Eleventh Circuit Decides Against Allowing Incentive Awards in Class Action Lawsuits

For over 50 years, the Federal Rules of Civil Procedure recognized this principle by allowing the named plaintiffs who represent class members in a class action lawsuit to recover incentive pay. Now, a recent decision in the Eleventh Circuit Court of Appeals threatens to undo this precedent and remove any extra consideration or incentive individuals have for acting as class representatives.

The Purpose and Utility of Incentive Awards

In a class action lawsuit, the class of plaintiffs who all share a common injury are represented in court by a class representative. This person has also been injured in the same way as other class members and seeks compensation along with the class members. The class representatives appear in court and often invest considerable time into the class action by working with attorneys. 

To compensate these class representatives, many courts allow the representatives to receive a financial incentive award.

Eleventh Circuit Court of Appeals Prohibits Incentive Awards

In Johnson v. NPAS Solutions, Inc., relying on a pair of U.S. Supreme Court cases from the 1800s, the Eleventh Circuit found that these incentive awards were not permitted in class action lawsuits. This decision means that within the Eleventh Circuit’s jurisdiction, class representatives will not receive any incentive award for their service or efforts.

This decision will likely cause attorneys to file class action lawsuits in other jurisdictions which do recognize incentive awards. The Eleventh Circuit’s decision does not apply to other federal circuits and their subordinate district courts, so a class action filed elsewhere could allow representatives to circumvent this restriction and receive incentive awards.

The Eleventh Circuit’s decision also does not apply to Florida Courts and may be easy to circumvent by simply allowing the class representative to provide a broader release than the remainder of the class.  

There is also a push now, too, to have the U.S. Supreme Court step in and authoritatively approve incentive awards in class action lawsuits throughout the country.

Call Shrader, Mendez & O’Connell, Attorneys at Law Today

If you or a loved one has been injured and need legal counsel or representation, let Shrader, Mendez & O’Connell’s team help. Call us at (813) 360-1529 and speak to us today about your needs.