34 Ohio charities to share $14 million unclaimed in class-action lawsuit
Money from settlement went unclaimed
Saturday, July 12, 2008
Alison Grant
Plain Dealer Reporter
Thirty-four Ohio charitable organizations are about to share in a historic pool of more than $14 million in uncollected money from a class-action lawsuit.

They'll learn Friday their part of the windfall. But as a group they're divvying up the biggest award of its type in U.S. history, sponsors said.

"The Legal Aid Society of Cleveland is thrilled," said spokeswoman Melanie Shakarian, whose organization, which provides legal services for the poor, is one of the recipients.

The organizations are benefiting from a legal doctrine called "cy pres" that allows distribution of unclaimed awards in class-action settlements.

Cy pres -- a Norman French term that means "as near as possible" -- says that damage awards should follow as closely as possible the intent of the lawsuit settlement.

But more often -- to the shock of many -- unclaimed money goes straight back to the company that paid the damages in the first place.

"That's the big Oh!' we're focusing on," said attorney Patrick Perotti, who led the effort to arrange the Ohio cy pres awards.

Cy pres is not mandatory. Lots of class-action lawyers don't even know it's an option, Perotti said. And those who do may avoid getting involved because cy pres makes settlement negotiations more complicated, while not returning an extra penny in fees.

Perotti, of the Painesville law firm of Dworken and Bernstein, would like to change that mindset.

He was the lead counsel in a lawsuit against Grange Mutual Insurance Co., a $1 billion insurance firm based in Columbus. The company overcharged auto policyholders for uninsured-motorist coverage and paid $51 million to settle the case, Perotti said.

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