Mary Patricia Zaber, as Successor in Interest to J. Thomas Zaber, on Behalf of Herself and All Others Similarly Situated v. City of Dubuque, Iowa

IN THE COURT OF APPEALS OF IOWA

No. 16-1513
Filed July 6, 2017

MARY PATRICIA ZABER, as successor in interest to J. Thomas Zaber, on
behalf of herself and all others similarly situated,
Plaintiff-Appellee,

vs.

CITY OF DUBUQUE, IOWA,
Defendant-Appellant.
________________________________________________________________

Appeal from the Iowa District Court for Dubuque County, David P.

Odekirk, Judge.

The City of Dubuque appeals from the district court’s ruling ordering the

remaining funds from a class action settlement agreement be distributed equally

among four cy pres recipients. AFFIRMED.

Ivan T. Webber and James R. Wainwright of Ahlers & Cooney, P.C., Des

Moines, for appellant.

Richard A. Davidson of Lane & Waterman L.L.P., Davenport, for appellee.

Heard by Vaitheswaran, P.J., and Tabor and Mullins, JJ.
2

MULLINS, Judge.

The City of Dubuque appeals from the district court’s ruling ordering the

remaining funds held in an escrow account from a class action settlement

agreement be distributed equally among four charitable organizations serving

Dubuque residents as cy pres recipients. The City argues the district court

should have ordered the funds be returned to the City because doing so would

serve the best interests of the class, cy pres is not appropriate in this case, the

Iowa Rules of Civil Procedure provide the funds should be returned to the City,

and, alternatively, even if cy pres were appropriate here, the City is the best cy

pres recipient. Upon our review, we affirm.

I. Background Facts and Proceedings

In 1993, the residents of Dubuque voted to allow their city council to

authorize franchise fees for gas and electric utility services. In 2003 and 2004,

the Dubuque City Council adopted ordinances requiring utility companies

servicing the City to pay to the City a fee of two percent of the gross revenue

from the sale of gas and electricity to customers within Dubuque. The utility

companies then passed the two-percent fee onto their customers in their bills.

Subsequently, the ordinances were amended to provide for a franchise fee of

three percent for gas and electric utilities.

On September 5, 2006, J. Thomas Zaber1 filed a class action suit against

the City of Dubuque, alleging the City had collected an illegal tax from its

residents who had paid franchise fees for gas and electric utilities and cable

1
J. Thomas Zaber is now deceased. His wife, Mary Zaber, has been substituted as the
class representative.
3

television services in excess of the reasonable cost of regulating these services.

See Zaber v. City of Dubuque, 789 N.W.2d 634, 636–37 (Iowa 2010). Zaber

relied on the Iowa Supreme Court’s decision in Kragnes v. City of Des Moines

(Kragnes I), 714 N.W.2d 632, 642–43 (Iowa 2006), which held franchise fees

imposed by the City of Des Moines for gas and electric utility services constituted

an illegal tax when the fees exceeded “the reasonable costs of inspecting,

licensing, supervising, or otherwise regulating the activity that is being

franchised.”

The district court granted the City’s partial summary judgment motion

requesting dismissal of Zaber’s claim for a refund of cable television fees. Zaber,

789 N.W.2d at 637. The supreme court affirmed the district court’s decision with

regard to the cable television fees on interlocutory appeal and remanded for

further proceedings with regard to the claim for a refund of gas and electric utility

fees. Id. at 656.

On July 23, 2014, the parties entered into a settlement agreement in order

to avoid the uncertainty and cost of continued litigation. The agreement covered

utility customers in Dubuque who paid utilities franchise fees to the City between

September 5, 2001 and May 25, 2009. The agreement provided Dubuque would

pay $2,600,000 into an escrow fund to be divided among class members who

paid franchise fees during the relevant period.

The agreement left two issues to be determined by the court: (1) whether

class members should be required to submit a claim form in order to receive a

refund; and (2) whether cy pres recipients, the City, or the state, should receive
4

the remaining funds, if any, after all claims had been paid.2 After a hearing on

the first issue in August 2014, the court ordered that each class member seeking

a refund must submit a claim form in order to receive a payment instead of

receiving a refund automatically.

On August 28, 2015, the court entered a final order and judgment

approving the class action settlement, concluding the terms of the settlement

agreement were “fair, reasonable and adequate and in the best interest of” both

the class and the City.

