Jenna Dickenson v. NPAS Solutions, LLC ( 2022 )

USCA11 Case: 18-12344 Date Filed: 08/03/2022 Page: 1 of 36
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 18-12344
____________________
CHARLES T. JOHNSON,
on behalf of himself and others
similarly situated,
Plaintiff-Appellee,
JENNA DICKENSON,
Interested Party-Appellant,
versus
NPAS SOLUTIONS, LLC,
Defendant-Appellee.
____________________
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2 18-12344
Appeal from the United States District Court
for the Southern District of Florida
D.C. Docket No. 9:17-cv-80393-RLR
____________________
Before WILLIAM PRYOR, Chief Judge, WILSON, JORDAN,
ROSENBAUM, JILL PRYOR, NEWSOM, BRANCH, GRANT, LUCK,
LAGOA, and BRASHER, Circuit Judges.
BY THE COURT:
A petition for rehearing having been filed and a member of this
Court in active service having requested a poll on whether this
case should be reheard by the Court sitting en banc, and a major-
ity of the judges in active service on this Court having voted
against granting rehearing en banc, it is ORDERED that this case
will not be reheard en banc.
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18-12344 NEWSOM, J., Concurring 1
NEWSOM, Circuit Judge, concurring in the denial of rehearing en
banc:
It has become customary for the author of a panel opinion
to file a “concurral” defending his or her handiwork against a col-
league’s “dissental” when the full Court declines to rehear a case
en banc. Ordinarily, I’d be inclined to do just that. (Perhaps it’s a
character flaw, but giving others the last word isn’t always my
strong suit. See, e.g., Keohane v. Florida Dep’t of Corr. Sec’y, 981
F.3d 994, 996–1003 (11th Cir. 2020).) This case, though, has been
pending too long already. The panel issued its decision in Septem-
ber 2020—almost two full years ago now. The parties and the bar
are entitled to closure. Given the circumstances, I’m content to let
the panel opinion speak for itself.
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18-12344 JILL PRYOR, J., Dissenting 1
JILL PRYOR, Circuit Judge, joined by WILSON, JORDAN, and
ROSENBAUM, Circuit Judges, dissenting from the denial of rehear-
ing en banc:
In the panel decision in this case, the majority held that two
Supreme Court cases decided in the 1880s prohibit district courts
from approving, under any circumstances, incentive or service
awards for class representatives in class action settlement agree-
ments. See Johnson v. NPAS Sols., LLC, 975 F.3d 1244, 1255 (11th
Cir. 2020). According to the majority opinion, these two cases dic-
tate that such awards—despite the parties having agreed to them
and district courts having approved them as reasonable and fair to
the entire class under Federal Rule of Civil Procedure 23—are
simply barred. See Trustees v. Greenough, 105 U.S. 527 (1881);
Cent. R.R. & Banking Co. v. Pettus, 113 U.S. 116 (1885).
By holding that incentive awards are unlawful per se, the
majority opinion broke with decisions from this and every other
circuit allowing these awards when properly approved under the
strictures of Rule 23. Indeed, the majority opinion adopted a posi-
tion that had never been embraced by any court. Of course, the
mere fact that an argument has never been accepted before does
not mean it is wrong. One circuit has expressly rejected the novel
Greenough-Pettus argument, however,1 and since the majority
opinion in this case issued, every court outside this circuit to have
1
Melito v. Experian Mktg. Sols., Inc., 923 F.3d 85, 96 (2d Cir. 2019).
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2 JILL PRYOR, J., Dissenting 18-12344
considered it has declined to follow it.2 And no wonder. In Green-
ough and Pettus, decided long before modern class actions were
born, the Supreme Court applied equitable trust principles in the
absence of any authority for compensating creditors who through
litigation benefitted a common fund. Operating in that now-super-
seded legal landscape, the Court rejected compensation for a cred-
itor’s expenses that were—as the panel majority opinion candidly
acknowledged—only “roughly analogous” to today’s incentive
awards approved under Rule 23. Johnson, 975 F.3d at 1257. So it
seems to me more than a stretch to hold that these cases prohibit
2
See Knox v. John Varvatos Enters. Inc., 520 F. Supp. 3d 331, 349 (S.D.N.Y.
2021); Somogyi v. Freedom Mortg. Corp., 495 F. Supp. 3d 337, 353–54 (D.N.J.
2020); Halcom v. Genworth Life Ins. Co., No. 3:21-cv-19, 2022 WL 2317435,
at *10, *13 (E.D. Va. June 28, 2022); Grace v. Apple, Inc., No. 17-cv-00551, 2021
WL 1222193, at *7 (N.D. Cal. Mar. 31, 2021); In re Apple Inc. Device Perfor-
mance Litig., No. 5:18-md-02827, 2021 WL 1022866, at *11 (N.D. Cal. Mar. 17,
2021); Wickens v. Thyssenkrupp Crankshaft Co., LLC, No. 1:19-cv-6100, 2021
WL 267852, at *2 (N.D. Ill. Jan 26, 2021); Vogt v. State Farm Life Ins. Co., No.
2:16-cv-04170, 2021 WL 247958, at *3–4 (W.D. Mo. Jan. 25, 2021);Wood v.
Saroj & Manju Invs. Phila. LLC, No. 19-cv-2820, 2020 WL 7711409, at *5 n.8
(E.D. Penn. Dec. 28, 2020); Izor v. Abacus Data Sys., Inc., No. 19-cv-01057,
2020 WL 12597674, at *8 (N.D. Cal. Dec. 21, 2020); Hunter v. CC Gaming,
LLC, No. 19-cv-01979, 2020 WL 13444208, at *7–8 (D. Colo. Dec. 16, 2020); In
re Lithium Ion Batteries Antitrust Litig., No. 13-MD-02420, 2020 WL 7264559,
at *24 n.24 (N.D. Cal. Dec. 10, 2020); see also Hart v. BHH, LLC, No. 15-cv-
4804, 2020 WL 5645984, at *5 n.2 (S.D.N.Y. Sept. 22, 2020) (noting that Second
Circuit precedent prevented the court from following Johnson but calling on
Congress to address the validity of incentive awards).
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18-12344 JILL PRYOR, J., Dissenting 3
incentive awards in all cases, no matter that the parties and the dis-
trict court agree the awards are fair and appropriate.
I agree with Judge Martin’s well-reasoned dissent to the
panel opinion that the majority was wrong. The fairness-based
standard for evaluating disparate settlement distributions between
representative plaintiffs and class members set forth in Holmes v.
