On September 18, 2020, we wrote an article discussing how the United States Court of Appeals for the Eleventh Circuit in Johnson v. NPAS Solutions, LLC, No. 18-12344 (11th Cir. 2020) held that class action incentive payments were improper because “incentive award[s] constitute[] a salary, a bounty, or both[.]”
While the Eleventh Circuit mulls on whether to review this issue en banc, on January 14, 2020, the United States Court of Appeals for the Sixth Circuit weighed in on the issue further deepening the circuit split if the Eleventh Circuit does not reverse course.
In Shane Group, Inc. v. Blue Cross Blue Shield of Michigan, 2021 WL 129067, the per curiam panel of Judges Siler, Cook, and Kethledge held that the argument that “so-called ‘service awards’ to certain named plaintiffs amounted to a bounty” was meritless. Specifically, the Court noted “[o]n this record . . . those payments correlate to the substantial amount of time that the named plaintiffs actually spent producing documents, and otherwise advancing the litigation of the case.”
This decision in Shane Group is directly contrary to the Johnson decision in the Eleventh Circuit. Curiously, the parties in Johnson filed a petition for rehearing en banc on October 22, 2020, but there has been no decision on the petition thus far (other than the Chief Judge withholding issuance of the mandate). Over twenty entities filed amicus briefs in favor of a rehearing en banc. Was the full Eleventh Circuit waiting on the result in Shane Group before deciding whether to grant rehearing en banc? If rehearing en banc is not granted in Johnson, could we have the U.S. Supreme Court weighing in on this circuit split next term? Only time will tell.
As we previously stated, litigants of class actions should continue to follow these developments closely going forward as it could have far-reaching effects on class action settlements.