In In re Baby Products Antitrust Litigation, ___ F.3d ___ (3d Cir. Feb. 19, 2013), the Third Circuit considered cy pres settlement distributions in class action cases for the first time. It held that cy pres distributions are permissible, but vacated the order approving the particular settlement before it and remanded for further proceedigs.
Although we agree with the ALI that cy pres distributions are most appropriate where further individual distributions are economically infeasible, we decline to hold that cy pres distributions are only appropriate in this context. Settlements are private contracts reflecting negotiated compromises. Sullivan, 667 F.3d at 312. The role of a district court is not to determine whether the settlement is the fairest possible resolution—a task particularly ill-advised given that the likelihood of success at trial (on which all settlements are based) can only be estimated imperfectly. The Court must determine whether the compromises reflected in the settlement—including those terms relating to the allocation of settlement funds—are fair, reasonable, and adequate when considered from the perspective of the class as a whole.
Slip op. at 18.