doctrine, will in its discretion distribute any amounts remaining in any of the funds established by that agreement either for distribution to class members or to cover any costs or expenses incurred in the administration of the case.
It appearing that a substantial balance would be available after all such distributions and payments had been made, the court invited applications for cy pres grants and for suggestions as to how such cy pres distributions should be made while expressly indicating that no applicants or persons making suggestions would become parties to the case by virtue of their applications or suggestions. Notice was given in various ways including published notice in the Wall Street Journal. A copy of that notice, which included the court's order, is attached hereto as Appendix A.
As a result of the foregoing, the court received fifteen (15) applications for grants and a number of letters supporting various grant applications or making suggestions as to the distribution of the funds. Thereafter, on April 14, 1993, commencing at 10:00 a.m. and continuing through the day, the court held hearings at which representatives of each of the applicants and any others who desired to do so were given an opportunity to be heard.
At those hearings, the court asked questions as to the application of cy pres principles to the various grant applications, the objectives each applicant sought to achieve with a grant, the basis for determining the amount sought, the necessity of various anticipated expenditures, and other relevant matters. Thereafter, most of the applicants filed supplemental statements and other material in support of their applications and in response to the court's questions.
A threshold question is necessarily the scope of and the limits imposed by the cy pres doctrine. Historically, the cy pres concept was fairly limited and restricted to the closest comparable alternative to the original purpose for which the funds in question had been designated. The trust would fail unless the dominant purpose could be carried out, but incidental requirements that became impossible or impracticable could be avoided through the application of cy pres. See, e.g., Noel v. Olds, 78 U.S. App. D.C. 155, 138 F.2d 581 (D.C. Cir. 1943) (allowing art gallery to be built at a different university when the named university declined the gift); Shoemaker v. American Security & Trust, 82 U.S. App. D.C. 270, 163 F.2d 585 (D.C. Cir. 1947) (allowing home for the aged to be built on a different lot than that named in will); Fay v. Hunster, 86 U.S. App. D.C. 224, 181 F.2d 289 (D.C. Cir. 1950) (allowing funds to be given to an existing home for the aged where the money was insufficient to build and maintain an entirely new institution). However, where the testator's dominant intent was that a separate building be built, using the funds to construct an addition to an existing building would not be allowable under cy pres, at least not where construction of a separate building was not actually impossible. Connecticut College v. United States, 107 U.S. App. D.C. 245, 276 F.2d 491 (D.C. Cir. 1960).
In recent years, the doctrine appears to have become more flexible. Funds remaining in antitrust cases have been awarded to law schools to support programs having little or no relationship to antitrust law, competition, or the operation of our economy. In In re Corrugated Container Antitrust Litigation, MDL #310, 53 Antitrust & Trade Regulation Reports 711 (S.D.Tex. Oct. 6, 1987) over $ 1 million was divided among six law schools, the National Association of Attorneys General and two packaging industry foundations. The Attorneys General were to use the funds for state level, antitrust enforcement and education, but the law schools were not so restricted. The law schools were to use the funds to teach advocacy skills, principles, and ethics. Some law schools would use the funds to support teaching of antitrust and business law, but others were going to use the funds primarily for advocacy training. See also Lindy Bros. Builders v. American Radiator & Standard Sanitary Corp., CA No. 41774 SC (E.D.Pa. Feb. 28, 1978) (approximately $ 25,000 to two law schools to establish loan funds for needy students at those institutions).
In this court and circuit, distribution has been made and approved of more than 2.3 million dollars of remaining antitrust funds to the National Association for Public Interest Law (NAPIL) which has also applied for some or all of the funds here involved. In re Folding Carton Litigation, 934 F.2d 323 (7th Cir. 1991). NAPIL conducts an Equal Justice Fellowship program which selects fellows from recent law school graduates for assignment to public interest organizations and pays part or all of their salaries for two years plus giving loan payment assistance to fellows having student loan obligations. At least one of the grant applicants here has had a NAPIL fellow assigned to it.
The remaining funds, over $ 800,000, from In re Ocean Shipping Antitrust Litigation, MDL No. 395, (S.D.N.Y. July 29, 1991), were later added to the NAPIL fellowship program described above. Other cy pres awards include State of Illinois v. J.W. Petersen Coal & Oil Co., No. 71 C 2548 (N.D.Ill. March 15, 1976) (distribution of one-half of the unclaimed residue to the Chicago Bar Foundation and one-half to the Chicago Lawyers Committee for Civil Rights). In West Virginia v. Chas. Pfizer & Co., 314 F. Supp. 710 (S.D.N.Y. 1970), aff'd 440 F.2d 1079 (2d Cir.), cert. den. 404 U.S. 871, 30 L. Ed. 2d 115, 92 S. Ct. 81 (1971), 66 antitrust class actions against makers of anti-biotics were settled. The portion of the settlement fund allotted to individual consumers was mostly unclaimed. The remaining funds were divided among the states to be used for public health programs that would benefit the unfound class members and the general public, although the term "cy pres" was not used. Similarly, in United States v. Exxon Corp., 561 F. Supp. 816 (D.D.C. 1983), aff'd 773 F.2d 1240 (Temp. Emer. Ct. App. 1985), the Department of Energy sued for violation of oil price regulations. The court found that it would be impossible to trace the overcharges paid by individual consumers, although they were found to be harmed by the defendant's actions. Therefore, the court ordered that the money be given to an escrow account in the U.S. Treasury, and then divided among the states to be used in one of five federal energy conservation programs. The decision was easier in this case because Congress had passed a law setting up such an escrow account to receive funds from settlement of petroleum violation cases, but the court did state:
In formulating its order, the court in no way relies on section 155 as an express statutory grant of authority to the court, but acts instead in the exercise of its broad equitable powers to order restitution.