Kennedy, Davis Quoted in Law360 About Incentive Payments in Class Action Settlements
Partner Richard Davis and Senior Counsel Christina Kennedy were quoted in the Law360 article, “,” which advised employment lawyers to consider retooling class action settlement agreements to make sure that incentive payments for lead plaintiffs don’t blow up the whole deal in light of a recent Eleventh Circuit ruling.
In September the Eleventh Circuit questioned whether the named plaintiffs in a class action could consider approving a class-wide settlement out of self-interest, rather than doing what’s good for class members, because of the incentive payments.
While the ruling in the Eleventh Circuit is clear, lawyers who practice in other circuits can take steps to ensure the judge doesn’t lean on that decision to reject an award for a named plaintiff.
Kennedy and Davis provided Law360 tips for employment lawyers wanting to steer class action settlements to court approval.
Make it easier for the court to scrutinize a settlement by spelling out why it’s an excellent result for the litigants. “If I can make the court’s job easier where they can incorporate as much of our work product as possible, I will do that,” Kennedy told Law360. “The kind of work product that most defense counsel turns in — we like things to be adopted by the court.”
Davis had three pieces of advice. First, lawyers should argue that the Eleventh Circuit panel was simply wrong on the law because it relied on two U.S. Supreme Court cases that predate present-day class action rules.
“No. 2, I want to provide sufficient detail in my motion for final approval, perhaps greater than what is done currently, to show why it really is an excellent result for the class and why, therefore, there is no conflict,” he said.
Third, class counsel may want to track a lead plaintiff’s involvement, similar to how attorneys track billable hours.
“As difficult as it sounds, the time may very well come when plaintiffs have to document in some manner their time and expenses, similar to the way that attorneys do, that the incentive award bears some relationship to what the plaintiffs did,” Davis said.
