Law school gets $5.1 million to fund new center

The Law School is opening a new center funded by the leftover winnings of a class action lawsuit which were donated to the University this summer.

A GW alumnus and attorney won a class action lawsuit against a chemical company in 2005 regarding the unfair pricing of materials sold in the United States. The case was settled for more than $40 million, a majority of which was then given to the plaintiffs. A remaining $5.1 million was given to the GW Law School to found a Center for Competition Law – the genre of law discussed in the suit.

Such settlement donations are called cy pres awards and are often given out following large settlements. Cy pres stipulates that once the plaintiffs and lawyers receive their share, whatever is left over should be made available for the “next best use.”

The plaintiff’s attorney, Michael Hausfeld, who graduated from the GW Law School in 1969, convinced the court to use the leftover money to fund a center to study how U.S. businesses can protect themselves against price-fixing.

“Since all the victims had been paid, all the expenses and fees related to the case had been paid – the issue became who would be the recipient of five million unclaimed dollars,” Hausfeld said.

Initially the defendants requested to have the money back, but the court denied their motion.

The center is slated to open before the end of the school year, said Fred Lawrence, dean of the Law School.

Such situations are increasingly common in modern law, according to a Nov. 26 article in The New York Times.

“(I)t is increasingly common . for courts to award (extra) funds to a nonprofit educational institution or charity who aggress to use those funds for a worth purpose that will indirectly benefit the plaintiffs in the class in the future,” said Robert Transgrud, associate dean for academic affairs at the Law School.

Transgrud said this is the second cy pres awarded to the Law School in recent years. The other was given to the Law School Clinical Program – which gives legal advice to members of the neighboring community.

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