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2020 has been a year of change, including in high-stakes class action litigation. From the Eleventh Circuit shutting down incentive payments, to courts coming to grips with Bristol-Myers in the class context, the year has been filled with major developments. Notably, the courts have also begun to lay the groundwork for additional developments, setting up a 2021 that may be as tumultuous as this last year.
No Incentive Payments for Class Representatives in Eleventh Circuit
The Eleventh Circuit unexpectedly delivered a major blow to class action plaintiffs in Johnson v. NPAS Solutions, where it held individual incentive awards for class representatives were “decidedly objectionable” and invalid. The court specifically noted, “Although it’s true that such awards are commonplace in modern class action litigation, that doesn’t make them lawful, and it doesn’t free us to ignore Supreme Court precedent forbidding them.” The Eleventh Circuit cited Trustees v. Greenough, 105 U.S. 527 (1882), and Central Railroad & Banking Co. v. Pettus, 113 U.S. 116 (1885), in its decision, and after a thorough analysis declared that Supreme Court precedent prohibits these awards. While it is unclear whether courts outside the circuit will adopted this analysis, it could substantially de-incentivizing individuals to become class representatives. While the awards class representatives receive are relatively small, it begs the question: With no award, will potential class representatives want to subject themselves to a trying discovery process?
