Last month, this blog covered the Eleventh Circuit’s denial of a petition to rehear Johnson v. NPAS Solutions, LLC, a decision that held that class action incentive awards are per se unlawful. See 2022 WL 3083717 (11th Cir. Aug. 3, 2022). That denial left the Eleventh Circuit as the only circuit where class action incentive awards can never be included in settlements under any circumstances. Now, the Department of Justice has relied on the Eleventh Circuit’s decision in Johnson to try to block class action incentive awards in a class action settlement with the federal government.
In In re: U.S. Office of Personnel Management Data Security Breach Litigation, DOJ recently settled a class action lawsuit arising out of a data breach at the Office of Personnel Management. While DOJ agreed to settle the case and pay attorneys’ fees, the DOJ noted in its response to the plaintiffs’ motion for attorneys’ fees, costs, and service awards that it would not agree to the “request for incentive awards” for the named plaintiffs. See In re: U.S. Office of Personnel Mgmt. Data Security Breach Litig., No. 1:15-mc-01394 (D.D.C.), ECF No. 201 at 1. In doing so, DOJ cited Johnson, noting that Johnson held that incentive awards are akin “to a salary and a bounty” and are categorically unavailable. Id. at 7–8 (citing Johnson v. NPAS Solutions, LLC, 975 F.3d 1244, 1255–62 (11th Cir. 2020)).
Although DOJ did not go so far as to say that Johnson was correctly decided and incentive awards should be per se unlawful, DOJ’s filing does appear to express skepticism regarding the propriety of these awards, and DOJ could be signaling that it will oppose these awards going forward. Given the circuit split Johnson created over these awards, it seems likely that the Supreme Court will be asked to resolve the issue.