Cleveland, OHYou might think of attorney Patrick Perotti as the Ohio legal profession's very own Robin Hood with a few modifications. Over the last several years Perotti and a band of fellow lawyers has distributed millions of dollars to charities, but there's no sheriff breathing down their necks and they didn't steal the money. They won it fair and square in class action lawsuits. "Sure, I have other things to do," says a relaxed Perotti one morning at his Cleveland office where he is a partner with Dworken & Bernstein, "but that's the way my Irish Catholic mother brought me up. She said you do the right thing."
Unclaimed Settlement Money
The money comes from the millions and millions of dollars that often goes unclaimed at the conclusion of class action suits in the United States. Class actions can take years to settle and plaintiffs are often difficult to locate—some people just don't open their mail—others may have died.
When the payment from the defendant cannot be distributed, surprisingly perhaps, it is sent back to the defendant.
During the 1980s, Perotti settled a $51 million suit against an insurance company. "We couldn't locate many of the plaintiffs. We had $14 million in unclaimed funds, and I thought, what are we going to do with all this money?" says Perotti.
Cy Pres, Roman Aqueducts and Good Works
Perotti decided to engage a little used but very admirable legal principle. "It is called the Cy Pres doctrine—an ancient legal term that translates to "as nearly as possible", says Perotti.
In 3rd century Rome, wealthy citizens willed money to the city to fund the city's famous aqueducts. "When the infrastructure project was done, civic leaders found they still had piles of bequeathed money. They decided to spend the money on projects that were as close to the original intention as possible—now commonly referred to as the doctrine of Cy Pres," explains Perotti.
Class Actions are for Community Good
Perotti persuaded the judge and the insurance company to allow the leftover $14 million to be distributed to charity. Dworken & Bernstein is now one of the few firms that regularly use the Cy Pres doctrine to deal with unclaimed cash. "We could just accept the fact 80 percent of the class distribution is going to go back to the company," explains Perotti. "I could just wash my hands of it and say technically that is right, but I don't practice that way. Lawyers can be incredibly helpful and do things for the whole community and this is a perfect example. Class actions are there to do justice to the community," adds Perotti.
Dworken & Bernstein
In fact, the firm of Dworken & Bernstein will not settle any class action case unless the defendant in the case agrees to allow unclaimed settlement money to be given to charity. The firm has established Ohio Lawyers Give Back—an organization that encourages lawyers everywhere to use the Cy Pres doctrine to deal with unclaimed funds. "There are billions, that's billions," he stresses, "that goes unclaimed in the United States. In securities class actions alone there is over 12 billion dollars in unclaimed settlement money. Far less than 5 percent of class actions ever used this doctrine–the money simply goes back to the company."
Charities are often stunned by generous donations from Dworken & Bernstein—to date an estimated $18 million has been transferred to at least 34 organizations. "We've given money to Leukemia, Mothers Against Drunk Driving, Workplace Fairness, Legal Aid, Homeless Shelters, Muscular Dystrophy, Cystic Fibrosis," Perotti says. And the list goes on and on.
"I have seen that money in action," Perotti says. "It goes to something immediate and positive on the front line, where the rubber hits the road."
"We are doing what we took the bar to do. We took an oath to help others. That's what the law profession should be about, not about making money or winning cases but about doing justice and this does justice," says attorney Perotti.
Patrick Perotti graduated from Cleveland State University with a B.A. in 1977. He was awarded his law degree, cum laude, from Cleveland Marshall College of Law in 1982. He specializes in commercial litigation, civil rights and employment discrimination litigation, consumer benefit and class action practice. He has frequently appeared before the Supreme Court of Ohio, and as counsel in litigation in state and federal courts throughout the country.