Continental Can Company, 706 F.2d 1144 (11th Cir. 1983), which
panels of this court have continually applied in reviewing class ac-
tion settlements, does not conflict with Supreme Court precedent
and should continue to govern our analysis of incentive awards au-
thorized by class action settlement agreements. See Johnson,
975 F.3d at 1264 (Martin, J., concurring in part and dissenting in
part).
The stakes are high. If the panel majority opinion was wrong
that Greenough and Pettus compel its holding, then it far over-
reached by banning all incentive awards in class actions. As it
stands, the panel majority’s opinion threatens the very viability of
class actions in this circuit. This is particularly so in small-dollar-
value class actions, where incentive awards help to encourage po-
tential plaintiffs to serve as class representatives despite having to
take on significant additional responsibilities while receiving the
same modest recovery as other class members. I respectfully dis-
sent from the denial of rehearing en banc to correct the panel ma-
jority opinion’s grave error.
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4 JILL PRYOR, J., Dissenting 18-12344
I. BACKGROUND
NPAS Solutions, a company that collects medical debts, re-
peatedly robocalled3 Charles Johnson on his cell phone, trying to
collect a debt. Unfortunately, NPAS was trying to collect the debt
from a person Mr. Johnson did not know. Again and again, Mr.
Johnson informed NPAS that it was calling the wrong number and
asked it to stop calling. Yet NPAS persisted with its collection calls.
Fed up, Mr. Johnson took the initiative to sue the company,
on behalf of himself and a putative class of similarly situated indi-
viduals, alleging violations of the Telephone Consumer Protection
Act (TCPA), 47 U.S.C. § 227. Mr. Johnson hired legal counsel with
significant experience in TCPA class action litigation to investigate
his and the other class members’ claims. No one disputes that after
initiating the suit, Mr. Johnson was “actively involved in [the] case
throughout the proceedings.” Doc. 44-1 at 14.4 For example, he
spoke frequently with his attorneys, read and approved documents
before his attorneys filed them, and supplied information in re-
sponse to NPAS’s discovery requests.
NPAS agreed to settle the claims with Mr. Johnson and the
putative class. The settlement agreement required NPAS to pay
$1.432 million into a settlement fund to compensate participating
3“Robocalling” means calling using an automatic dialing system and an artifi-
cial prerecorded voice.
4 “Doc.” numbers refer to the district court’s docket entries.
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18-12344 JILL PRYOR, J., Dissenting 5
class members. Under the terms of the agreement, Mr. Johnson
would receive $6,000 from the fund for serving as class representa-
tive. The remainder of the fund—the other 99.58 percent—minus
the plaintiffs’ attorney’s fees and costs, would be distributed
equally among the participating class members. The parties sub-
mitted the proposed settlement agreement to the district court for
preliminary approval under Rule 23, and the court gave its ap-
proval. At the same time, the district court set a deadline for any
class member to file a claim for recovery or object to the settlement
agreement.
More than 9,500 class members submitted claims for recov-
ery, resulting in an estimated recovery of approximately $80 per
class member. No class member opted out. Only one class mem-
ber, Jenna Dickenson, objected to the settlement agreement.
Among other objections, she argued that the Supreme Court’s de-
cisions in Greenough and Pettus established binding precedent that
prohibited the district court from approving the agreed-upon in-
centive award to Mr. Johnson. The district court overruled the ob-
jections and approved the settlement, concluding that it was “in all
respects fundamentally fair, reasonable, adequate, and in the best
interest of the class members.”5 Doc. 53 at 4. Ms. Dickenson then
appealed.
5Although the district court did not include this calculation in its order, I note
that the incentive award of $6,000 to Mr. Johnson, divided by the approximate
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6 JILL PRYOR, J., Dissenting 18-12344
On appeal, the panel majority opinion reversed the incen-
tive award portion of the district court’s order approving the set-
tlement. Despite acknowledging that incentive awards were “com-
monplace” in modern class action litigation, the panel majority
opinion concluded that the district court lacked the power to ap-
prove the $6,000 award to Mr. Johnson in the settlement agree-
ment. Johnson, 975 F.3d at 1255–61. The panel majority opinion
agreed with Ms. Dickenson that Greenough and Pettus prohibit in-
centive awards included in class action settlement agreements. Id.
at 1260. According to the panel majority opinion, for class repre-
sentatives to receive incentive awards, either the Supreme Court
must overrule its decisions in Greenough and Pettus or else the
“Rules Committee or Congress” would need to “amend Rule 23 or
to provide for incentive awards by statute.” Id. at 1260.
II. DISCUSSION
The panel majority opinion misread Greenough and Pettus
to impose a categorical bar on incentive awards for class represent-
atives in class actions. Given the holding’s significance to the future
of class action litigation,6 I disagree with the decision of a majority
of my colleagues not to rehear this case en banc.
number of class members who submitted claims (9,500), would have
amounted to $0.63 per class member.
6 According to data from one prominent class action scholar, courts approved
incentive awards in 93.4% of consumer class actions between 2006 and 2011
and in 71.3% of all class actions during that same time period. 1 William B.
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18-12344 JILL PRYOR, J., Dissenting 7
To explain my disagreement, I begin with a description of
the Supreme Court’s decisions in Greenough and Pettus. I then ex-
plain how the panel majority opinion incorrectly interpreted these
cases to forbid all incentive awards. Next, I discuss how, in arriving
at the conclusion that these two nineteenth century cases were on-
point precedent, the majority opinion plucked Greenough and Pet-
tus out of their historical context and ignored several decades of
law developing incentive awards within class action settlements
under Rule 23, as well as Congress’s and the Supreme Court’s in-
action on such awards despite intermittent review. I conclude with
the real-world implications of the panel majority opinion’s holding.
A. Greenough and Pettus Were Products of and Limited to
Their Historical Circumstances, Which Pre-dated Rule 23
Class Actions.
The Supreme Court’s decisions in Greenough and Pettus ad-
dressed then-unanswered questions about litigation benefitting a
common fund before the Supreme Court and the Advisory Com-
mittee on Civil Rules created a new form of action and rules an-
swering those very questions. As I explain, the Supreme Court’s
decision in Greenough7 arose from the fact that, at the time, no
existing authority permitted a creditor-plaintiff who was
Rubenstein, Newberg and Rubenstein on Class Actions § 17:7 (6th ed., June
2022 update).
7As the panel majority opinion pointed out, “Pettus is significant principally
as a reiteration of the dichotomy drawn in Greenough.” Jones, 975 F.3d at
1257. Thus, I focus on Greenough.
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8 JILL PRYOR, J., Dissenting 18-12344
instrumental in preserving a common fund for the benefit of other
creditors to receive compensation from that fund after successfully
preserving it. So the Court had to rely on trust and equity principles
in defining what compensation was appropriate.