On May 12, 2016, the court entered a final distribution order approving a

distribution schedule and directing the settlement administrator to make

payments of claims to the class members. The court reserved jurisdiction to

determine the final distribution of any funds remaining in the escrow account.

After all claims for refunds had been submitted and payments made, a

total of $601,985.46 remained unclaimed in the escrow account.3 On May 31,

2016, the class filed a motion to distribute the remaining funds to four charitable

organizations serving Dubuque residents as cy pres recipients, including

Operation: New View Community Action Agency, the Iowa Legal Aid Northeast

2
The settlement agreement provides:
To the extent that the Settlement Administrator, after exercising
reasonable diligence to locate each Class Member, is unable to distribute
payment to each Class Member for any reason . . . then, in that event,
after the payment of all claims, any remaining funds in the Escrow
Account shall be awarded, as cy pres to the Cy Pres Recipients, to the
City or to the State of Iowa, as determined by the Court following
application by one or both of the parties, notice of hearing, and hearing.
The agreement further defines “Cy Pres Recipient” as “such charitable institutions as
hereafter may be determined by the Court to be appropriate recipients.”
3
The record shows there might be an estimated additional $64,500 remaining in the
escrow account if not all of the claiming class members cashed their refund checks
within 120 days of their issuance.
5

Iowa Regional Office, the Community Foundation of Greater Dubuque, and

United Way of Dubuque Area Tri-States.4 The City resisted the class’s motion

and requested that the remaining funds be returned to it because the city council

had already directed that any money returned from the settlement escrow

account be used to reduce the judgment bond the City had issued to fund the

settlement account.

The court held an evidentiary hearing on the class’s motion and

subsequently ordered the remaining funds be equally divided among the four cy

pres recipients named in the class’s written motion. In its order, the court found

“the express language of the settlement agreement does supplant the language

which would other[wise] apply under Iowa Rule of Civil Procedure 1.274(3).” The

court also found “the group of persons who paid illegal franchise fees are not one

and the same with the persons who pay property taxes. Therefore, a return of

the remaining funds to the City would not reasonably approximate the interests

that were pursued by the class, despite some overlap.” The court next

determined Dubuque was not an appropriate cy pres recipient because “the City

will merely be using the remaining funds to reduce a debt obligation which

benefits property tax payers generally without advancing the interests specific to

the class.” Additionally, the court found the class’s alternative suggestion that

the court distribute the remaining funds to the City upon the condition that the

City use the funds to reduce future electric and gas utility franchise fees in an

equivalent amount was inappropriate because it “would be unnecessarily

4
At the hearing on the motion in July, however, Zaber testified she personally preferred
the remaining funds be distributed to other various charitable organizations serving the
residents of Dubuque but still including Operation: New View Community Action Agency.
6

burdensome to the City and confusing to the persons subject to the fees.” The

court concluded the cy pres recipients proposed in the class’s written motion

were “most consistent and best represent[] the interest pursued by the class.”

The City appeals.

II. Scope and Standard of Review

The parties dispute the standard of review to be applied here. The City

contends we should review the district court’s decision de novo. See Kragnes v.

City of Des Moines (Kragnes II), 810 N.W.2d 492, 498 (Iowa 2012). The class

asserts the standard of review is for an abuse of discretion. See City of Dubuque

v. Iowa Trust, 587 N.W.2d 216, 220 (Iowa 1998).

Under federal law, appellate courts that have addressed this issue review

a district court’s decision to distribute unclaimed funds to cy pres recipients for an

abuse of discretion. See, e.g., In re BankAmerica Corp. Sec. Litig., 775 F.3d

1060, 1071 (8th Cir. 2015) (citing Powell v. Ga.-Pac. Corp., 119 F.3d 703, 706

(8th Cir. 1997)); Nachshin v. AOL, LLC, 663 F.3d 1034, 1038 (9th Cir. 2011);

Klier v. Elf Atochem N. Am., Inc., 658 F.3d 468, 474 (5th Cir. 2011). We find a

similar abuse-of-discretion standard applies here. See Iowa Trust, 587 N.W.2d

at 220. “An abuse of discretion occurs when ‘the court exercise[s] [its] discretion

on grounds or for reasons clearly untenable or to an extent clearly

unreasonable.’” Graber v. City of Ankeny, 616 N.W.2d 633, 638 (Iowa 2000)

(alterations in original) (citation omitted). “A ground or reason is untenable when

it is not supported by substantial evidence or when it is based on an erroneous

application of the law.” Id.
7

“[W]e review the interpretation of our rules of civil procedure for correction

of errors at law.” Jack v. P & A Farms, Ltd., 822 N.W.2d 511, 515 (Iowa 2012).

