New York Appellate Division Says Class Action Incentive Awards Are Not Permitted

By Brian Wolfman

Here's a surprising class action developement: In Flemming v. Barnwell Nursing Home and Health Facilities, Inc., No. 504328 (Oct. 16, 2008), one of New York's intermediate appellate courts has held that New York law prohibits incentive awards for named plaintiffs in class actions. Incentive awards, particularly lavish ones, have been controversial, but federal judges approve them all the time, as do state court judges. The court in Flemming indicated that federal courts approve incentive awards only in "special circumstances," but that is not accurate. As noted, many federal judges approve them routinely. Question: Are there any other appellate courts that have banned them?