PATRICK E. HIGGINBOTHAM, Circuit Judge:
This appeal arises from the settlement of a class action. The defendant paid substantial sums for res judicata protection from the claims of persons assertedly injured by the toxic emissions of an industrial plant near Bryan, Texas. The monies were allocated among three subclasses, one of which was to receive medical monitoring. Upon the monitoring program’s completion, substantial sums remained unused. The district court denied the settlement administrator’s request to distribute the unused medical-monitoring funds to another subclass of persons suffering serious injuries. Instead, the court repaired to the doctrine of cy pres and ordered that the money be given to three charities suggested by the defendant and one selected by the court.
The gift of class funds to charity is attacked on two fronts: that the district court moved too quickly from the terms of the settlement agreement to a cy pres distribution, and alternatively that the district court neglected a prerequisite of the cy pres doctrine by not selecting charities with a sufficient nexus to the underlying substantive objectives of the class suit. Persuaded by the first contention, we do not reach the second. We hold that the district court abused its discretion by ordering a cy pres distribution in the teeth of the bargained-for terms of the settlement agreement, which required residual funds to be distributed within the class. We reverse the district court’s order distributing the unused medical-monitoring funds to third-party charities and remand with instructions that the district court order that the funds be distributed to the subclass .comprising the most seriously injured class members.
I.
Lillian Hayden and five others instituted this action in April of 1992 by filing suit in state district court in Brazos County, Texas. Seeking to represent themselves and a class of others similarly situated, they sought compensation for exposure to arsenic and other toxic chemicals alleged to have been emitted into the air around Bryan, Texas, by an agrochemicals plant owned and operated by the defendant, Arkema, Inc. (formerly known as Elf Atochem North America, Inc.). The defendant removed the ease to federal court supported by diversity jurisdiction.
Settlement of this aging suit had several iterations as it confronted the changing jurisprudence of federal clhss actions. The first settlement, confected three years after the filing of the state-court suit, proposed to terminate the suit with about $55 million' in payments to a class certified under Federal Rule of Civil Procedure 23(b)(2) with no opt-out provisions.1 This class was quickly undercut on appeal by our intervening decision in Allison v. Citgo Petroleum Corp.2 There we made plain that where the predominant relief sought is an award of money damages, class certification must proceed through the (b)(3) gate, with its mandatory opt-out provi[472]*472sions.3 On remand from this Court and now proceeding under Rule 23(b)(3), the parties entered into a new settlement agreement. The settlement was reduced to $41.4 million, a reduction reflecting the value of individual settlements reached with opting-out class members.
The settlement agreement created three subclasses and allocated to each subclass a portion of the $41.4 million settlement. The agreement allocated $23.34 million to Subclass A, which was defined to include all persons who lived or worked near the plant between 1973 and 1995 and had contracted any form of cancer, endured a pregnancy that ended in stillbirth, or suffered from any of several enumerated birth defects. A settlement administrator appointed by the district court distributed the funds pro rata pursuant to an agreed-upon grid deployed to score illness, its onset, and its seriousness. Ralph Klier, our appellant here, was a member of Subclass A. Klier had lived close to the plant and suffered from peripheral neuropathy and leukemia, the treatments for which so weakened his heart that he required open-heart surgery in 2003. He received $6,500 in settlement proceeds.
The settlement agreement allocated approximately $6.46 million to Subclass B. Its members were not required to demonstrate physical injury; the district court referred to Subclass B as the “nuisance-exposure/future claims” subclass. If its members met proximity-to-plant and exposure standards, they could either recover a small compensation sum or elect to participate in a medical-monitoring program, which was funded by $2 million of the proceeds allocated to the subclass. The remaining $4.46 million funded payments to the more than 12,000 subclass members who elected not to participate in the program. Responsive to the risk of latent illness, the settlement also gave members of Subclass B — who by definition had suffered no injury or illness as a result of their arsenic exposure as of the signing of the agreement — back-end opt-out rights. Any member of Subclass B who later developed an arsenic-related cancer or birth defect for which they could meet standards of general causation retained the right to file a new lawsuit against Arkema.