III. Analysis

The City claims the district court should have ordered the remaining funds

in the settlement escrow account be returned to it because doing so is in the best

interests of the class.5 The City complains failure to return the funds to it only

harms the members of the class because the class members will ultimately be

responsible for paying off the debt the City has incurred in order to fund the

settlement in this action; thus, reduction of the City’s debt through the return of

the remaining funds is in the best interests of the class.6 Additionally, the City

contends cy pres distributions in class action settlements are not appropriate

because such an award is not supported by Iowa case law and has been

questioned by several federal courts. It further complains the charitable

organizations selected are not appropriate cy pres recipients because they focus

their aid on helping low-income residents of Dubuque and there is no evidence

that low-income residents are members of the class or that low-income residents

are representative of the population of Dubuque or the business and commercial

5
In Iowa Trust, the Iowa Supreme Court followed federal court precedent and held that,
in deciding whether to approve a settlement agreement, the district court shall
“independently and objectively analyze the evidence and circumstances before it . . . to
determine whether the settlement is in the best interest of those whose claims will be
extinguished.” 587 N.W.2d at 222 (quoting In re Gen. Motors Corp. Pick-Up Truck Fuel
Tank, 55 F.3d 768, 785 (3d Cir. 1995)). That is, “the court must determine whether the
settlement is fair, reasonable and adequate.” Id. Here, the district court entered a final
order approving the class action settlement in August 2015, finding the terms of the
settlement were “fair, reasonable and adequate and in the best interest of” both parties.
Neither party appealed this ruling. The City cannot now argue the district court abused
its discretion in approving the parties’ settlement agreement.
6
The City alleges the total cost of the settlement to the City is $3,754,990.78, which
includes $263,679.68 in escrow and administration fees and $1,563,795.33 in interest on
the twenty-year bond the City issued to fund the settlement escrow account.
8

entities who paid the illegal franchise fees. Alternatively, the City argues it is the

best cy pres recipient because the City will use the money to directly benefit its

residents. Finally, the City claims Iowa Rule of Civil Procedure 1.274(3) requires

the court to distribute any unclaimed funds to it, as the defendant, or to the State

of Iowa.

The class argues the district court did not abuse its discretion in ordering

the remaining funds be distributed to local charities because the settlement

agreement gave the court discretion to award the funds to cy pres recipients, the

City, or the state. The class contends the record contains substantial evidence to

support the findings of the district court and the City has failed to prove the

district court’s grounds and reasons are clearly untenable or unreasonable.

The issue of whether a district court can utilize the cy pres doctrine7 to

distribute unclaimed funds from a class action settlement to cy pres recipients is

one of first impression in Iowa, yet numerous federal courts have addressed it.

7
“The cy pres doctrine ‘takes its name from the Norman French expression, cy pres
comme possible, which means “as near as possible.”’” Nachshin, 663 F.3d at 1038
(quoting In re Airline Ticket Comm’n Antitrust Litig. (Airline II), 307 F.3d 679, 682 (8th
Cir. 2002)). “The doctrine originated to save testamentary charitable gifts that would
otherwise default.” Id. “The cy pres doctrine allows a court to modify a trust to best
carry out the testator’s intent—that is, to effectuate the ‘next best’ use of the gift.” Id. “In
the context of class action settlements, a court may employ the cy pres doctrine to ‘put
the unclaimed fund to its next best compensation use, e.g., for the aggregate, indirect,
prospective benefit of the class.’” Id. (quoting Masters v. Wilhelmina Model Agency, Inc.,
473 F.3d 423, 436 (2d Cir. 2007)). “Courts generally have approved cy pres
distributions in two circumstances.” In re Baby Prods. Antitrust Litig., 708 F.3d 163, 171
(3d Cir. 2013). “First, many courts allow a settlement that directs funds to a third party
when funds are left over after all individual claims have been satisfied. . . . Second,
some courts allow a settlement to require a payment only to a third party, that is, to
provide no recovery at all directly to class members.” Id. at 171–72 (quoting Principles
of the Law of Aggregate Litig.: Cy Pres Settlements § 3.07 cmt. a (Am. Law Inst. 2010)
[hereinafter ALI Principles]). Courts will choose the latter option when it is not feasible to
make direct distributions to class members. See Fraley v. Batman, 638 F. App’x 594,
599 (9th Cir. 2016) (Bea, J., dissenting) (“[C]y pres should be used only if: (1) it is
infeasible to distribute the money to class members directly, such as when identifying
the members of the class is exceedingly difficult or costly.” (citing ALI Principles § 3.07)).
9

