This story was updated at 5:22 p.m.
Thanks to an unusual feature of class action law, the Midwest Innocence Project and Legal Aid of Western Missouri have received nearly $659,000 apiece in leftover proceeds from a consumer fraud case.
The money represents the single largest donation in the roughly 15-year history of Midwest Innocence Project (MIP), a Kansas City-based nonprofit that works to exonerate wrongly convicted prisoners and whose total operating budget last year was $550,000.
The money was left unclaimed in a class action case against Dairy Farmers of America. The lawsuit was settled recently for $3.5 million. Under a doctrine known as cy pres, unclaimed or otherwise undistributed money in a class action can be put to its “next best” use, typically a charitable organization.
In this case, the unclaimed proceeds amounted to about $1.3 million. Lawyers for the plaintiffs decided to award it to Legal Aid, which provides free legal representation to low-income clients in civil cases, and MIP.
“We all agreed to designate it to them mostly because we believe in what they do and they’re good causes,” said John F. Edgar, one of the plaintiffs’ lawyers.
Charley German, a Kansas City lawyer who serves as MIP’s current president and board chair, said the organization only became aware it was the beneficiary of the windfall a couple of weeks ago.
He said the money will help MIP pursue some of the 600 or so cases it’s currently reviewing. Each case it pursues costs an average of $325,000 to litigate, usually over the course of seven to 10 years, according to MIP.
“We estimate that there are roughly 5,000 people held in prison in our five-state region who should not be there,” German said in an email. “ … It is the thoughtful financial support from our friends who believe in the justice of this work that keeps this organization going.”
Gregg Lombardi, executive director of Legal Aid, said the money would be used to handle hundreds of cases that the organization would otherwise have to turn away.
"There are about 900,000 people living in poverty in Missouri," he said. "And the four Missouri Legal Aid programs, for all practical purposes, are the only way that they're going to get access to the civil justice system."
Legal Aid of Western Missouri shares all cy pres awards it receives with the other Legal Aid offices in St. Louis, Columbia and Springfield.
The case that produced the unexpected piece of good fortune for MIP and Legal Aid was brought on behalf of Missouri dairy consumers. They alleged the Kansas City-based marketing cooperative sought to artificially boost milk prices through the slaughter of dairy cows.
DFA denied the allegations but agreed to settle the litigation by paying between $10 and $40 to consumers who bought their products between 2004 and 2015.
Because it was a so-called “claims made” settlement, consumers had to submit a form showing they were entitled to relief. After the money was distributed to eligible consumers, the leftover settlement money was given to Legal Aid and MIP.
Dan Margolies, editor of the Heartland Health Monitor team, is based at KCUR. You can reach him on Twitter @DanMargolies.