Finally, $10.6 million was allocated to Subclass C, which included all class members who, during the class time frame, owned property that was located within the portion of the class area that was exposed to the highest levels of arsenic emissions. The funds were to compensate members of Subclass C for property damage and diminution in property value.
At issue on this appeal is the district court’s use of the cy pres doctrine to dispose of approximately $830,000 that went unused during the administration of the medical-monitoring program created for the benefit of Subclass B. The program allowed members of Subclass B to forego receipt of a small cash payment and instead enroll in a program through which they would receive regular checkups and physician visits over a five-year period. The aim was to assist members of the subclass in monitoring their health for any indication that they were developing an arsenic-related illness. Two primary factors contributed to the program’s not exhausting its allocated funds. First, the initial participation rate was low. Some 329 members of Subclass B — less than three percent of the total subclass membership — opted to receive medical monitoring in lieu of a cash payment; just 221 attended their first monitoring examination. Second, in the course of this monitoring, no significant health problems were [473]*473found. Among those who initially chose to participate, demand for monitoring greatly diminished, yielding a high dropout rate. Only 46 class members participated in all three rounds of screening as scheduled.
As activity in the case subsided, the settlement administrator filed a status report in which he stated that the medical-monitoring program had come to a close and that approximately $830,000 had gone unused and needed to be distributed by the district court. The parties were in agreement that an additional distribution to the members of Subclass B was not economically feasible. The district court asked the parties for proposals for distribution of remaining funds. Taking an inexplicably narrow view of their duty to the class, class counsel did not respond. The defendant proposed seven entities as potential beneficiaries of a cy pres
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PATRICK E. HIGGINBOTHAM, Circuit Judge:
This appeal arises from the settlement of a class action. The defendant paid substantial sums for res judicata protection from the claims of persons assertedly injured by the toxic emissions of an industrial plant near Bryan, Texas. The monies were allocated among three subclasses, one of which was to receive medical monitoring. Upon the monitoring program’s completion, substantial sums remained unused. The district court denied the settlement administrator’s request to distribute the unused medical-monitoring funds to another subclass of persons suffering serious injuries. Instead, the court repaired to the doctrine of cy pres and ordered that the money be given to three charities suggested by the defendant and one selected by the court.
The gift of class funds to charity is attacked on two fronts: that the district court moved too quickly from the terms of the settlement agreement to a cy pres distribution, and alternatively that the district court neglected a prerequisite of the cy pres doctrine by not selecting charities with a sufficient nexus to the underlying substantive objectives of the class suit. Persuaded by the first contention, we do not reach the second. We hold that the district court abused its discretion by ordering a cy pres distribution in the teeth of the bargained-for terms of the settlement agreement, which required residual funds to be distributed within the class. We reverse the district court’s order distributing the unused medical-monitoring funds to third-party charities and remand with instructions that the district court order that the funds be distributed to the subclass .comprising the most seriously injured class members.
I.
Lillian Hayden and five others instituted this action in April of 1992 by filing suit in state district court in Brazos County, Texas. Seeking to represent themselves and a class of others similarly situated, they sought compensation for exposure to arsenic and other toxic chemicals alleged to have been emitted into the air around Bryan, Texas, by an agrochemicals plant owned and operated by the defendant, Arkema, Inc. (formerly known as Elf Atochem North America, Inc.). The defendant removed the ease to federal court supported by diversity jurisdiction.
Settlement of this aging suit had several iterations as it confronted the changing jurisprudence of federal clhss actions. The first settlement, confected three years after the filing of the state-court suit, proposed to terminate the suit with about $55 million' in payments to a class certified under Federal Rule of Civil Procedure 23(b)(2) with no opt-out provisions.1 This class was quickly undercut on appeal by our intervening decision in Allison v. Citgo Petroleum Corp.2 There we made plain that where the predominant relief sought is an award of money damages, class certification must proceed through the (b)(3) gate, with its mandatory opt-out provi[472]*472sions.3 On remand from this Court and now proceeding under Rule 23(b)(3), the parties entered into a new settlement agreement. The settlement was reduced to $41.4 million, a reduction reflecting the value of individual settlements reached with opting-out class members.
