Scott Pullins of The Pullins Report recently had a unlikely guest poster write in support of state Senate bill SB 157, which would codify into Ohio law an ancient Norman (read: English) legal concept, the cy-près doctrine: Plunderbund’s Tim Russo.

Essentially, cy-près doctrine states that, as applied to class-action lawsuits, when the court rules in favor of the defendant class and the amount of money per class member is small, the money should go to a charity organization that works in the public interest against whatever it is that the class-action lawsuit is.

Now, this all sounds very nice, and there does seem to be some bipartisan support, but there are problems with cy-près doctrine that overshadow the feel-goodiness that the bill gives off.

Cy-près doctrine isn’t a bad thing in and of itself, but when applied to class-action lawsuits, it is. Who gets to decide what charities get the money? Just what we need, more squabbling in the Capitol building.  Awesome idea.

Also, there’s a good chance that, if passed, SB 157 would be a tool for activist groups to use the court system as a financial sink against businesses they don’t like—got a grudge against Massey Energy Corporation or AEP?  Get your posse to roll up on the courthouse, tell some sob story to Johnny Law, and have the judge write a fat check to Green-haired Hippies Against The Economy.  Easy as that.

As with most pieces of legislation, Capitol-critters can’t just leave well enough alone.  The road to governmental and legislative hell is paved with bills such as SB 157.

It seems like an inoffensive and good idea, when you think about it, it’s just another tool for activists to use to bully businesses into doing what is in the activists’ interests, and not doing what is necessarily in the interests of the businesses and their shareholders.  It also represents an expansion of governmental powers beyond those laid out in the constitution (both the nation’s and Ohio’s).

UPDATE: An astute reader sends in this Youtube video, in which Northwestern University’s Searle Center on Law, Regulation, and Economic Growth professor Martin Redish speaks about why cy-près doctrine should be killed with fire.