$60 million from unclaimed lawsuit funds could go to Ohio charities

When Gov. Ted Strickland signed the budget last July, the Children’s Hunger Alliance lost the $3.8 million from the state that it had been using to help make sure youngsters across Ohio get the nutritious food they need to stay healthy.

That made the $450,000 the group received earlier from unclaimed funds in a class action lawsuit settlement a timely godsend.

“I would say it was unexpected and very beneficial,” said Stephen Lilly, the hunger alliance’s vice president of marketing and media.

With state support withering and private contributors tightening their pocketbooks, Sens. Tim Grendell, R-Chesterland, and Bill Seitz, R-Cincinnati, have proposed legislation that backers say would provide more than $60 million annually to charities and nonprofits at no cost to taxpayers.

It would make the legal doctrine of “cy pres” the official policy of Ohio. Pronounced “sigh pray,” it means as nearly as possible. In Ohio, it would require that all leftover funds from class action lawsuit settlements be distributed to charities, unless a court order provided otherwise.

The $60 million represents what now goes undistributed in such settlements because not all those affected by the settlements can be found, said Cleveland-area lawyer Patrick Perotti, a class action lawyer and a key backer of the proposal.

Class action lawsuits are filed on behalf of a group of people who claim they have been injured by a product or policy.

Under current law, a judge presiding over a class action lawsuit may distribute any money remaining in a settlement fund as happened when the Children’s Hunger Alliance got the $450,000.

Unless the judge takes such action, however, the remaining money goes back to the company being sued.