Nachshin v. Aol, LLC, 663 F.3d 1034

Plaintiffs filed a nationwide class action against AOL alleging e-mail footer ads violated multiple statutes and common-law duties.
Settlement created a settlement class of ~66 million AOL subscribers with prospective relief and cy pres charitable donations instead of direct monetary distribution.
Cy pres awards totaled $110,000 distributed to three charities; named plaintiffs received $8,750 each designated to charities of their choice.
District court preliminarily approved the settlement and certified the settlement class; notices were sent to class members.
McKinney and Buycks objected to the cy pres scheme and notice; opt-outs and objections were resolved by the district court, which approved the Final Judgment.
On appeal, the Ninth Circuit assessed whether the cy pres distribution met Six Mexican Workers standards and whether recusal issues affected the judgment.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does cy pres respect Six Mexican Workers standards?	McKinney argues charities are unrelated and geographically narrow.	AOL says cy pres is permissible with broad relief and deference to settlement.	Cy pres failed Six Mexican Workers standards; reversed in part.
Does geographic distribution of cy pres undermine class interests?	Donations largely favor Los Angeles-area charities, not the nationwide class.	Geographic diversity of the class supports using local charities; nationwide relief not required.	District court abused discretion by not aligning with class geography; remanded.
Should the district court have recused the judge based on related interests?	Judge's spouse served on LAFLA board, creating potential bias.	No disqualifying financial interest; no reasonable risk of bias.	Recusal not warranted; no abuse of discretion.
Was notice to the class sufficient to inform about cy pres and settlement terms?	Notice failed to reveal certain connections and details about charities.	Notice substantially satisfied due process and class notification requirements.	Not necessary to decide; the cy pres standard was already misapplied.

Six Mexican Workers v. Ariz. Citrus Growers, 904 F.2d 1301 (9th Cir. 1990) (cy pres must align with underlying statutes and silent-class interests)
In re Airline Ticket Comm'n Antitrust Litig., 307 F.3d 679 (8th Cir. 2002) (cy pres critique of broad, unrelated distribution)
Masters v. Wilhelmina Model Agency, Inc., 473 F.3d 423 (2d Cir. 2007) (cy pres as next best use of unclaimed funds)
Bear Stearns & Co., Inc., 626 F. Supp. 2d 402 (S.D.N.Y. 2009) (concerns about politicized or improper cy pres distributions)
Houck on Behalf of U.S. v. Folding Carton Admin. Comm., 881 F.2d 494 (7th Cir. 1989) (geographic breadth in cy pres analysis)
Rodriguez v. West Publishing Corp., 563 F.3d 948 (9th Cir. 2009) (limits of judicial review in class settlements)