In Scott v. Dart, 99 F.4th 1076 (7th Cir. 2024), the Seventh Circuit held that incentive awards are sufficient to confer standing on named plaintiffs in appeals of class certification orders.  In doing so, it declined to follow a recent Eleventh Circuit decision holding that incentive awards are unlawful.

Scott brought a putative class action against Cook County, alleging that the County provided inadequate dental care to pretrial detainees.  The district court refused to certify the class, and Scott settled his individual claim.  But the settlement agreement reserved his right to appeal the denial of class certification and to seek an incentive award.  Scott then appealed.

The County argued that the Seventh Circuit lacked subject matter jurisdiction to entertain the appeal.  It first asserted that Scott lacked a live interest in the case because he settled his individual claim and could only obtain an incentive award if the class ultimately prevailed.  It then made the broader argument that Scott lacked standing because incentive awards are unlawful. 

The court rejected the County’s argument that Scott lacked a sufficient interest in the case.  It noted that the Seventh Circuit had previously held that “the prospect of an incentive award is enough to support the named plaintiff’s concrete interest in the litigation.”  Incentive awards, the court explained, “are designed to compensate named plaintiffs for the costs incurred in performing their role as class representatives—costs above and beyond what they would bear as ordinary class members.”

The court also rejected the County’s argument that incentive awards are unlawful.  The County had pointed to a decision from the Eleventh Circuit barring incentive awards in class action settlements; the Eleventh Circuit had in turn  relied on Nineteenth Century Supreme Court precedent.  The Scott court declined to follow the Eleventh Circuit, as doing so “would have us overlook the changes that accompanied the historical shift from common-law to Rule 23 class actions.”  These changes, which included the “more muscular class action device” created by Rule 23, “superseded” the older Supreme Court authority.  The court observed that three other courts of appeal have also “expressly rejected” the Eleventh Circuit’s view.

As we previously covered, the Supreme Court declined to take up this issue last year.  Until it does, defendants should be mindful that the rules governing incentive awards will vary across courts.

Photo of Dillon Grimm Dillon Grimm

Dillon Grimm is an associate in the firm’s Washington, DC office, where his practice focuses on complex commercial litigation and class actions.

Dillon has experience in matters involving a range of issues, including consumer protection, breach of contract, and fraud, among others. He…

Dillon Grimm is an associate in the firm’s Washington, DC office, where his practice focuses on complex commercial litigation and class actions.

Dillon has experience in matters involving a range of issues, including consumer protection, breach of contract, and fraud, among others. He has represented clients in the financial services, technology, and sports industries. He also maintains a robust pro bono practice focusing on criminal justice.

Dillon was a judicial law clerk for the Hon. Rebecca Beach Smith, U.S. District Court for the Eastern District of Virginia and the Hon. Jane R. Roth, U.S. Court of Appeals for the Third Circuit, before rejoining the firm in 2021.