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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

Judge Illston of Northern District Approves $3.5 Million Non-Reversionary Settlement of Meal and Rest Break Class Action, With Award of 25% of Fund in Attorneys Fees, and Incentive Award of $20,000 to Each Class Representative

In Attorney's Fees, Class Actions, Incentive Award, Meal and Rest Breaks, Settlement on October 6, 2010 at 9:25 am
Seal of the en:United States District Court fo...
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The Northern District of California granted final approval of a settlement in a meal and rest break class action in Ross v. US Bank National Association, No. C 07-02951 SI, 2010 WL 3833922 (N.D. Cal. Sept. 29, 2010).  The complaint was filed on behalf of all hourly employees who worked at a California U.S. Bank in-store branch.  See Memorandum of Points and Authorities in Support of Plaintiff’s Motion for Preliminary Approval of Class Action Settlement (“MPA”) at 1.  Plaintiffs alleged that they and other hourly paid employees have not been provided a legally compliant meal and rest period on Sundays and worked off the clock pre and post shift and during their meal breaks. Id. The parties settled the case, and the settlement agreement provides for the payment of compensation to each Participating Class Member based on his or her total workweeks in a Class position during a certain period.  Ross, 2010 WL 3833922, *1.   The court approved a non-reversionary settlement of $3,500,000 for approximately 3,300 settlement class members.  MPA at 2.

Attorneys’ Fees and Costs

Plaintiffs’ counsel sought an award of 30% of the settlement fund,  $1,050,000.00, as attorneys’ fees.  Ross, 2010 WL 3833922, *1.   Plaintiffs estimate that the total time spent litigating this case, including time overseeing claims administration, will be approximately 2647.7 hours.  Id. Plaintiffs’ counsel listed hourly rates ranging from $185 an hour to $650 an hour.  MPA at 14.  The court reduced the award to 25%: Read the rest of this entry »