See, e.g., Klier, 658 F.3d at 473 (“When modern, large-scale class actions are

resolved via settlement, money often remains in the settlement fund even after

initial distributions to class members have been made because some class

members either cannot be located or decline to file a claim. Federal district

courts often dispose of these unclaimed f[u]nds by making what are known as cy

pres distributions.”). We recognize, however, “[c]y pres distributions of

unclaimed funds have been controversial in the [federal] courts of appeals.”

Powell, 119 F.3d at 706; see also Marek v. Lane, 134 S. Ct. 8, 9 (2013) (noting

the growing use of cy pres remedies in class action settlements and recognizing

the potential need for the U.S. Supreme Court “to clarify the limits on the use of

such remedies”).

We must first consider the threshold issue of whether the district court

erred in determining “the express language of the settlement agreement does

supplant the language which would other[wise] apply under Iowa Rule of Civil

Procedure 1.274(3).” Our rules of civil procedure “have the force and effect of

law.” City of Sioux City v. Freese, 611 N.W.2d 777, 779 (Iowa 2000).

“Consequently, we interpret rules in the same manner we interpret statutes.” Id.

(citation omitted). “We look to both the language [of the rule] and the purpose

behind [it].” Jack, 822 N.W.2d at 515.

Iowa Rule of Civil Procedure 1.274(3)(e) provides:

The court shall determine what amount of the funds
available for the payment of the judgment cannot be distributed to
members of the class individually because they could not be
identified or located or because they did not claim or prove the right
to money apportioned to them. The court after a hearing shall
distribute that amount, in whole or in part, to one or more states as
unclaimed property or to the defendant.
10

The rule also provides courts shall consider several criteria in determining what

amount, if any, of remaining funds is to be distributed to the defendant, including:

(1) Any unjust enrichment of the defendant.
(2) The willfulness or lack of willfulness on the part of the
defendant.
(3) The impact on the defendant of the relief granted.
(4) The pendency of other claims against the defendant.
(5) Any criminal sanction imposed on the defendant.
(6) The loss suffered by the plaintiff class.

Iowa R. Civ. P. 1.274(3)(f). Additionally, “[t]he court, in order to remedy or

alleviate any harm done, may impose conditions respecting the use of the money

distributed to the defendant.” Iowa R. Civ. P. 1.274(3)(g).

“Settlement agreements are essentially contracts, and general principles

of contract law apply to their creation and interpretation.” Sierra Club v. Wayne

Weber LLC, 689 N.W.2d 696, 702 (Iowa 2004). Our law recognizes the parties’

freedom to contract. See State v. Baldon, 829 N.W.2d 785, 792 (Iowa 2013)

(“[C]ourts enforce contracts because they are a product of the free will of the

parties who, within limits, are permitted to define their own obligations.”); Walker

v. Am. Family Mut. Ins. Co., 340 N.W.2d 599, 601 (Iowa 1983) (recognizing

parties’ freedom to contract and requiring the court to weigh this right when

considering whether to invalidate a contract on public policy grounds). Indeed,

“[t]he law favors settlement of controversies and, accordingly, . . . ‘voluntary

settlements of legal disputes should be encouraged, with the terms of

settlements not inordinately scrutinized.’” Fees v. Mut. Fire & Auto. Ins. Co., 490

N.W.2d 55, 58 (Iowa 1992) (citation omitted); see also Iowa Trust, 587 N.W.2d at

223 (“[A] court has no authority to rewrite the terms of the settlement agreement
11

based on its perception of the merits of the settlement terms and cannot modify

the terms of the settlement agreement.” (citation omitted)).

The settlement agreement reached by the parties and approved by the

district court provides:

To the extent that the Settlement Administrator, after
exercising reasonable diligence to locate each Class Member, is
unable to distribute payment to each Class Member for any reason
. . . then, in that event, after the payment of all claims, any
remaining funds in the Escrow Account shall be awarded, as cy
pres to the Cy Pres Recipients, to the City or to the State of Iowa,
as determined by the Court following application by one or both of
the parties, notice of hearing, and hearing.