The settlement agreement created three subclasses and allocated to each subclass a portion of the $41.4 million settlement. The agreement allocated $23.34 million to Subclass A, which was defined to include all persons who lived or worked near the plant between 1973 and 1995 and had contracted any form of cancer, endured a pregnancy that ended in stillbirth, or suffered from any of several enumerated birth defects. A settlement administrator appointed by the district court distributed the funds pro rata pursuant to an agreed-upon grid deployed to score illness, its onset, and its seriousness. Ralph Klier, our appellant here, was a member of Subclass A. Klier had lived close to the plant and suffered from peripheral neuropathy and leukemia, the treatments for which so weakened his heart that he required open-heart surgery in 2003. He received $6,500 in settlement proceeds.
The settlement agreement allocated approximately $6.46 million to Subclass B. Its members were not required to demonstrate physical injury; the district court referred to Subclass B as the “nuisance-exposure/future claims” subclass. If its members met proximity-to-plant and exposure standards, they could either recover a small compensation sum or elect to participate in a medical-monitoring program, which was funded by $2 million of the proceeds allocated to the subclass. The remaining $4.46 million funded payments to the more than 12,000 subclass members who elected not to participate in the program. Responsive to the risk of latent illness, the settlement also gave members of Subclass B — who by definition had suffered no injury or illness as a result of their arsenic exposure as of the signing of the agreement — back-end opt-out rights. Any member of Subclass B who later developed an arsenic-related cancer or birth defect for which they could meet standards of general causation retained the right to file a new lawsuit against Arkema.
Finally, $10.6 million was allocated to Subclass C, which included all class members who, during the class time frame, owned property that was located within the portion of the class area that was exposed to the highest levels of arsenic emissions. The funds were to compensate members of Subclass C for property damage and diminution in property value.
At issue on this appeal is the district court’s use of the cy pres doctrine to dispose of approximately $830,000 that went unused during the administration of the medical-monitoring program created for the benefit of Subclass B. The program allowed members of Subclass B to forego receipt of a small cash payment and instead enroll in a program through which they would receive regular checkups and physician visits over a five-year period. The aim was to assist members of the subclass in monitoring their health for any indication that they were developing an arsenic-related illness. Two primary factors contributed to the program’s not exhausting its allocated funds. First, the initial participation rate was low. Some 329 members of Subclass B — less than three percent of the total subclass membership — opted to receive medical monitoring in lieu of a cash payment; just 221 attended their first monitoring examination. Second, in the course of this monitoring, no significant health problems were [473]*473found. Among those who initially chose to participate, demand for monitoring greatly diminished, yielding a high dropout rate. Only 46 class members participated in all three rounds of screening as scheduled.
As activity in the case subsided, the settlement administrator filed a status report in which he stated that the medical-monitoring program had come to a close and that approximately $830,000 had gone unused and needed to be distributed by the district court. The parties were in agreement that an additional distribution to the members of Subclass B was not economically feasible. The district court asked the parties for proposals for distribution of remaining funds. Taking an inexplicably narrow view of their duty to the class, class counsel did not respond. The defendant proposed seven entities as potential beneficiaries of a cy pres distribution: five local charities, the Bryan Independent School District, and the city of Bryan.
Klier opposed the proposal. He urged that the monies set aside but not drawn down for medical monitoring be distributed pro rata to members of Subclass A. Klier argued that an additional distribution to the members of Subclass A was economically feasible and would be equitable since the members of Subclass A had been found to suffer from arsenic poisoning, related cancers, and birth defects that are compensable under the settlement. In the alternative, Klier argued that the defendant’s proposed charities were not proper recipients under the doctrine of cy pres, lacking a sufficient nexus to the injuries of the class or the principles the class action sought to vindicate. Klier proposed that the money instead be used to fund arsenic-pollution research at Texas A & M University.
In April of 2010, some eighteen years after this litigation commenced and fourteen years after the closing of the plant, the district court ordered distribution of the remaining funds to three of the charities proposed by the defendant: a scholarship program called Arkema New Horizons Scholarships and two museums. The court then added a charity of its own, a local history and genealogy library. The money was to be distributed in four equal shares. Despite having pledged several years before to consider a proposal to reallocate the medical-monitoring funds to other-members of the class,4 the court never addressed Klier’s primary request that the monies be distributed to the members of Subclass A, denying it only implicitly. Instead, the district court proceeded directly to Klier’s alternative proposal that the money be donated to Texas A&M, which it rejected because it would not benefit the Bryan community. The district court expressed its view that the distributions it ordered would provide benefits “perhaps to friends and relatives of the claimants, perhaps to total strangers who happen to live in Bryan.”
