Supreme Court Declines To Hear Challenge To Validity Of Incentive Awards

• Jurisdiction: United States,Federal
• Author: Mr Kevin Ranlett, Archis Parasharami and Daniel E. Jones
• Law Firm: Mayer Brown
• Published date: 08 May 2023

A common feature in class action settlements is an incentive (or service) award for each named plaintiff'an extra payment above and beyond what they would receive as ordinary class members that is in theory designed to compensate them for the work of being a named plaintiff. A circuit split has developed over whether incentive awards are permissible in federal class action lawsuits. But the Supreme Court's guidance on whether these awards are improper will have to await another day, because the Court recently denied the petitions for review in Johnson v. Dickenson, No. 22-389, and Dickenson v. Johnson, No. 22-517.

The Eleventh Circuit's decision

The certiorari petitions arose out of a case in which a panel of the Eleventh Circuit held that longstanding Supreme Court precedent governing trusts forbids incentive payments. See Johnson v. NPAS Solutions, LLC, 975 F.3d 1244 (11th Cir. 2020), reh'g denied, 43 F.4th 1138 (2022). In the trust line of cases, the Supreme Court had ruled that trust assets could be used to pay the trustee's attorneys but not for the trustee's own time and private personal expenses. See Centr. R.R. & Banking Co. v. Pettus, 113 U.S. 116 (1885); Trustees v. Greenough, 105 U.S. 527 (1882). The Eleventh Circuit panel analogized the named plaintiff in a class action...