The plaintiff in Greenough was a bondholder who sought
attorneys’ fees and litigation expenses as well as fees for personal
services and travel expenses after suing to preserve assets securing
bonds owned by himself and others. Greenough, 105 U.S. at 530–
31. The state of Florida had conveyed several million acres of land
to a fund held in a trust as security for bonds issued by the Florida
Railroad Company. Id. at 528. The bonds’ returns depended on the
trustees’ management of the property held by the fund. Id. Francis
Vose, one of the bondholders, brought on behalf of himself and
other bondholders a lawsuit in equity against the trustees of the
fund. Id. He alleged that the trustees were selling the fund’s land at
discounted prices, which harmed the bondholders by diminishing
the value of the security for their bonds. Id. at 528–29. He sought
to set aside earlier land sales as fraudulent conveyances, to enjoin
the trustees from selling land in the future, and to appoint a re-
ceiver to manage the fund. Id. at 529.
Ultimately, after years of litigation, Vose was successful. Id.
A receiver was appointed, “a large amount of the trust fund was
secured and saved,” “a considerable amount of money” was real-
ized from the proper sale of the land, and the railroad made pay-
ments to Vose and other bondholders to make them whole. Id.
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18-12344 JILL PRYOR, J., Dissenting 9
After winning the case, Vose sought from the district court
an “an allowance out of the fund for his expenses and services.” Id.
A court-appointed special master recommended awarding him at-
torneys’ fees and fees for other “necessary expenditures,” such as
“sundry expenses” for “copying records and the like.” Id. at 530,
531. In addition, the special master recommended granting Vose
“an allowance of $2,500 a year for ten years” for his “peculiar and
great personal services,” along with nearly $10,000 in interest and
almost $15,000 for his hotel and transportation expenses incurred
while prosecuting the case. Id. The district court approved the spe-
cial master’s recommendations. Id. at 531.
On appeal, the Supreme Court affirmed some components
of Vose’s award but not others. The Court allowed Vose to retain
the money he received for “his reasonable costs, counsel fees,
charges, and expenses incurred in the fair prosecution of the suit,
and in reclaiming and rescuing the trust fund.” Id. at 537. Vose
could recover these expenses, the Court reasoned, because it was
“a general principle that a trust estate must bear the expenses of its
administration.” Id. at 532. Citing cases from state and English
courts, the Supreme Court concluded that “sufficient authority”
permitted compensating Vose for his actions to prevent the de-
struction of a trust. Id. at 532–34.
But the Supreme Court vacated Vose’s award for collateral
expenses—the payments amounting to a salary and the compensa-
tion for his railroad fares and hotel bills. Id. at 537–38. The Court
explained that the reasons for compensating Vose for his
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10 JILL PRYOR, J., Dissenting 18-12344
“expenditures incurred in carrying on the suit [did] not apply” to
the salary and private travel expenses Id. at 538. And the Court
could “find no authority whatever” that sanctioned awarding Vose,
a creditor of the fund, compensation for these collateral expenses.
Id. at 537–38.
It was this lack of authority that led the Supreme Court to
deny Vose compensation for his collateral expenses. By contrast,
the Supreme Court readily affirmed the award of his attorney’s fees
and litigation expenses because common law trust principles au-
thorized repayment for those expenses. But because the Court con-
cluded that trust principles did not guide it as to Vose’s compensa-
tion for collateral expenses, it would have had to craft a new rule
to address these items. In declining to create a rule that would al-
low creditors to receive the additional compensation Vose sought,
the Court reasoned that such awards would “present too great a
temptation to parties to intermeddle in the management of valua-
ble property or funds.” Id. at 538. Perhaps the Court’s concern was
born of the magnitude of the compensation Vose was awarded: a
personal salary for 10 years and lavish travel expenses, totaling
more than $1.4 million in today’s dollars.8
8 See Consumer Price Index, 1800-, Federal Reserve Bank of Minneapolis (last
visited July 27, 2022), https://www.minneapolisfed.org/about-us/monetary-
policy/inflation-calculator/consumer-price-index-1800- ($1 in 1881 dollars is
worth $28.07 in 2021 dollars based on the Consumer Price Index by Ethel D.
Hoover).
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18-12344 JILL PRYOR, J., Dissenting 11
The Court’s later decision in Central Railroad & Banking
Co. v. Pettus merely repeated this language from Greenough; it
added nothing to aid our interpretation of the earlier case. In Pet-
tus, the Court considered whether attorneys could present inde-
pendent claims for compensation from a fund created through
their efforts on behalf of their clients. See Pettus, 113 U.S. at 127–
28. The Supreme Court concluded that attorneys who recover a
common fund for the benefit of others are entitled to a reasonable
fee from the fund. Id. Pettus did not concern or address what a
plaintiff could recover.
Greenough can be summed up as follows: Although the
common law of trusts allowed Vose to be compensated for his ex-
penses in prosecuting the lawsuit against the funds’ trustees, at the
time no authority permitted him, a creditor, to receive compensa-
tion for collateral expenses connected to his litigation to preserve
the value of the bonds for the benefit of all bondholders. The Su-
preme Court declined to fashion a new common law rule that
would authorize this type of compensation due to its fear of credi-
tors running amok with litigation. Of course, Rule 23 class actions
as we know them today did not exist. Yet, the panel majority opin-
ion held that Greenough created a blanket ban on incentive awards
in class actions.9
9The panel majority opinion also failed to address that Greenough was based
on general federal common law. Greenough arose under Florida law. See
Vose v. Fla. R.R Co., 28 F. Cas. 1285 (C.C.N.D. Fla. 1870); Vose v. Internal
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12 JILL PRYOR, J., Dissenting 18-12344
B. The Panel Majority Opinion Failed to Consider the Histori-
cal Development of Incentive Awards Within Class Actions.
The panel majority opinion’s myopic focus on Greenough
and Pettus ignored the advent of Rule 23 and the development of
the modern class action that took place in the intervening 140 years
between those cases and this one. This history is important because
Improvement Fund, 28 F. Cas. 1286 (C.C.N.D. Fla. 1875). When the Supreme
Court issued its decision in Greenough, the regime of Swift v. Tyson, 41 U.S.
1 (1842), governed, and federal courts applied a general common law when
addressing state-law issues in diversity cases. To divine the general common
law in Greenough, the Supreme Court relied on both old English cases and
state court cases to determine what Vose could receive as compensation
which was the correct approach at the time. See Black & White Taxicab &
Transfer Co. v. Brown & Yellow Taxicab & Transfer Co., 276 U.S. 518, 533
(1928) (Holmes, J., dissenting) (“[Federal] common law . . . cite[s] cases from
[the Supreme] Court, from the Circuit Courts of Appeal, from the State
Courts, from England and the Colonies of England.”). But, in 1938, the Court’s
Erie decision renounced reliance on federal general common law, famously
recognizing that “[t]here is no federal general common law.” Erie R.R. Co. v.
