni, there are countless ways for us to give back to the School, too.”
For alumni who do class action work, Gwaltney suggests keeping clinics in mind for cy pres awards. “There’s a lot of important work being done at all of Carolina Law’s clinics, and there is a lot of opportunity to direct awards to other clinics in a similar way.”
But, there are many other ways for Carolina Law alumni to lend support to clinics. “A great place to start is serving as a guest lecturer, hosting a panel, or calling the professors who lead clinics or courses in the area in which you practice and asking how you can support what they’re doing,” said Gwaltney.
The fund represents new opportunities for the Economic Justice Clinic. Elengold and her team are being thoughtful as they weigh which opportunities will have the greatest impact and increase their capacity to help North Carolina consumers.