II.
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 finds by making what are known as cy pres distributions. Cy pres is an equitable doctrine that has been imported into the class-action context from the field of trust law:
The cy pres doctrine takes its name from the Norman French expression, cy [474]*474pres comme possible, which means “as near as possible.” The doctrine originated to save testamentary charitable gifts that would otherwise fail. Under cy pres, if the testator had a general charitable intent, the court will look for an alternate recipient that will best serve the gift’s original purpose. In the class action context, it may be appropriate for a court to use cy pres principles to distribute unclaimed funds. 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.5
In the class-action context, a cy pres distribution is designed to be a way for a court to put any unclaimed settlement funds to their “‘next best compensation use, e.g., for the aggregate, indirect, prospective benefit of the class.’ ”6
We review for an abuse of discretion a district court’s decision to resort to the cy pres doctrine for the distribution of unclaimed class-action settlement funds.7 By definition, a district court abuses its discretion when it makes an error of law or applies an incorrect legal standard.8 As to errors of this latter type, our review is de novo,9 as is our review of the district court’s interpretation of an unambiguous settlement agreement.10
A.
We begin our analysis with a return to basic principles. As we will explain, these core principles control and decide this appeal. First there is the ever-antecedent and overarching limitation on class-action litigation, the Rules Enabling Act. The Federal Rules of Civil Procedure cannot work as substantive law.11 This core stricture demands a narrow construction of Rule 23, which must be “applied with the interests of absent class members in close view.”12 Second, a class settlement generates property interests. Each class member has a constitutionally recognized property right in the claim or cause of action that the class action resolves.13 The settlement-fund proceeds, having been generated by the value of the class members’ claims, belong solely to the class members.14
[475]*475 These precepts define the first— and often the last — arena of analysis, imposing foundational limitations on a district court’s discretion as it administers a class-action settlement. Because the settlement funds are the property of the class, a cy pres distribution to a third party of unclaimed settlement funds is permissible “only when it is not feasible to make further distributions to class members.”15 Where it is still logistically feasible and economically viable to make additional pro rata distributions to class members, the district court should do so,16 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.17 A cy pres distribution puts settlement funds to their next-best use by providing an indirect benefit to the class. That option arises only if it is not possible to put those funds to their very best use: benefitting the class members directly.
Because a district court’s authority to administer a class-action settlement derives from Rule 23, the court cannot modify the bargained-for terms of the settlement agreement.18 That is, while the settlement agreement must gain the approval of the district judge,19 once approved its terms must be followed by the court and the parties alike. The district [476]*476judge must abide the provisions of the settlement agreement, reading it to effectuate the goals of the litigation. This is not a free exercise of cy pres, but a determination of how the settlement agreement’s many , provisions define the class’s property interests and allocate those interests once created.20 The terms of the settlement agreement are always to be given controlling effect.21 Qy pres comes on stage only to rescue the objectives of the settlement when the agreement fails to do so. , Even then, the court’s discretion remains tethered to the interest of the class, the entity that generated the funds.
B.
It is apparent from its structure that the settlement contract between Arkema and the class contemplated that each subclass would first draw upon the sums allocated to it. The parties memorialized their settlement in two documents: the Class Action Settlement Agreement (“the Agreement”) and the Protocol for Distribution of Settlement Fund (“the Protocol”). As relevant here, the Agreement created and defined the three subclasses and allocated a designated portion of the total settlement proceeds to the three subclass funds. Class members were eligible for payments from the subclass funds pursuant to the procedures and processes set forth in the Protocol. The Agreement specifies that each subclass fund shall be used to fund payments to the members of its assigned subclass. Arkema points out that paragraph 27 of the Protocol directs that any money left over in any subclass fund “shall be distributed pro rata to all Claimants in that subclass.” Arkema argues that this ends the matter: Abiding the contract, the district court had no authority to allocate funds not drawn down by one subclass to the members of another subclass, even Subclass A, whose members were the most grievously injured and had not been fully compensated.
