Future of Class Representative Incentive Awards After ‘Johnson v. NPAS Solutions’

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Earlier this month, in Johnson v. NPAS Solutions, No. 18-12344, — F.4th —-, (11th Cir. Aug. 3, 2022), the United States Court of Appeals for the Eleventh Circuit denied a request for rehearing of a panel’s majority decision of three judges holding this class representative incentive awards are prohibited under US Supreme Court precedent. In denying the motion, the Eleventh Circuit confirmed that incentive rewards are prohibited by law in class action settlements filed in the federal district courts of Alabama, Florida and Georgia. Although the Eleventh Circuit is the only circuit to have banned incentive awards, some district courts in other circuits have noted that Johnson merits further investigation, perhaps opening the door to other circuits adopting Johnson. At the same time, the Eleventh Circuit’s district courts have struggled to decide whether to outright deny the incentive award claims, with many postponing ruling on those claims pending the Eleventh Circuit’s decision on the rehearing request in Johnson. The denial of the petition now leaves these district courts little, if any, discretion, and may well lead to an appeal to the Supreme Court or action by the Civil Rules Advisory Committee or Congress, as suggested Judge Jill Pryor in a dissenting opinion. opinion.

The committee’s decision

In March 2017, Charles Johnson filed a putative class action lawsuit under telephone consumer protection law against NPAS Solutions, LLC in the U.S. District Court for the Southern District of Florida. Later that year, after the parties reached a settlement of $1.432 million, the district court approved the settlement on a preliminary basis and allowed Johnson to “apply to the court to receive an amount not to exceed 6 $000 in recognition of his role in pursuing this case on behalf of the group.” members.” See Johnson, no. 9:17-cv-80393 (SD Fla. 4 Dec. 2017). Class member Jenna Dickenson then opposed the settlement, arguing in part that Supreme Court precedent prevented the award of the bounty. The District Court overruled that objection and approved the $6,000 incentive bonus in a May 2018 final order and judgment.

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