Directing cy pres awards to PAL and Community Catalyst

Class action settlements frequently find themselves with funds remaining after class members' claims have been paid. This is often due to the difficulty of locating and notifying class members, as well as to eligible class members not filing claims for payment.

Courts often approve "cy pres" awards of such residual funds to non-profit charitable organizations, as a way to provide an indirect benefit to absent class members. Such cy pres awards usually go to fund organizations and projects that provide services or advocacy on behalf of members of the class.

Prescription Access Litigation and our parent organization, Community Catalyst, are ideal recipients of cy pres funds in a wide variety of class actions, such as those concerning:

• Pharmaceuticals
• Medical devices
• Over-the-Counter medical products
• Herbal and Nutritional supplements and vitamins
• Health insurance marketing and claims practices
• Hospital billing and collections practices
• Physician and hospital medical practices
• Medical research and clinical trials
• Consumer fraud & deception in the health care market

Why PAL and Community Catalyst

Our organizations have extensive expertise in a wide variety of health care, public benefit and medical issues. Our staff has decades of experience in health care and consumer advocacy, technical assistance to non-profit organizations, public education, policy analysis, program management, and grant making and administration. We have a proven track record of success in creating and implementing innovative programs with high impact on consumers and health care systems, an extensive national network of contacts and affiliated organizations, and an efficient organizational structure with low overhead.

We have received a number of cy pres awards in class action cases:

• Generics are Powerful Medicine: In two settlements of Federal court antitrust class actions against a drug manufacturer, Community Catalyst and colleagues at Brigham and Women's Hospital were awarded $613,000 to create "Generics are Powerful Medicine," a program to educate consumers about the safety, value and effectiveness of generic prescription drugs. The program is working to increase consumers' use of generic drugs and to dispel myths about generics, using high-quality, clinically-reviewed consumer education materials about prescription drugs. The program will award small grants to consumer advocacy and other nonprofit organizations to launch consumer education campaigns on generic drugs, using the program's materials.

• Health Care Access Circuit Rider Project: In the settlement of a series of California and Florida state court actions against the manufacturer of a dietary supplement, the Courts approved a cy pres award of $125,000 for Community Catalyst's "Health Care Access Circuit Rider Project." This project is working to improve women's access to health care by supporting the outreach efforts of four state-based consumer health advocacy organizations to inform uninsured and underinsured women and their families about various public and private health coverage and services programs for which they may be eligible.

• Hospital Accountability Project: In 2007, the Superior Court of the State of California awarded Community Catalyst a cy pres award of $3.6 million from the Tenet Healthcare Cases II to support a 15-state project to improve health care - and mitigate the impact of medical debt -- for the most vulnerable segments of the underinsured population. A component of the project is developing state level model policies aimed at improving programs for the underinsured. Community Catalyst developed and implemented a Request for Proposal process in each of the 15 states, and is currently finalizing decisions on awards to collaboratives that involve legal, community and consumer advocacy partners.

Community Catalyst and PAL programs produce long-lasting results

Directing cy pres awards to PAL and Community Catalyst provides significant benefits to the absent class members. Cy pres awards are often directed to programs providing direct services. While such services often provide vital help to individuals, they do not result in ongoing benefits or changes, and their benefit is one-time. In contrast, by focusing on advocacy, education, and creating self-sustaining programs and organizations, Community Catalyst and PAL are able to produce benefits to class members that multiply and continue indefinitely. Our programs are focused on calling attention to and addressing root causes, rather than on treating symptoms at just one point in time.

Community Catalyst has extensive experience administering grants

Community Catalyst has been selected by private foundations and Courts to distribute a variety of grants and other support to nonprofit organizations around the country. For example:

• Consumer Voices for Coverage: The Robert Wood Johnson Foundation selected Community Catalyst to provide technical assistance to organizations that receive grants from the Foundation as part of its national initiative to enhance and strengthen capacity in statewide health care reform advocacy networks in selected states. The Foundation will distribute three-year grants of up to $750,000 in each of 10 states.
• Hospital Accountability Project: This project, described above, will award $2.3 million in grants to organizations in 15 states.
• Generics are Powerful Medicine: This project, described above, will award $240,000 to non profit organizations around the country to undertake public education campaigns.
• Community Health Assets Project: This project distributed $160,000 to organizations and coalitions that fought to protect community assets during the conversion of non-profit hospitals and health plans to for-profit status. Community Catalyst and PAL work on a wide variety of issues and projects that are excellent candidates for cy pres awards, including protection and expansion of public health care coverage (Medicaid, SCHIP, and state programs), hospital billing practices and community benefits, children's health, insurance reform, Medicare Special Needs Plans (SNPs), Nonprofit to For-Profit conversions of health plans and hospitals, community organizing and organizational development, consumer education about health care, and diversity of the physician work force. Our work on prescription drug issues includes challenging illegal pharmaceutical industry pricing and marketing tactics through litigation and public education, promoting model policies on pharmaceutical marketing through state legislatures and academic medical centers, promoting evidence-based prescribing, and targeting conflicts of interests that affect prescribing.

If you are interested in proposing PAL or Community Catalyst as a cy pres recipient, or have questions about our work or cy pres generally, please contact Wells Wilkinson at (617) 275-2822 or wwilkinson@communitycatalyst.org