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Class Action Settlement Approval Reversed Where Class Representative Incentive Awards Conditioned on Settlement Support

In Class Actions, Incentive Award on April 22, 2013 at 9:32 pm
Sometimes money is a powerful incentive.

Sometimes money is a powerful incentive. (Photo credit: wayneandwax)

The Ninth Circuit today reversed a trial court’s approval of a class action settlement against credit reporting agencies under the Fair Credit Report Act, citing a failure by the class representatives and class counsel to adequately represent the class.  Radcliffe, et al v. Experian Information Solutions, Inc., et al., Case No. 11-56376, __ F.3d __ (Apr. 22, 2013).  The court took issue with the incentive awards to the class representatives that were conditioned on the class representatives’ support for the settlement.  The court reasoned that these conditional awards caused a divergence of interests between the representatives and the class:

These conditional incentive awards caused the interests of the class representatives to diverge from the interests of the class because the settlement agreement told class representatives that they would not receive incentive awards unless they supported the settlement.

You can read more here.

By CHARLES H. JUNG

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