Tompkins, 304 U.S. 64, 78 (1938). One additional reason to be wary of Green-
ough is that it created general common law to resolve what was a state-law
issue. Here the question of incentive payments is a federal question governed
solely by federal law. And with respect to federal law Greenough is “no longer
. . . legally authoritative because it was based on the federal courts’ subse-
quently abandoned authority to formulate common law principles in suits
arising under state law though litigated in federal court.” McKevitt v. Pallasch,
339 F.3d 530, 534 (7th Cir. 2003).
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18-12344 JILL PRYOR, J., Dissenting 13
incentive awards evolved within the framework of class actions un-
der Rule 23. I begin this section by providing a brief history of the
modern class action and the role of incentive awards within it. I
then explain how the panel majority’s decision disregards the vast
development of the legal landscape that occurred between Green-
ough and Johnson.
1. The Modern Class Action Emerged with the Creation
and Revision of Rule 23, and Incentive Awards Arose
and Developed in the Context of This Rule.
The development of Rule 23 of the Federal Rules of Civil
Procedure ushered in an entirely new regime for the federal courts’
treatment of collective actions.10 Before Rule 23, class actions did
not exist as we know them today but were merely “an outgrowth
of the compulsory joinder rule that prevailed in courts of equity.”
1 William B. Rubenstein, Newberg and Rubenstein on Class Ac-
tions § 1:13 (6th ed., June 2022 update) [hereinafter Newberg]. Un-
der equity’s regime, the Supreme Court tried during the nineteenth
century to deal with “group representative litigation” through Eq-
uity Rule 48. 1 Joseph M. McLaughlin, McLaughlin on Class
10 I use “collective actions” to refer generally to actions brought by a repre-
sentative plaintiff or plaintiffs who makes claims on behalf of other similarly-
situated individuals against the same defendant or defendants, rather than spe-
cifically to the mechanism provided to employees under the Fair Labor Stand-
ards Act. See 29 U.S.C. § 216(b) (“An action to recover . . . may be maintained
against any employer . . . by any one or more employees for and in behalf of
himself or themselves and other employees similarly situated.”).
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14 JILL PRYOR, J., Dissenting 18-12344
Actions § 1:1 (18th ed., Oct. 2021 update) [hereinafter McLaughlin]
(internal quotation marks omitted). But this rule had the significant
limitation of lacking binding effect: any decree submitted under it
would “be without prejudice to the rights and claims of all the ab-
sent parties.” Id. (internal quotation marks omitted). After the mer-
ger of law and equity, the Supreme Court promulgated the original
Rule 23 in 1938. Newberg § 1:14. The rule suffered from several
deficiencies, however. It divided class actions into three difficult-to-
apply categories.11 McLaughlin § 1:1. And it failed to prescribe how
class action suits advance through litigation. Newberg § 1:14. “Un-
der heavy criticism, [the original rule] was completely rewritten,
and sweeping innovations were introduced with the 1966 amend-
ments.” Id.
11The original Rule 23 categorized class suits based on the “‘jural relations’ of
the parties.” Newberg § 1:14. The rule authorized a representative suit where
the right to enforcement was:
(1) joint, or common, or secondary in the sense that the owner
of a primary right refuses to enforce that right and a member
of the class thereby becomes entitled to enforce it;
(2) several, and the object of the action is the adjudication of
claims which do or may affect specific property involved in the
action; or
(3) several, and there is a common question of law or fact af-
fecting the several rights and a common relief is sought.
Id.
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18-12344 JILL PRYOR, J., Dissenting 15
The modern class action emerged with the implementation
of the 1966 amendments. McLaughlin § 1:1. With the new Rule 23,
the Advisory Committee on Civil Rules hoped to “correct technical
flaws” with the original Rule 23’s difficult-to-apply categories “and
bring [the] badly shopworn procedural rule in line with caselaw de-
velopments.” David Marcus, The History of the Modern Class Ac-
tion, Part I: Sturm Und Drang, 1953–1980, 90 Wash. U. L. Rev. 587,
599 (2013). Alongside this more modest goal, a major purpose of
the new rule was to “provide a method of protecting the rights of
those who would not realistically bring individual claims for prac-
tical reasons.”12 McLaughlin § 1:1. This goal was in accord with a
belief that the new Rule 23 should not “freez[e] out the claims of
people” especially disadvantaged people with small value claims.
Benjamin Kaplan, Continuing Work of the Civil Committee: 1966
Amendments of the Federal Rules of Civil Procedure, 81 Harv. L.
Rev. 356, 398 (1967).
Not long after the new Rule 23’s implementation, federal
courts began to recognize that under the Rule class representatives
could receive benefits—beyond what the class received—for their
efforts in bringing and maintaining lawsuits to vindicate not only
their own rights but the rights of other class members. See, e.g.,
12For example, the Advisory Committee envisioned the new rule as a tool
“which could deal with civil rights and, explicitly, segregation.” John P. Frank,
Response to 1996 Circulation of Proposed Rule 23 on Class Actions, in 2 Work-
ing Papers of the Advisory Committee on Civil Rules on Proposed Amend-
ments to Civil Rule 23 at 266 (1997), https://perma.cc/9SJW-KMXK.
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16 JILL PRYOR, J., Dissenting 18-12344
Bryan v. Pittsburgh Plate Glass Co. (PPG Indus., Inc.), 59 F.R.D.
616, 617 (W.D. Pa. June 12, 1973) (approving “special awards in the
aggregate amount of $17,500 to those members of the plaintiff class
who were most active in the prosecution of this case and who de-
voted substantial time and expense on behalf of the class.”), aff’d,
494 F.2d 799 (3d Cir. 1974); Lo Re v. Chase Manhattan Corp., No.
76 Civ. 154, 1979 WL 236, at *6 (S.D.N.Y. May 25, 1979) (approving
award for class representatives because they, among other things,
“initiated this action at some risk to their own job security.”). In
1974, the Sixth Circuit became the first circuit to examine the pro-
priety of awarding additional benefits to plaintiffs for their time and
effort in pursuing litigation that benefited other plaintiffs in the
class. Thornton v. East Texas Motor Freight, 497 F.2d 416, 420 (6th
Cir. 1974). In that case, the district court held that a motor freight
company violated Title VII by employing a discriminatory transfer
policy that prevented Black drivers from accessing certain jobs. Id.
at 419. The district court ordered the company to rescind its trans-
fer policy and awarded the Black drivers “who actively sought an
end” to the policy with extended seniority in the positions previ-
ously foreclosed to them. Id. at 420. The Sixth Circuit affirmed, ex-
plaining that “there is something to be said for rewarding those
drivers who protest and help to bring rights to a group of employ-
ees who have been the victims of discrimination.” Id.During the 1980s and 1990s, incentive awards proliferated.
