A couple of years ago, Judge Harold Baer Jr. found himself with $6 million of unclaimed money from the settlement of an antitrust class-action lawsuit. The case had involved fashion models, so he decided to give the extra money to charities likely to assist them.
After interviewing a parade of applicants over two days, Judge Baer, a federal judge in New York, gave $1 million to an eating disorder program, $500,000 to a substance abuse program, and so on.
Judges all over the country have gotten into the business of doling out leftover class-action settlement money, sometimes to organizations only tangentially related to the subject of the lawsuit. Hospitals are popular, as are law schools and legal aid societies.
The practice is getting out of hand, said Samuel Issacharoff, a law professor at New York University.
“It gives rise to this unbelievable world that I was shocked to learn about, and I’m not easily shocked in litigation,” Professor Issacharoff said. “Charities hire lawyers to go lobby the judge for the extra money.”
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