Yesterday, in Johnson v. NPAS Solutions, the Eleventh Circuit held that so-called "incentive" or "service" awards to named class-action plaintiffs are unlawful. That is, in a class-action settlement, a named plaintiff may not be paid extra money (over and above money paid to all class members) as reimbursement/compensation for her efforts on behalf of the class or as an incentive to act as a representative plaintiff. Despite the near ubiquity of these awards in modern class-action practice, the court of appeals held that two Supreme Court decisions from the 1800's demanded this result. See Trustees v. Greenough, 105 U.S. 527 (1882), and Central Railroad & Banking Co. v. Pettus, 113 U.S. 116 (1885). The opinion addresses a couple other issues that arise frequently in class-action settlements. Worth reading.
HT Mike Kirkpatrick