See Re Continental/Midlantic S’holders Litig., Civ. A. No. 86–
6872, 1987 WL 16678, at *4 (E.D. Pa. Sept. 1, 1987) (“Plaintiffs’
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18-12344 JILL PRYOR, J., Dissenting 17
counsel have provided numerous citations in this district, in this
circuit and elsewhere, in which substantial incentive payments to
named plaintiffs . . . have been made.”); In re Dun & Bradstreet
Credit Servs. Customer Litig, 130 F.R.D. 366, 373–74 (S.D. Ohio
Feb. 23, 1990) (collecting cases). “By the turn of the century,” in-
centive awards were commonplace. Theodore Eisenberg & Geof-
frey P. Miller, Incentive Awards to Class Action Plaintiffs: An Em-
pirical Study, 53 UCLA L. Rev. 1303, 1311 (2006).
Despite the widespread acceptance of incentive awards, al-
most since their inception, courts have worried that they might be
unfair to the other class members. See, e.g., Plummer v. Chem.
Bank, 91 F.R.D. 434, 442 (S.D.N.Y. 1981) (“While there may be cir-
cumstances in which additional benefits to the named plaintiffs
may be justified, such disparities must be regarded as prima facie
evidence that the settlement is unfair to the class.”); Women’s
Comm. for Equal Emp. Opportunity v. Nat’l Broad. Co., 76 F.R.D.
173, 181 (S.D.N.Y. 1977) (approving settlement with incentive
awards “notwithstanding our doubts about a general policy of
awarding class representatives a settlement on terms different from
the other class members”). To address this concern, courts devel-
oped tests “to identify the appropriate conditions” for granting in-
centive awards. Eisenberg & Miller, supra, at 1311. Under this re-
gime, a party seeking an incentive award for the class representa-
tive has the “burden of proving” that the class representative
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18 JILL PRYOR, J., Dissenting 18-12344
“deserve[s] an award” and that it is “reasonable” before a court can
approve it.13 Newberg § 17:13.
Our own circuit’s law tracks our sister circuits’ development
of safeguards around incentive awards. In Holmes v. Continental
Can Co., we recognized that “[w]hen a settlement explicitly pro-
vides for preferential treatment for the named plaintiffs in a class
action, a substantial burden falls upon the proponents of the settle-
ment to demonstrate and document its fairness.” Holmes v. Cont’l
Can Co., 706 F.2d 1144, 1147 (11th Cir. 1983). The panel majority
opinion brushed aside Holmes as having nothing to do with incen-
tive awards. Johnson, 975 F.3d at 1261 n.13. Although Holmes does
not mention incentive awards specifically, that fact does not render
it irrelevant as a bulwark against potential incentive award abuses.
An incentive award creates an unequal settlement distribution be-
tween the class representatives and the other class members, thus
triggering Holmes’s requirement that the proponents of the settle-
ment demonstrate its fairness.
As this history shows, federal courts have had decades to ex-
amine Rule 23’s authorization of incentive awards in class action
settlements, to evaluate these awards’ costs and benefits, and to de-
velop safeguards to prevent them from resulting in unfair
13 To decide whether this burden has been met, courts look at a variety of
factors including the class representatives’ specific services to the class, any
potential risks they incurred, and the amount of the incentive award in com-
parison to the overall recovery. See Newberg § 17:13 n.7 (collecting tests used
by different circuits for approving incentive awards).
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18-12344 JILL PRYOR, J., Dissenting 19
settlements. Yet I cannot find a single case before this one in which
a court concluded that Greenough precludes their approval under
Rule 23.
The silence concerning Greenough’s impact on incentive
awards extends to the United States Supreme Court, as Judge Mar-
tin observed in her dissent to the panel majority opinion. In Frank
v. Gaos, 139 S. Ct. 1041, 1043 (2019), the Supreme Court consid-
ered whether a settlement agreement that would distribute several
million dollars among the named plaintiffs, class counsel, and cy
pres recipients14 satisfied Rule 23. The settlement agreement in-
cluded “incentive payments” for the named plaintiffs. Id. at 1045.
The Supreme Court majority remanded the case based on stand-
ing, so it had no reason to address the incentive awards. Id. at 1046.
Justice Thomas wrote in dissent that the Court should address the
merits and conclude that the settlement agreement did not comply
with Rule 23. Id. at 1046–1049 (Thomas, J., dissenting). He criti-
cized the settlement agreement because of the cy pres and incen-
tive payments. Id. at 1047. He explained that the incentive pay-
ments for the named plaintiffs and the lack of monetary relief for
the other class members “strongly suggest[ed] that the interests of
the class were not adequately represented.” Id. Granted, it appears
that no party raised the Greenough argument in Frank, but the
14In class actions, “cy pres refers to the practice of distributing settlement
funds not amenable to individual claims or meaningful pro rata distribution to
nonprofit organizations whose work is determined to indirectly benefit class
members.” Frank v. Gaos, 139 S. Ct. 1041, 1045 (2019).
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20 JILL PRYOR, J., Dissenting 18-12344
argument was not unknown because it had been raised previously
in Chieftain Royalty Co. v. Enervest Energy Institutional Fund
XIII-A, L.P., 888 F.3d 455, 466–67 (10th Cir. 2017).15 Like Judge
Martin, I find it notable that Justice Thomas’s analysis focused
solely on Rule 23; he did not mention Greenough or Pettus. Nor
did he suggest that incentive awards are illegal per se. Instead, his
dissent simply noted that a settlement in which only class repre-
sentatives receive monetary awards may fail to comply with Rule
23.
Indeed, a year before Frank, the Supreme Court acknowl-
edged that a class representative “might receive a share of class re-
covery above and beyond her individual claim.” China Agritech,
Inc. v. Resh, 138 S. Ct. 1800, 1811 n.7 (2018) (citing Cook v. Niedert,
142 F.3d 1004, 1016 (7th Cir. 1998) (affirming a class representa-
tive’s $25,000 incentive award)). The panel majority opinion dis-
missed the Supreme Court’s reference to incentive awards as dicta,
noting that the Court “didn’t cite or consider—let alone over-
rule—Greenough and Pettus.” Johnson, 975 F.3d at 1260 n.12.
