Abstract
This report was commissioned by class counsel in the class action lawsuit Merle Norflet v. John Hancock Life Insurance Co. with approval from the U.S. District Court for the District of Connecticut, which oversaw the litigation. Its goal is to provide a written memorialization of what was achieved by grants that had been made available from the lawsuit settlement’s cy pres relief and awarded by the Norflet Progress Fund, and the positive impact that the grants have made in communities and for organizations. The report also seeks to outline lessons drawn from the settlement’s cy pres component.
Judge Arterton carefully examined this cy pres proposal and called on class counsel to establish an outside committee to serve in the crucial role to solicit and obtain applications for groups who would put the funds to the best use, subject to court approval. This Cy Pres Advisory Committee, which operated as the Norflet Progress Fund, functioned effectively as a grant-making foundation. Between 2009 and 2015, the fund, with the Court’s approval, would allocate $15,597,331 to 54 nonprofit organizations that served African Americans. This report highlights the positive impact that the grants have made in communities and for organizations, both large and small. It also explores the genesis, grant-making procedures, outcomes, and relevant lessons of the Norflet Progress Fund for cy pres practice.
Recent discourse around cy pres has at times focused on problematic disbursements. For example, in some cases, residual funds were even returned to defendants, meaning the defendant retained the money that it had agreed should go to the class in some form. Disbursements of cy pres has sometimes reflected carelessness, with disburse- ments not even tangentially related to the alleged injustice at the heart of the original litigation, or being provided to pet charities of the plaintiffs’ or defendants’ choosing. The Norflet Progress Fund, though, is a compelling counterexample to such outcomes, and demonstrates how cy pres can benefit the communities at the heart of the allegedly harmful conduct underlying a settled lawsuit or, alternatively, address the wrongs alleged in a lawsuit.
In this instance, by the time of the settlement, the conduct by John Hancock that the lawsuit alleged was racially discriminatory was not ongoing, having ceased 50 or more years prior to the cutoff date of the class definition. Given the passage of so many years, providing true redress to the allegedly harmed individuals would prove exceedingly challenging and, in many cases, nearly impossible. Thus, millions of dollars in disbursements were paid not directly to class members, but to a wide variety of organizations that benefited African American communities. As discussed in detail below, the amelioration of the specific alleged wrong in this case demonstrates the powerful role that cy pres can ultimately play in realizing justice. The approach taken by the lawyers and the court-approved Advisory Committee can inform future settlements of class cases and best practices for the future.
To complete this report, the author conducted interviews with members of the Advisory Committee, conversed with class counsel, and interviewed representatives from eleven of the Norflet Progress Fund’s nonprofit grantees. She also reviewed court documents, as well as all the interim reports submitted by Norflet Progress Fund grantees. Part 1 of this report discusses the mechanics whereby the fund was established and how it operated. Part 2 details the wide range of programs that were chosen as recipients of the fund’s grants, all of which were, after input from John Hancock, proposed to and approved by US District Court Judge Arterton of Connecticut. Part 3 sets forth some conclusions and offers lessons relevant for legal professionals engaged in cy pres practice and for scholars and other commentators concerned with the nature and future of cy pres. Appendices include a timeline of events related to Norflet Progress Fund activity, biographical sketches of Advisory Committee members, and a full list of the Norflet Progress Fund’s grantees.