Ninth Circuit Reverses Approval of Class Settlement Where Incentive Awards Were Conditioned on Representatives’ Support for Settlement

Experian in Ruddington Fields

Experian in Ruddington Fields (Photo credit: Ruddington Photos)

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, citing a failure by the class representatives and class counsel to adequately represent the class.  Radcliffe, et al v. Experian Information Solutions, Inc., et al., Case No. 11-56376, __ F.3d __ (Apr. 22, 2013).  The court took issue with the incentive awards to the class representatives that were conditioned on the class representatives’ support for the settlement.  The agreement provided for incentive awards:

On or before October 19, 2009, Proposed 23(b)(3) Settlement Class Counsel shall file an application or applications to the Court for an incentive award, to each of the Named Plaintiffs serving as class representatives in support of the Settlement, and each such award not to exceed $5,000.00.

The court concluded that these conditional awards caused a divergence of interests between the representatives and the class: Read the rest of this entry »

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