Radcliffe v. Experian Info. Solutions, No. 11-56376 (9th Cir. 2013)
Annotate this CaseThis case stemmed from plaintiffs' allegations that defendants issued consumer credit reports with negative entries for debts already discharged in bankruptcy. On appeal, plaintiffs and objectors challenged the district court's approval of a class-action settlement that granted incentive awards to the class representatives for their services to the class. The settlement agreement conditioned payment of incentive awards on the class representatives' support for the settlement. These conditional incentive awards caused the interests of the class representatives to diverge from the interests of the class because the settlement agreement told class representatives that they would not receive incentive awards unless they supported the settlement. Moreover, the conditional incentive awards significantly exceeded in amount what absent class members could expect to get upon settlement approval. Because these circumstances created a patent divergence of interests between the named representatives and the class, the court concluded that the class representatives and class counsel did not adequately represent the absent class members. Therefore, the court reversed the district court's approval of the settlement.
Court Description: Class Action Settlement. The panel reversed the district court’s approval of the settlement of a class action against credit reporting agencies under the Fair Credit Reporting Act because the class representatives and class counsel did not adequately represent absent class members. The panel concluded that the settlement agreement created a divergence of interests between the named representatives and the class where incentive awards were conditioned on the class representatives’ support for the settlement and significantly exceeded in amount what absent class members could expect to get upon settlement approval. Concurring, District Judge Haddon joined in Judge Gould’s opinion but would disqualify class counsel from participation in any fee award ultimately approved by the district court upon resolution of the case on the merits.
The court issued a subsequent related opinion or order on May 2, 2013.
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