The First Circuit recently vacated and remanded a district court’s approval of a proposed class action settlement “because the absence of separate settlement counsel for distinct groups of class members makes it too difficult to determine whether the settlement treated class members equitably.” Murray v. Grocery Deliver E-Servs. USA Inc., — F.4th —, 2022 WL 17729630, at *1 (1st Cir. Dec. 16, 2022). At the same time, the First Circuit declined to follow the Eleventh Circuit’s recent decision banning incentive awards to class representatives.

On October 15, 2021, a district court approved a class action settlement resolving plaintiffs’ claims that defendant HelloFresh violated the Telephone Consumer Protection Act in three different ways. On appeal, an objector argued that the settlement was defective because class members with one type of claim had stronger and more valuable claims than members with the two other claims, so it was inadequate for class members with different claims to be represented by the same counsel during settlement negotiations.

The First Circuit agreed. Because the same counsel represented different groups of plaintiffs whose claims involved “significantly different elements” and faced “very different defenses,” the First Circuit found that the “district court lacked the requisite basis for certifying the settlement class and approving the allocation of the $14 million among class members as fair, reasonable, and adequate.” Id. at *8. The Court explained that if the same counsel represents groups of plaintiffs “with significantly different claims in the context of allocating a lump-sum settlement,” then the district court “lacks structural assurance that the settlement treats each group fairly.” Id. at *4. In Murray, for instance, the class members’ three TCPA claims involved different elements and defenses that were “too significant to leave the equitable apportionment of a common fund to a court’s discretion” without the procedural safeguard of an “arm’s-length negotiation between separately represented groups” to ensure that class counsel was not “selling out” one category of claim for another. Id. at *4–8.

In the process, the Court rejected the objector’s arguments that incentive awards for named plaintiffs are improper. Although the Eleventh Circuit recently made waves for holding that class settlements may not offer incentive awards to class representatives, the First Circuit chose “to follow the collective wisdom of courts over the past several decades that have permitted these sorts of incentive payments, rather than create a categorical rule that refuses to consider the facts of each case.” Id. at *10. The Court also rejected the objector’s argument that incentive awards categorically present a conflict of interest that prevents named plaintiffs from adequately representing the class. See id.

The First Circuit’s decision should remind companies who are negotiating a proposed class settlement to consider whether separate counsel is necessary to represent groups of plaintiffs that have significantly different claims—i.e., claims with materially different elements or defenses. Moreover, although the Court did not address the extent to which a class may be certified for litigation, see id. at *8 n.1, it noted that “much, if not all, of [its] analysis would apply to Rule 23(a)’s adequate representation requirement in the context of class certification for settlement,” id. at *3. Thus, defendants may be able to apply the Court’s reasoning to argue that a class should not be certified under Rule 23(a)(4)’s adequacy requirement if a single class counsel represents plaintiffs who have claims that involve significantly different elements or defenses.

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Photo of Stephen Rees Stephen Rees

Stephen Rees is a litigation associate in the firm’s Washington, DC office. He has handled matters involving a range of issues, including class actions, antitrust, product liability, consumer fraud, breach of contract, tort, ERISA, and insurance claims.

Stephen has experience in all stages…

Stephen Rees is a litigation associate in the firm’s Washington, DC office. He has handled matters involving a range of issues, including class actions, antitrust, product liability, consumer fraud, breach of contract, tort, ERISA, and insurance claims.

Stephen has experience in all stages of litigation, including:

dispositive motions;
fact and expert discovery;
class certification;
summary judgment;
mediation;
arbitration; and
trial preparation

Stephen has first-chaired fact witness depositions, drafted dispositive motions in both federal and state court, and argued in federal district and appellate courts. In addition, he maintains an active pro bono practice, with an emphasis on immigration-related impact litigation and criminal law matters.

Photo of Andrew Soukup Andrew Soukup

Andrew Soukup serves as co-chair of the firm’s Class Action Litigation Practice Group. He specializes in representing heavily regulated businesses in class actions, multidistrict litigation, and other high-stakes disputes.

Praised for achieving “big wins in his class action practice,” Andrew has defeated a…

Andrew Soukup serves as co-chair of the firm’s Class Action Litigation Practice Group. He specializes in representing heavily regulated businesses in class actions, multidistrict litigation, and other high-stakes disputes.

Praised for achieving “big wins in his class action practice,” Andrew has defeated a variety of advertising, consumer protection, privacy, and product defect and safety claims, with exposure ranging from millions to billions of dollars. Based on his “proven record,” Andrew has been recognized as an “attorney you want on your side in a bet-the-company case.”

Andrew’s clients include those in the consumer products, life sciences, financial services, technology, automotive, gaming, and media and communications industries. He has consistently helped his clients prevail in litigation in federal and state courts across the country against putative class representatives, government agencies, state attorneys general, and commercial entities.

With a long history of representing companies subject to extensive federal regulation and oversight, Andrew has a unique ability to help courts understand the complex environment that governs clients’ businesses. Clients turn to Andrew because of his successful outcomes at all stages of litigation, his responsiveness and attention to their matters and his deep understanding of their businesses.

Andrew’s recent successes include:

Leading the successful defense of several of the world’s leading companies and brands in class actions accusing them of engaging in deceptive marketing or selling defective products, including claims brought under state consumer protection and unfair deceptive acts or practices statutes.
Defeating claims against one of the nation’s leading consumer products companies in industry-wide, multidistrict class-action litigation challenging the company’s marketing and advertising of over-the-counter medicine containing allegedly ineffective ingredients, which earned Andrew recognition by American Lawyer as a “Litigator of the Week.”
Delivered wins in multiple nationwide class actions on behalf of leading financial institutions related to fees, disclosures, and other banking practices, including defending several financial institutions accused of violating the Paycheck Protection Program’s implementing laws, which contributed to Covington’s recognition as a “Class Action Group of the Year.”
Represented several consumer product and life sciences companies from lawsuits seeking economic damages arising out of the sale of products that allegedly caused personal injuries.
Helping several of the world’s most prominent companies from ESG-related claims accusing them of misrepresenting their practices.

Andrew has also achieved favorable outcomes for clients in commercial and indemnification disputes involving contracts, fraud, and other business tort claims. He helps companies navigate contractual and indemnification disputes with their business partners. Additionally, he provides guidance on arbitration agreements and has helped numerous clients avoid multi-district and class-action litigation by enforcing their arbitration agreements.

As a recognized thought leader on issues impacting class action litigation, Andrew regularly contributes to the firm’s blog, Inside Class Actions, and was recently featured in an interview with Litigation Daily on class-action litigation issues. In recognition of his achievements, he has been recognized by The American Lawyer as a Lawyer of the Week, and the Daily Journal recently included him on their list of Leading Commercial Litigators (2025).

Watch: Andrew shares insights on class action litigation, as part of our Navigating Class Actions video series.