The parties agreed to be bound by the terms of the settlement agreement,

which provided the district court with discretion to distribute any remaining funds

in the escrow account to cy pres recipients after an evidentiary hearing. See

Klier, 658 F.3d at 475–76 (noting “the court cannot modify the bargained-for

terms of the settlement agreement” once the agreement’s terms have been

approved because “[t]he terms of the settlement agreement are always to be

given controlling effect”). But see In re Lupron Mktg. & Sales Practices Litig., 677

F.3d 21, 38 (1st Cir. 2012) (expressing concerns over the parties agreeing to

give discretion to the district court to distribute unclaimed funds from a class

action settlement); see also In re BankAmerica, 775 F.3d at 1066; Nachshin, 663

F.3d at 1040. We conclude the district court did not err in determining the

parties’ settlement agreement controlled even when the language of rule

1.274(3) would otherwise have applied.8

8
Although the district court did not explicitly and individually address each of the factors
listed in rule 1.274(3)(f), the findings of the court show it appropriately considered
whether the remaining funds should have been distributed to the City.
12

We now turn to the question of whether the district court abused its

discretion in distributing the remaining funds to the four charitable organizations

as cy pres recipients. For decades “federal district courts have disposed of

unclaimed class action settlement funds after distributions to the class by making

‘cy pres distributions.’” In re BankAmerica, 775 F.3d at 1063. But see id. (noting

many circuit courts have “criticized and severely restricted the practice.” (quoting

Powell, 119 F.3d at 706)). “In such a case, the unclaimed funds should be

distributed for a purpose as near as possible to the legitimate objectives

underlying the lawsuit, the interests of class members, and the interests of those

similarly situated.” Airline II, 307 F.3d at 682; see also In re Baby Prods., 708

F.3d at 169 (permitting cy pres distributions but finding them “inferior to direct

distributions to the class because they only imperfectly serve the purpose of the

underlying causes of action—to compensate class members”); Six Mexican

Workers v. Ariz. Citrus Growers, 904 F.2d 1301, 1308 (9th Cir. 1990) (holding a

cy pres distribution “will be rejected when the proposed distribution fails to

provide the ‘next best’ distribution”); In re Agent Orange Prod. Liab. Litig., 818

F.2d 179, 186 (2d. Cir. 1987). Such distributions must also account for “the

objectives of the underlying statutes,” and must “target the plaintiff class” and

“provide reasonable certainty that [class] member[s] will be benefitted.”

Nachshin, 663 F.3d at 1040.

The American Law Institute (ALI) has published the following

recommendation regarding cy pres distributions:

A court may approve a settlement that proposes a cy pres
remedy . . . . The court must apply the following criteria in
determining whether a cy pres award is appropriate:
13

(a) If individual class members can be identified through
reasonable effort, and the distributions are sufficiently large to
make individual distributions economically viable, settlement
proceeds should be distributed directly to individual class members.
(b) If the settlement involves individual distributions to class
members and funds remain after distributions (because some class
members could not be identified or chose not to participate), the
settlement should presumptively provide for further distributions to
participating class members unless the amounts involved are too
small to make individual distributions economically viable or other
specific reasons exist that would make such further distributions
impossible or unfair.
(c) If the court finds that individual distributions are not viable
based upon the criteria set forth in subsections (a) and (b), the
settlement may utilize a cy pres approach. The court, when
feasible, should require the parties to identify a recipient whose
interests reasonably approximate those being pursued by the class.
If, and only if, no recipient whose interests reasonably approximate
those being pursued by the class can be identified after thorough
investigation and analysis, a court may approve a recipient that
does not reasonably approximate the interests being pursued by
the class.

ALI Principles § 3.07. The ALI further provides in commentary that a cy pres

distribution of unclaimed funds should be made “only when it is not feasible to

make further distributions to class members and the third party’s interests

approximate those of the class members.” Id. § 3.07 cmt. a; see also Klier, 658

F.3d at 475 (“Where it is still logistically feasible and economically viable to make

additional pro rata distributions to class members, the district court should do so,

except where an additional distribution would provide a windfall to class

members with liquidated-damages claims that were 100 percent satisfied by the

initial distribution.” (footnotes omitted)). In other words, “[a] cy pres distribution

. . . arises only if it is not possible to put those funds to their very best use:

benefitting the class members directly.” Klier, 658 F.3d at 475; see also In re

Lupron, 677 F.3d at 34–35 (approving cy pres distributions when all class
14

members who had submitted claims had already been fully compensated for their

damages by prior direct distributions). Here, the record is unclear whether class

members received a full refund of the amount they paid in illegal franchise fees,

but the parties agreed to and the district court approved a distribution schedule

providing “that payment should be made to 27,537 class members in the

aggregate amount of $966,809.87.” Furthermore, the class did not request a

further direct distribution to its members, but rather, it requested that any

remaining funds in the escrow account be distributed to cy pres recipients.

