Ninth Circuit Finds Both Class Counsel and Class Representative Inadequate Where Incentive Awards Conditioned on Reps’ Support for Settlement

English: Mimi & Eunice, “Incentive to Create”....

English: Mimi & Eunice, “Incentive to Create”. Categories at the source website: Arguments, IP. Transcript: Mimi: No one would create without monetary incentives. Eunice: Nonsense. People create for all kinds of reasons. Mimi: Who paid you to say that?! (Photo credit: Wikipedia)

Today, the Ninth Circuit reversed a district court’s approval of a class action settlement against credit reporting agencies under the Fair Credit Report Act.  Radcliffe, et al v. Experian Information Solutions, Inc., et al., Case No. 11-56376, __ F.3d __ (Apr. 22, 2013).  The Court cited a failure by the class representatives and class counsel to adequately represent the class, taking 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.


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