Arkema’s argument is flawed at several junctures. To begin with, Arkema concedes that paragraph 27’s directive could not have been followed here: the leftover funds were allocated to Subclass B, and it is not economically viable to distribute those funds pro rata to the 12,657 members of Subclass B. Arkema accepts the precept that even an explicit directive of the settlement contract need not be followed if it is not feasible to do so.
Even if the Protocol stopped here, and it did not, the contention that want of feasibility freed the district court to donate the residual property interest of the class to charity is mistaken. This is not a case where the settlement agreement itself provides that residual funds shall be distributed via cy pres.22 Quite the opposite: the [477]*477district court’s decision to distribute the unused funds via cy pres finds no support in the text of the settlement documents. Indeed, Arkema itself would appear to have a greater claim to the funds than a charity, however worthwhile the charity, absent a contrary directive from the property-interest-defining settlement agreement.23
But the Protocol is not so silent as the defendant would have it. Paragraph 28 provides: “The District Court may make changes to the terms of this protocol as necessary for the benefit of the Settlement Class Members.”24 This provision is but a limited grant of authority to the district court. Importantly, the limitation imposed is that the district court must act for the benefit of the class as a whole. Neither its authority nor its duty25 is cabined off on a subclass-by-subclass basis. ,If it is not feasible to distribute the funds under paragraph 27, paragraph 28 controls, and it authorizes the district court to provide a benefit to the settlement-class members. “There is no indirect benefit to the class from the defendant’s giving the money to someone else,”26 and Arkema falls silent on the reality that it was feasible to allocate the funds to Subclass A.
This is enough, but there is more in this Protocol. Paragraph 29 further provides, “The Settlement Administrator may petition the District Court for reallocation of available funds among the [subclasses] on a showing of good cause if ... he determines that considerations of equity and fairness require' reallocation.” About a year after medical monitoring began, the settlement administrator did exactly that, seeking leave to disburse any unused funds to other class members, “particularly those who are most seriously affected by exposure to chemicals.” The district court denied this request, stating instead that it would “decide later what to do with the remainder of the'- medical, monitoring fund,” When that, later date arrived, the court made no attempt to reconcile its decision to distribute the residue of the fund to third-party charities with the settlement- administrator’s prior request under paragraph 29.
The, Protocol did more than merely empower the district court to allocate medical-monitoring funds unused by members of Subclass B to members of other subclasses^ — it required the court to do so for as long as further, distributions were feasible and equitable. That it was not feasible to distribute these funds to members of Subclass B is not disputed. The feasibility of a further distribution to members of Subclass A is likewise conceded. And equity strongly favors an additional distribution to Subclass A. The members of Subclass B suffered no injuries or. illnesses; those in Subclass A suffered serious personal injuries.27 Claimants in Subclass A [478]*478have already received some measure of compensation for their injuries, but it is far from full. The appellant here endured cancer, nerve damage, and a heart transplant and received $6,500 for his trouble. Subclass A’s damages claims were non-liquidated and included claims for both actual and exemplary damages.
The very structure of Subclass B supports the entitlement of Subclass A. As we have explained, Subclass B was created to address the fears of latent disease harbored by persons who lived or worked within a defined proximity to the plant but who were asymptomatic. Access to medical monitoring, coupled with a back-end opt-out right to sue should injury later arrive, were the relief afforded. Both Subclass A and Subclass B addressed injury to the person. Members of the former had already incurred physical injury. Members of the latter were asymptomatic persons with a risk that injury of the type compensated in Subclass A might be later suffered. Addressing the risk of latent injury by definition meant dividing settlement monies between the two subclasses. The risk of Subclass B members was never realized. When significant injuries did not manifest themselves among members of Subclass B, the already light use of medical monitoring by its members declined even further, leaving the funds now at issue unspent. By the agreement, these monies were to provide a service to Subclass B members, not to compensate them for a later-arriving disease. In that event, they could sue, not having released their claims in the settlement. Members of Subclass A, by contrast, were prohibited from later opting out of the agreement. Res judicata protection against their claims was the most valuable consideration Arkema received in exchange for agreeing to the settlement.
