By Legal Services of North Dakota
KEEPING CLASS ACTION DOLLARS IN NORTH DAKOTA
Most lawyers are familiar with class actions, settlement funds, and the mechanics of distributing payments to class members. Far fewer are familiar with what happens to the portion of those funds that cannot realistically be distributed. That is where cy pres awards come in and why they matter for access to justice in North Dakota.
In 2023, a Cass County District Court approved a class action settlement in Metler v. First International Bank & Trust, a case involving alleged improper overdraft and non-sufficient funds fees assessed by the bank between 2016 and 2022. The total settlement fund was $ 1.1 million. After payments to class members, administrative costs, and attorney fees, the court approved a cy pres distribution of $ 21,163.33 to Legal Services of North Dakota( LSND).
That single line in a settlement order has translated into real legal help for North Dakotans who otherwise would not have access to a lawyer.
Cy pres comes from the French phrase“ cy près comme possible” meaning as near as possible. In class action settlements, it refers to the practice of distributing residual or unclaimed funds to nonprofit organizations whose work closely aligns with the interests of the class members and the underlying claims.
In many cases, not all settlement dollars can be distributed. Some class members cannot be located, some checks go uncashed, and some amounts are too small to justify additional rounds of mailing. Courts are then faced with deciding whether those remaining funds should revert to the defendant, be redistributed among class members, or be directed to a third party that advances the purposes of the litigation. Cy pres is the mechanism courts use to ensure these funds continue to serve the people who were harmed, even when direct payment is no longer practical.
The Metler case involved consumers who were charged overdraft and non-sufficient funds fees. These types of fees tend to fall hardest on people living paycheck to paycheck, seniors on fixed incomes, and families already under financial stress. Those are the same populations LSND serves every day through legal assistance with housing stability, debt defense, public benefits, and consumer protection.
A cy pres award to LSND therefore keeps settlement dollars working as near as possible to the original harm. Funds that originated from improper or disputed banking fees are redirected to legal services that help people avoid financial collapse, eviction, and long-term instability.
The $ 21,163.33 LSND received from the Metler settlement did not sit in a separate account. It went directly into supporting the infrastructure that allows LSND to provide statewide civil legal aid. Those funds helped support intake and advice clinics, staff attorney time devoted to consumer and housing cases, and the technology that connects rural and underserved North Dakotans to legal help. In practical terms, cy pres dollars help keep phones answered, cases screened, and attorneys available when people are facing crises that can quickly spiral if they do not have legal guidance.
This outcome would not have been possible without the lawyers who brought and stewarded the case. The court appointed Lynn Toops of Cohen & Malad, LLP and J. Gerard Stranch IV of Branstetter, Stranch & Jennings, PLLC to serve as class counsel. They also associated North Dakota counsel John Mahoney, whose long legal career recently ended with his retirement after decades of representing North Dakotans. Mahoney’ s involvement ensured the case had both national class action expertise and deep local grounding. Vess Miller of Cohen & Malad also appeared in the North Dakota court record on behalf of the class, reflecting the broader team that worked behind the scenes to bring the matter to resolution. Their collective decision to designate LSND as the cy pres beneficiary ensured the remaining settlement dollars stayed in North Dakota and continued to serve the people most affected by the conduct at issue.
For lawyers handling class actions, consumer cases, and other matters that may produce unclaimed settlement funds, cy pres designations are one of the most direct ways to shape where justice dollars ultimately land. Selecting a local legal aid organization keeps the funds connected to the communities affected by the litigation and supports the courts’ broader goal of fairness and access.
LSND is grateful to the class counsel in Metler v. First International Bank & Trust for recognizing the importance of keeping these funds working locally. Their designation has already helped more North Dakotans receive legal help at moments when it mattered most.
If you are involved in litigation that may result in residual settlement funds, LSND is always available to discuss how a cy pres designation can advance access to justice in our state.
30 THE GAVEL