True, but I suggest that the Supreme Court did not mention Green-
ough and Pettus because those cases have nothing to say about the
lawfulness of incentive awards in settlements under Rule 23.
Congress and the Advisory Committee on Civil Rules, too,
have been aware of the rise of incentive awards for decades, yet
15The Tenth Circuit treated the argument as forfeited below, however, and
did not decide it.
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18-12344 JILL PRYOR, J., Dissenting 21
they have never acted to impose a blanket ban on such awards.
This silence stands in stark contrast to the Private Securities Litiga-
tion Reform Act of 1995 (“PSLRA”), in which Congress prohibited
incentive awards or special payments for class representatives in
securities class action settlements. See 15 U.S.C. § 78u-4(a)(2)(A)
(requiring each plaintiff who seeks to serve as class representative
to provide a sworn certification stating that she “will not accept any
payment for serving as a representative party on behalf of a class
beyond the plaintiff’s pro rata share of any recovery”); see id. § 78u-
4(a)(4) (“The share of any final judgment or of any settlement that
is awarded to a representative party serving on behalf of a class shall
be equal, on a per share basis, to the portion of the final judgment
or settlement awarded to all other members of the class.”).16 From
the PSLRA, we can see that Congress knows how to ban class rep-
resentative incentive awards when it wants to do so. Yet Congress
has not acted to ban inventive awards in any other class action con-
text. And this is so despite its observation in the Class Action Fair-
ness Act (“CAFA”) that “[c]lass members often receive little or no
benefit from class actions, and are sometimes harmed, such as
where . . . unjustified awards are made to certain plaintiffs at the
expense of other class members.” Class Action Fairness Act of 2005,
Pub. L. No. 109-2, § 2, 119 Stat. 4 (2005). Congress’s inaction to-
ward incentive awards in most class action contexts suggests that it
16 But see Newberg § 17:19 (“Most, though not all, courts have read these pro-
visions as barring incentive awards.”) (emphasis added).
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22 JILL PRYOR, J., Dissenting 18-12344
does not view these awards as illegal or even as the type of “unjus-
tified awards” identified in the CAFA. Id.
As for the Advisory Committee, at its request in 1996, the
Federal Judicial Center collected and analyzed empirical data on
incentive awards. See Thomas E. Willging, et al., An Empirical
Analysis of Rule 23 To Address the Rulemaking Challenges, 71
N.Y.U. L. Rev. 74, 101 (1996). After receiving the Federal Judicial
Center’s report demonstrating the prevalence and scope of these
awards, tellingly, the Advisory Committee took no action to limit
them.
As I have shown, incentive awards grew out of the 1966 re-
vised version of Rule 23 under the watchful eyes of the courts, the
Advisory Committee, and Congress. I now turn to why the panel
majority opinion’s failure to account for the historical develop-
ment of incentive awards led to its erroneous holding.
2. The Panel Majority Opinion Misapplied Greenough
to a Context Completely Changed by Rule 23.
The panel majority opinion deemed the compensation Vose
sought in Greenough “roughly analogous” to incentive awards in
class action settlement agreements. Johnson, 975 F.3d at 1257. This
rough analogy crumbles upon closer inspection. As I have ex-
plained, the Greenough court concluded that there existed no gen-
eral federal common law authorizing compensation for the type of
collateral expenses Vose sought to recover. In Greenough the
Court was not examining a class action settlement and obviously
could not rely on the revised Rule 23, which would not exist for
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18-12344 JILL PRYOR, J., Dissenting 23
another 85 years. And so, of course, Greenough is silent as to
whether Rule 23 allows a court to approve an incentive award.
Despite recognizing that the Greenough Court rejected
Vose’s requested compensation because the district court was
“without legal basis” to approve the award from a common fund,
Johnson, 975 F.3d at 1257, the panel majority opinion nonetheless
leapt to the conclusion that Greenough broadly forbids any incen-
tive award in the class action context. The panel majority opinion
also failed to wrestle with the fact that Vose sought more than 1.4
million in today’s dollars, which exceeds by orders of magnitude
both the $6,000 incentive award in this case and average incentive
awards in class action settlements.17 By plucking Greenough out of
its context and disregarding the development of class actions to
conclude that Greenough dictates the outcome in this case, the
panel ignored the wisdom of Chief Justice Marshall (which the Su-
preme Court has continually invoked) “that ‘general expressions,
in every opinion, are to be . . . respected, but ought not . . . control
the judgment in a subsequent suit.’” Ark. Game & Fish Comm’n v.
United States, 568 U.S. 23, 35 (2012) (quoting Cohens v. Virginia,
19 U.S. 264, 399 (1821)); see also Georgia v. Public.Resource.Org,
Inc., 140 S. Ct. 1498, 1518 n.2 (2020) (Thomas, J., dissenting) (“The
proper approach is to ‘read general language in judicial opinions . .
17An empirical study reviewed approximately 1,200 class actions from 2006–
2011 and reported that the average incentive award per class representative
was $11,697 (or $14,371 in 2021 dollars). Newberg § 17:8.
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24 JILL PRYOR, J., Dissenting 18-12344
. as referring in context to circumstances similar to the circum-
stances then before the Court and not referring to quite different
circumstances that the Court was not then considering.’”) (quoting
Illinois v. Lidster, 540 U.S. 419, 424 (2004)).
The panel majority opinion paid scant attention to Rule 23,
noting that the rule does not explicitly mention incentive awards.
Johnson, 975 F.3d at 1257. But the opinion failed to engage with
Rule 23(e)(2)(D)’s requirement that in approving proposed settle-
ment agreements courts must evaluate whether the agreement
“treats class members equitably relative to each other.” Fed. R. Civ.
P. 23(e)(2)(D). Incentive awards are subject to this requirement,
which addresses one of the primary objections that has been levied
against incentive awards. See Newberg § 17:4 (“[Rule 23(e)] most
obviously protects absent class members from being subjected to
excessive incentive awards[.]”). The Supreme Court in Greenough
worried that Vose’s award for collateral expenses—which, of
course, the district court did not review under Rule 23(e)—would
present too great a temptation for intermeddling in lawsuits. The
panel majority opinion argues that those concerns are present in
the class action context as well. But the panel majority’s worries
about whether incentive awards are good policy does little to
strengthen its legal argument about the scope and breadth of
Greenough’s holding. And, again, this argument represents a mis-
taken attempt to apply Greenough to a context irrevocably altered
by Rule 23. Rule 23 defuses the potential for parties to intermeddle
because under Rule 23(e) courts must reject incentive awards that
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18-12344 JILL PRYOR, J., Dissenting 25
are excessive compared to the service provided by the class repre-
sentative or that are unfair to the absent class members. See In re
Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 945–46 (9th
Cir. 2011) (“[B]ecause the parties expressly negotiated a possibly
unreasonable amount of fees, and because the district court did not
take this possibility into account in reviewing the settlement’s fair-
ness the first time around, we must vacate and remand the Ap-
proval Order as well, so that the court may appropriately factor this
into its Rule 23(e) analysis.”).
