Cruz-Alvarez & Stamps Todd: First Circuit Ruling Increases Likelihood that Supreme Court Will Address Incentive Awards in Class Action Settlements

Incentive awards may appear to be little more than an afterthought in many class action settlements, but they are now poised to take center stage in class action litigation.  In late December, the First Circuit became the latest federal appellate court to chime in on incentive payments to named class representatives under Rule 23(e) in its Murray v. Grocery Delivery E-Services USA Inc.opinion. The First Circuit sided with the Second and Ninth Circuits, reiterating that incentive awards are permitted so long as they fit within the bounds of Rule 23(e). On the opposite side is the Eleventh Circuit’s 2020 decision in Johnson v. Dickenson that struck down the concept of modern-day incentive awards. The Supreme Court will soon decide whether to take up the issue, following a recent petition by the named plaintiff from the Eleventh Circuit case.

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