Read, as they must be, with our core precepts at hand, the relevant provisions of the Protocol shape the property interest created by the Agreement and thereby constrain the district court’s discretion in disposing of that property. The Protocol is an affirmation that funds initially allocated to a particular subclass are to be used, in the end, for the interests of the entire settlement class. We hold that the settlement agreement did not authorize the district court to make a charitable gift of the unused medical-monitoring funds and that the district court erred when it rejected the settlement administrator’s request that the funds be reallocated to the members of Subclass A.
Our decision lies comfortably with prior decisions of this Court and our sister circuits,28 which have necessarily taken case-specific approaches to the role of the federal district judge in the distribution of monies left unclaimed after administration of a class settlement. As we turn to the fit of the present case within the broader decisional line, we remind of the case’s dimension. Here we treat a distinct category of such cases, in which funds have gone unused by a particular subclass.29 [479]*479Subclass B’s failure to fully draw down the medical-monitoring fund did not constitute an abandonment or relinquishment by the class of its property interest in the settlement.30 The funds were unused by Subclass B, not unclaimed by the class as a whole.31 Proceeding from the premise that the settlement of damage claims in a class action both creates contractual obligations and defines property, we have emphasized the terms of the settlement agreement as approved by the district court. That agreement preserved for the class something akin to a reversionary interest in funds unused by a particular subclass. Where the terms of a settlement agreement are sufficiently clear, or, more accurately, insufficient to overcome the presumption that the settlement provides for further distribution to class members,32 there is no occasion for charitable gifts, and cy pres must remain offstage.
C.
Arkema pushes back with three counterarguments. None is sufficient to carry the day. First, Arkema argues that paragraph 28 of the Protocol authorizes the district court to make changes to the terms of the Protocol, not the Agreement, and that it is the Agreement that fixes the amount of money to be allocated to each subclass. It was the Agreement that made the initial allocation of money among the three subclasses. But it is paragraph 27 of the Protocol that controls the allocation of any monies remaining after the initial distribution. In addition, Arkema’s argument turns a blind eye to the language of paragraph 29, which expressly authorizes the district court, upon a request from the settlement administrator, to reallocate funds one subclass to another. Deciding to reallocate funds from the subclass with nuisance-exposure claims to the subclass with .serious personal-injury claims was not beyond the scope of the authority that the Protocol conferred on the district court.
Next, Arkema argues that the members of Subclass A have already been fully compensated because they were paid in full according to the terms of the Agreement. Not so. The fact that the members of Subclass A have received the payment authorized by the settlement agreement does not mean that they have been fully compensated. As a general matter, “few settlements award 100 percent of a class member’s losses, and thus it is unlikely in most cases that further distributions to class members would result in more than 100 percent recovery for those class members.”33 Moreover, the Agreement does not even purport to provide full, individual[480]*480ized compensation. It authorized pro rata distributions that were dictated by a formula that was designed to ensure, within the limits of the fund, that each claimant obtained some relief. It valued each injury in relative terms, not absolute terms.
Finally, Arkema argues that equity weighs in favor of a cy pres distribution because distributing the unclaimed funds to members of Subclass A would deprive Subclass B of its settlement benefits. This argument is a straw man. All agree that additional distributions to the members of-Subclass B were not economically viable. No proposal before the district court would have allowed Subclass B to receive the full value allocated to it by the original agreement. The choice was not between a distribution to Subclass A and a distribution to Subclass B; the choice was between a distribution to Subclass A and a distribution to charity. Although it is generally true that additional “distributions to class members better approximate the goals of the substantive laws than distributions to third parties that were not directly injured by the defendant’s conduct,”34 the district court had no need for that principle. The settlement agreement required the court to reallocate the funds among the subclasses of the class that generated the settlement fund.
III.
The district court abused its discretion by ordering 'a cy pres distribution instead of distributing the unused medical-monitoring funds to the members of Subclass A. We reverse the district court’s cy pres order and remand with instructions that the residual funds be distributed to the members of Subclass A consistently with the terms of the settlement agreement.
REVERSED and REMANDED.