It could equally well be argued that had Congress or the Ad-
visory Committee wanted to disallow any award that treats class
members inequitably relative to one another, they could have done
so, as Congress effectively did in the PSLRA. So, the lack of an ex-
press reference to incentive awards in Rule 23 does not help the
panel majority’s argument.
More likely, the reason incentive awards have not been dis-
allowed is that a class representative’s responsibilities are often
time-consuming and burdensome. See Amicus Br. of Impact Fund
at 5–8. A class representative’s activities may also expose her to rep-
utational risk and even financial, emotional, and physical harm. Id.at 8–12. Indeed, the leading treatise on class actions observes that
“if the class representatives face particular risks in serving the class
and/or undertake valuable work on behalf of the class but cannot
recover any of the costs of those efforts through an incentive
award, they have a fair argument [under Rule 23(e)(2)(D)] that the
settlement is not treating them equitably relative to absent class
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26 JILL PRYOR, J., Dissenting 18-12344
members.” Newberg § 17:4 (emphasis in original). The panel ma-
jority opinion failed to acknowledge, much less grapple with, its
inconsistency with the rule.
To sum up, the panel majority opinion disregarded that in
between Greenough and Johnson, the modern class action was cre-
ated, developed, studied, and tweaked. The panel majority opinion
did not satisfactorily explain how Greenough can be read as barring
courts from approving incentive awards under Rule 23. It also did
not address the inconsistencies its holding creates with Rule 23’s
requirements that all class members be treated equitably.
C. The Panel Majority Opinion Is in Tension with Decisions
of All Other Circuits and Has Severe Implications on Class
Action Viability.
The panel majority opinion not only misread Greenough
and Pettus, it also created a split among circuits by distinguishing
ours as the only circuit to read these cases as barring incentive
awards for class action representatives. The Second Circuit ex-
pressly considered and rejected the argument that Greenough and
Pettus forbid incentive awards. Melito v. Experian Mktg. Sols., Inc.,
923 F.3d 85, 96 (2d Cir. 2019). And all circuits—including ours18—
18 See Carter v. Forjas Taurus, S.A., 701 F. App’x 759, 763 (11th Cir. 2017) (un-
published) (affirming the district court’s approval of a settlement that included
a $15,000 incentive award for the class representative); Nelson v. Mead John-
son & Johnson Co., 484 F. App’x 429, 432 (11th Cir. 2012) (unpublished) (af-
firming the district court’s approval of a settlement where one named plaintiff
received a $10,000 incentive award, four named plaintiffs each received $2,500
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18-12344 JILL PRYOR, J., Dissenting 27
have universally accepted—and affirmed district courts’ approval
of—settlement agreements incorporating these awards. See, e.g.,
Jones v. Singing River Health Servs. Found., 865 F.3d 285, 296 (5th
Cir. 2017) (vacating a class action settlement with an incentive
award on other grounds and affirming the same settlement after
district court provided further explanation in 742 F. App’x 846 (5th
Cir. 2018)); Caligiuri v. Symantec Corp., 855 F.3d 860, 861 (8th Cir.
2017); Pelzer v. Vassalle, 655 F. App’x 352, 360 (6th Cir. 2016) (un-
published); Bezdek v. Vibram USA, Inc., 809 F.3d 78, 82 (1st Cir.
2015); Tennille v. W. Union Co., 785 F.3d 422, 434–36 (10th Cir.
2015); Berry v. Schulman, 807 F.3d 600, 613–14 (4th Cir. 2015); Co-
bell v. Salazar, 679 F.3d 909, 922–23 (D.C. Cir. 2012); Sullivan v. DB
Invs., Inc., 667 F.3d 273, 290 (3d Cir. 2011) (en banc); In re
Synthroid Mktg. Litig., 264 F.3d 712, 722–23 (7th Cir. 2001); In re
Mego Fin. Corp. Sec. Lit., 213 F.3d 454, 463 (9th Cir. 2000). Alt-
hough courts infrequently question incentive awards based on sus-
picion of collusion or unfairness, there is “near-universal recogni-
tion that it is appropriate for the court to approve an incentive
award payable from the class recovery, usually within the range of
$1,000–$20,000.” McLaughlin § 6:28. The panel majority opinion
brushed aside this near-universal acceptance of incentive awards as
“a product of inertia and inattention, not adherence to law.” John-
son, 975 F.3d at 1259. I find it difficult to believe that for decades
incentive awards, and the remaining named plaintiffs each received $1,000 in-
centive awards).
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28 JILL PRYOR, J., Dissenting 18-12344
we and all our sister circuits have missed what the panel majority
saw as a bright line drawn by the Supreme Court.
The circuit split created by the panel majority opinion does
not just make good fodder for law review articles; it has very real-
world implications. In line with the Advisory Committee’s goals in
1966, courts have recognized that Rule 23 allows plaintiffs in class
actions “to pool claims which would be uneconomical to litigate
individually.” Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 809
(1985). In our circuit, we have repeatedly acknowledged this core
purpose of class action. See Rutstein v. Avis Rent-A-Car Sys., Inc.,
211 F.3d 1228, 1240 n.21 (11th Cir. 2000) (recognizing that the
“most compelling justification for a Rule 23(b)(3) class action [is]
the possibility of negative value suits”); In re Charter Co., 876 F.2d
866, 871 (11th Cir. 1989) (“[T]he effort and cost of investigating and
initiating a claim may be greater than many claimants’ individual
stake in the outcome, discouraging the prosecution of these claims
absent a class action filing procedure.”). Our outlier rule, however,
potentially undermines this purpose in our circuit and threatens
the viability of consumer class actions in particular.19 See Eisenberg
19 Johnson has already begun to impact settlement agreements in consumer
class actions. Bound to follow it, a panel of this Court has reversed an incentive
award in a settlement of a class action asserting violations of the Fair Credit
Reporting Act. In re Equifax Inc. Customer Data Sec. Breach Litig., 999 F.3d
1247, 1257 (11th Cir. 2021). Post-Johnson, district courts have denied incentive
awards in settlements of class actions brought under the Fair Debt Collection
Practices Act, the Fair Labor Standards Act, the Telephone Consumer Protec-
tion Act, and state consumer protection laws. See Kuhr v. Mayo Clinic
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18-12344 JILL PRYOR, J., Dissenting 29
& Miller, supra, at 1305–06 (2006) (noting that in consumer class
actions “a class member may even experience a net loss from acting
as class champion because the small recoveries . . . are not enough
to cover the increased costs of serving as the named plaintiff”).
