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Sauby v. City of Fargo

July 16, 2009

STEPHANIE SAUBY AND JAMES BURNS, INDIVIDUALLY, AND ON BEHALF OF THOSE SIMILARLY SITUATED, PLAINTIFFS,
v.
CITY OF FARGO, DEFENDANT.



The opinion of the court was delivered by: Ralph R. Erickson, District Judge United States District Court

MEMORANDUM OPINION AND ORDER ON MOTION FOR INCENTIVE AWARDS

Before the Court is a motion for incentive awards to class representatives (Doc. #117). The parties have requested that this Court resolve three issues: (1) whether the named plaintiffs should receive incentive awards; (2) the amount of any incentive award; and (3) if an incentive award is ordered, who should bear the cost - City or the class members. The Court, having carefully considered the briefs, the arguments of the parties, and all other filings in this case, now issues this Memorandum Opinion and Order.

SUMMARY OF DECISION

The Court finds incentive awards for Plaintiff Stephanie Sauby in the amount of $10,000.00 is fair and reasonable, and for Plaintiff James Burns in the amount of $5,0000.00 is fair and reasonable. The Court further finds that the incentive awards are to be paid from the $1.5 million common fund, without a corresponding reduction of the refunds to be provided to participating class members.

BACKGROUND

Following a certified question of law to the North Dakota Supreme Court, the Supreme Court concluded that the City of Fargo illegally imposed fees for non-criminal traffic offenses that exceeded those provided for under N.D. Cent. Code § 39-06.1-06. The parties have now submitted for preliminary approval a settlement agreement in this class action, reserving for the Court issues regarding Plaintiffs' motion for incentive awards. The Court now decides the issues regarding incentive awards.

ANALYSIS

1. Authority to Approve Incentive Awards

The City argues this Court lacks the authority to award the named plaintiffs an incentive award because such an award is not provided for in an action under 42 U.S.C. § 1983 and to order such an award would overcompensate the plaintiffs. Incentive awards are not intended to "compensate" plaintiffs, but instead serve to encourage people with legitimate claims to pursue the action on behalf of others similarly situated. Droegemueller v. Petroleum Development Corp., Nos. 07-cv-1362-JLK-CBS, 07-cv-2508, 2009 WL 961539, *5 (D. Colo. Apr. 7, 2009).

Moreover, other courts have authorized incentive awards to class representatives alleging discriminatory conduct or a constitutional violation against governmental entities. Equal Rights Ctr. v. Washington Metro. Area Transit Auth., 573 F.Supp.2d 205, 214 (D.D.C. 2008) (finding incentive awards of $5,000 and $1,000 to named plaintiffs reasonable in lawsuit alleging WMATA's public paratransit service failed to meet standards required by the Americans with Disabilities Act, Rehabilitation Act, and § 1983); Fitzgerald v. City of Los Angeles, No. CV 03 01876 NM RZX, 2003 WL 25471424, *2 (C.D. Cal. Dec. 8, 2003) (authorizing incentive awards of $3,500 for each named plaintiff in a § 1983 action alleging unreasonable search and seizure in violation of the Fourth Amendment); Bynum v. Dist. of Columbia, 412 F.Supp.2d 73, 80-81 (D.D.C. 2006) (approving award of $200,000 for each named plaintiff in a § 1983 action against the Department of Corrections challenging the Department's policy of conducting suspicionless strip searches of inmates). This Court is not persuaded that it has no authority to order incentive awards in this class action. Thus, the Court will consider the merits of Plaintiffs' motion.

2. Named Plaintiffs Have Satisfied the Requirements for Incentive Awards

Having a named plaintiff is an essential part of any class action. On occasion, many individuals are harmed by the same wrongful practice, yet individual actions are impracticable because the individual recovery would be insufficient to justify the expense of bringing separate lawsuits. Nat'l Ass'n of Consumer Advocates: Standards and Guidelines for Litigating & Settling Consumer Class Actions, 176 F.R.D. 375 (West 1998).

Thus, class actions allow individuals to aggregate their power and enable them to take on powerful institutions. Id.

Incentive awards are "fairly typical" in class actions. Rodriguez v. West Publ'g Corp., 563 F.3d 948, 958 (9th Cir. 2009). Such awards are discretionary and serve to compensate named plaintiffs for work done on behalf of the class, to make up for financial or reputational risk undertaken in bringing the action, and to recognize a willingness to act as a private attorney general. Id. Requests for incentive awards should be carefully scrutinized to ensure the named plaintiffs did not bring suit expecting a bounty or otherwise compromised the interest of the class for personal gain. Hadix ...


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