Based on these facts, we conclude a cy pres distribution of the remaining

unclaimed funds was permissible in this case.

We next consider whether a cy pres distribution was appropriate here or

whether the funds should have been returned to the City or escheated to the

state. In In re Baby Products, the Third Circuit recognized three options for

distributing funds remaining after direct distributions had been made to class

members: “reversion to the defendant, escheat to the state, or distribution of the

funds cy pres.” 708 F.3d at 172; see also Powell, 119 F.3d at 706

(acknowledging “four ways in which courts have distributed unclaimed funds

[from class action settlements]: Pro rata distribution to the class members,

reversion to the defendant, escheat to the government, and cy pres distribution”).

A comment to the ALI’s recommendation states “[c]y pres is preferable . . .

[over] return[ing] the remaining funds to the defendant” because doing so

“undermine[s] the deterrence function of class actions and the underlying

substantive-law basis of the recovery by rewarding the alleged wrongdoer.” ALI

Principles § 3.07 cmt. b; see also In re Baby Prods., 708 F.3d at 172 (“Reversion
15

to the defendant risks undermining the deterrent effect of class actions by

rewarding defendants for the failure of class members to collect their share of the

settlement.”). But see Six Mexican Workers, 904 F.2d at 1308 (stating “reversion

to the defendant may be appropriate when deterrence is not a goal of the statute

or is not required by the circumstances”). “Escheat to the state preserves the

deterrent effect of class actions, but it benefits the community at large rather than

those harmed by the defendant’s conduct.” In re Baby Prods., 708 F.3d at 172.

“Cy pres distributions also preserve the deterrent effect, but (at least

theoretically) more closely tailor the distribution to the interests of class

members, including those absent members who have not received individual

distributions.” Id.

The City argues reversion does not undermine the deterrent effect in this

case because it was actually the residents of Dubuque, including class members,

who authorized the illegal franchise fees at issue here. Further, the City claims

the franchise fees were legal when they were imposed, it was not until after the

supreme court decided Kragnes I that the amount of franchise fees involved

became illegal, and the state legislature has since ratified the City’s actions in

imposing the three-percent fees. Thus, the City claims it cannot have committed

any wrongdoing and should not be punished. Alternatively, the City contends if

the court concludes a cy pres distribution is appropriate here, the City itself is the

best cy pres recipient.

The district court determined “a return of the remaining funds to the City

would not reasonably approximate the interests that were pursued by the class”

because “the group of persons who paid illegal franchise fees are not one and
16

the same with the persons who pay property taxes.” The district court further

found the City was not an appropriate cy pres recipient because “the City will

merely be using the remaining funds to reduce a debt obligation which benefits

property tax payers generally without advancing the interests specific to the

class.” Additionally, the court found the state was “not an appropriate recipient of

the remaining funds.”9 Instead, the court found distributing the remaining funds

equally among four charitable organizations serving Dubuque residents was

“most consistent and best represents the interest pursued by the class.” The

court ordered the funds distributed:

1. One-fourth to Operation: New View Community Action
Agency for the benefit of low-income persons in the City of
Dubuque with utility bills assistance;
2. One-fourth to Iowa Legal Aid Northeast Iowa Regional
Office for ongoing annual assistance to the Dubuque Office of Iowa
Legal Aid for the benefit of Dubuque City residents;
3. One-fourth to the Community Foundation of Greater
Dubuque for ongoing annual assistance to programs or projects
benefiting residents of Dubuque; and
4. One-fourth to the United Way of Dubuque Area Tri-States
for the benefit of programs or projects benefiting residents of
Dubuque.

Under the circumstances, we conclude the district court did not abuse its

discretion in ordering a cy pres distribution of the remaining funds in the

settlement escrow account to the four charitable organizations. Accordingly, we

affirm.

AFFIRMED.

9
On appeal, neither party urges the funds should have been distributed to the state.