In consumer class actions especially, “damages per class
member tend to be slight.” Espenscheid v. DirectSat USA, LLC, 688
F.3d 872, 876 (7th Cir. 2012). Yet a class representative may spend
hundreds of hours providing essential services for the litigation. See
Amicus Br. of The Committee to Support the Antitrust Laws at 6–
8. Without the “prospect of an incentive award,” potential class
representatives understandably may be reluctant to take on these
responsibilities.20 Espenscheid, 688 F.3d at 876. The public will be
Jacksonville, 530 F. Supp. 3d 1102, 1108 n.1 (M.D. Fla. 2021) (Fair Debt Collec-
tion Practices Act); Poblano v. Russell Cellular Inc., 543 F. Supp. 3d 1293, 1294
(M.D. Fla. 2021) (Fair Labor Standards Act); Drazen v. GoDaddy.com, LLC,
No. 1:19-00563-KD-B, 2020 WL 8254868, at *1, 14 (S.D. Ala. Dec. 23, 2020)
(Telephone Consumer Protection Act); Fruitstone v. Spartan Race, Inc., No.
20-cv-20836, 2021 WL 2012362, at *1, 13 (S.D. Fla. May 20, 2021) (Florida De-
ceptive and Unfair Trade Practices Act).
20 The majority opinion is wrong to characterize incentive awards as “bounty”
and “promot[ing] litigation by providing a prize to be won.” Johnson, 975 F.3d
at 1258. It is true that the prospect of an incentive award might encourage
plaintiffs to serve as class representatives, but the award’s purpose is to enable
suits against defendants who cause widespread harms that are of low dollar
value to individual plaintiffs, not to promote unnecessary or frivolous litiga-
tion. And, as I explained, if an incentive award is so large as to be unfair or
compromise the interest of the class, the court reviewing the settlement agree-
ment must reject it under Rule 23(e).
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30 JILL PRYOR, J., Dissenting 18-12344
the ultimate loser from this undermining of class actions as an im-
portant tool for protecting consumers. See Jason Jarvis, A New Ap-
proach to Plaintiff Incentive Fees in Class Action Lawsuits, 115 Nw.
U. L. Rev. 919, 928 (2020) (“[A]bsent an incentive fee, a multimil-
lion-dollar consumer class action case might not be brought for
want of a named plaintiff. Therefore, when individual recoveries
are small, incentive fees provide a necessary enforcement mecha-
nism for consumer-protection statutes.”); Carnegie v. Household
Int’l, Inc., 376 F.3d 656, 661 (7th Cir. 2004) (“The realistic alterna-
tive to a class action is not 17 million individual suits, but zero in-
dividual suits, as only a lunatic or a fanatic sues for $30.”) (emphasis
in original).
The effects of Johnson will be felt by small businesses, too.
Class actions are an important tool for small businesses to combat
anticompetitive business practices. See Amicus Br. of Main Street
Alliance at 5–6. As one scholar has written, class actions are “the
most effective way to hold corporations accountable” and ensure
trust in the free market by disincentivizing theft, breach of con-
tract, and fraud. Brian T. Fitzpatrick, The Conservative Case for
Class Actions 3, 22–28 (2019). Despite these benefits of business
class actions, the small businesses that serve as class representatives
face daunting challenges. A small-business class representative
must devote significant time to the litigation which otherwise
could be devoted to running the business. See, e.g., Bradburn Par-
ent Teacher Store, Inc. v. 3M (Minn. Mining & Mfg. Co.), 513 F.
Supp. 2d 322, 342 (E.D. Pa. 2007) (approving incentive award
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18-12344 JILL PRYOR, J., Dissenting 31
because class-representative small business devoted four years to
the litigation, including providing and preparing a representative
for nine depositions); In re Navistar Maxxforce Engines Mktg.,
Sales Pracs. & Prods. Liab. Litig., No. 1:14-cv-10318, 2020 WL
2477955, at *4 (N.D. Ill. Jan. 21, 2020) (approving incentive awards
to class-representative businesses because they sat for depositions,
searched through thousands of documents to respond to discovery,
and presented their defective equipment for inspection). In addi-
tion, small-business class representatives may face retaliation and
reputational harm, especially in the antitrust context. See Amicus
Br. of The Committee to Support the Antitrust Laws at 4–6. The
panel majority’s holding extinguished one way to assure small busi-
ness owners that their businesses will not wind up worse off for
attempting to vindicate their own and other small businesses’
rights.
The panel majority’s reading of Greenough—which applied
federal common law and equitable principles in the absence of any
authority like Rule 23—as banning incentive awards placed this cir-
cuit at odds with more than 50 years of class action law and deci-
sions from every other federal court in the country. And this is not
some esoteric disagreement. The opinion has already begun to
eliminate incentive awards, and although it is too early to measure,
I expect that it will have a very real and detrimental impact on class
actions in this circuit, an impact that will be felt not least by the
most vulnerable plaintiffs such as consumers and small businesses.
See In re Synthroid Mktg. Litig., 264 F.3d 712, 723 (7th Cir. 2001)
USCA11 Case: 18-12344 Date Filed: 08/03/2022 Page: 36 of 36
32 JILL PRYOR, J., Dissenting 18-12344
(recognizing that the “lure of an ‘incentive award’” can cause a
named plaintiff to initiate suit when she would not have other-
wise).
III. CONCLUSION
The panel majority opinion fundamentally undermined
class action law based on a misinterpretation of two Supreme
Court cases that long preceded the creation of the modern class
action. No other circuit has gone down this path. Given the panel
majority opinion’s novel reading of these cases, the circuit split it
occasioned, and the magnitude of its likely impact, this case is more
than worthy of en banc review. Unfortunately, by denying rehear-
ing en banc, our court has struck a lasting blow to class actions as a
device for righting wrongs in this circuit.
Given our failure to act, it will be up to the Supreme Court
to overrule or clarify Greenough and Pettus to undo this problem
of our making. If the Supreme Court does not act, then I urge ei-
ther the Advisory Committee on Civil Rules to amend Rule 23 or
Congress to enact a statute that explicitly authorizes incentive
awards. See Johnson, 975 F.3d at 1260. Respectfully, I dissent from
the denial of rehearing en banc.