Have you ever received an envelope in the mail saying you’re part of a class action lawsuit, never opened it and threw it out?
If that settlement was for $3 million and a big percentage of those people didn’t open those envelopes, do you know what happens to all that unclaimed money? It doesn’t go to the government. It doesn’t go to the lawyers. It goes back to the company being sued.
Crazy, right? But what if there were a rule that could be imposed to have that money, or some of it, go to charity? That’s what Ohio Lawyers Give Back, a 501(c)(3) nonprofit organization, is all about.
Ohio Lawyers Give Back is an organization started by Cleveland-based law firm Dworken & Bernstein Co. LPA and one of its partners, Patrick Perotti, in accordance with a legal doctrine called cy pres. The cy pres doctrine is used in class action suits to handle settlement monies that are unclaimed by class members after distribution is finished.
In one of Perotti’s first class action lawsuits settled for $800,000, he ended up being able to give extra monies in the amount of $185,000 to Cystic Fibrosis. When he went to present that check, Brooke, an 11-year-old girl with Cystic Fibrosis gave him a hug.
“I said to myself, ‘I’m never going to stop doing this,’” says Perotti, a board member of Ohio Lawyers Give Back. “I never thought getting a degree as a lawyer would allow me to do something like this. It’s not about winning cases, it’s about doing justice. I can’t think of a better way to do justice than what we’re doing with this program.”
While Dworken & Berstein has been practicing the cy pres doctrine in all of the firm’s class action suits over the past 15 years and has distributed more than $24 million to charities in conjunction with Ohio Lawyers Give Back, not every firm does this.
“We tried to work with the General Assembly to pass a law that would require cy pres to be paid in every case, but that there had to be a designation in the court order that said exactly what happens to the money and any unclaimed funds,” Perotti says. “The legislation was strongly opposed by the Ohio Chamber of Commerce and as a result it was not passed.”
Had the law passed it would have generated $60 million a year toward charities in Ohio.
“Ninety-nine percent of businesses would never scam customers, so why they stood up for that 1 percent that does the wrong thing is beyond me, but I guess it’s because some of these companies are very big and are very powerful,” he says.
If the law had passed nationally it had the potential to provide $13 billion a year to charities.
“We do it in our firm, and we came up with Ohio Lawyers Give Back after that initial case and following this policy of cy pres,” Perotti says.
“We used Ohio Lawyers Give Back to run a website where any charity that wants to can log on and find out how cy pres works, and anybody can recommend a charity. We then talk to them and send them paperwork to get them on a list for one of the cases that gets settled. We also send that list to other lawyers in the area that do class action suits.”
Very few lawyers follow this practice, however, because it doesn’t make the lawyer any money, it actually costs money.
“I could settle my class action years earlier if I were willing to do the scam dance and settle for $750,000, and I get my one-third knowing that $500,000 isn’t going to class members, like I don’t give a damn,” Perotti says. “But I do. I don’t want to sign my name to something I know is a scam. We’re in the vast minority.” ●
How to reach: Ohio Lawyers Give Back, (800) 378-9586 or www.ohiolawyersgiveback.org
