National Veterans Legal Services Program, National Consumer Law Center, Alliance for… v. United States

United States Court of Appeals
for the Federal Circuit
______________________
NATIONAL VETERANS LEGAL SERVICES
PROGRAM, NATIONAL CONSUMER LAW
CENTER, ALLIANCE FOR JUSTICE,
Plaintiffs-Appellees
v.
UNITED STATES,
Defendant-Appellee
v.
ERIC ALAN ISAACSON,
Interested Party-Appellant
______________________
2024-1757
______________________
Appeal from the United States District Court for the
District of Columbia in No. 1:16-cv-00745-PLF, Senior
Judge Paul L. Friedman.
______________________
Decided: March 20, 2026
______________________
D EEPAK G UPTA, Gupta Wessler LLP, Washington, DC,
argued for plaintiffs-appellees. Also represented by
J ONATHAN T AYLOR; WILLIAM H. N ARWOLD, Motley Rice
LLC, Hartford, CT; MEGHAN O LIVER, Mt. Pleasant, SC.
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NVLSP v. US 2
ALEXIS M. D ANIEL , Commercial Litigation Branch,
Civil Division, United States Department of Justice, Wash-
ington, DC, argued for defendant-appellee. Also repre-
sented by K IRK T HOMAS MANHARDT , YAAKOV R OTH ,
MARCUS S. SACKS .
ERIC ALAN I SAACSON, Law Office of Eric Alan Isaacson,
La Jolla, CA, argued pro se.
______________________
Before L OURIE and H UGHES , Circuit Judges, and
F REEMAN,1 District Judge.
F REEMAN, District Judge.
This appeal challenges the settlement of a nationwide
class action claiming that the federal judiciary overcharged
members of the public for access to court records through
the Public Access to Court Electronic Records (“PACER”)
system. The suit was brought in the United States District
Court for the District of Columbia by three nonprofit or-
ganizations, the National Veterans Legal Services Pro-
gram, the National Consumer Law Center, and the
Alliance for Justice (collectively, “Plaintiffs”), asserting
that the Government exceeded its statutory authority by
exacting PACER fees to fund not only the expense of oper-
ating PACER itself but also other expenses unrelated to
the operation of PACER. After nearly eight years of litiga-
tion, which encompassed substantial motion practice, an
interlocutory appeal, and protracted negotiations, the case
settled for $125,000,000.
The district court approved the settlement, noting that
hundreds of thousands of PACER users will be fully or
1 Honorable Beth Labson Freeman, District Judge,
United States District Court for the Northern District of
California, sitting by designation.
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NVLSP v. US 3
substantially reimbursed for all PACER fees they incurred
during the eight-year class period. The district court also
approved awards of attorneys’ fees and costs, as well as in-
centive awards2 to each of the three nonprofit organiza-
tions that served as class representatives.
Appellant-Objector Eric Isaacson (“Objector”), proceed-
ing pro se, appeals the judgment. He asserts that the dis-
trict court lacked subject matter jurisdiction, abused its
discretion in approving the settlement and awarding attor-
neys’ fees, and acted contrary to Supreme Court precedent
in granting the incentive awards. We affirm.
BACKGROUND
Collection of PACER fees is governed by a statutory
note to 28 U.S.C. § 1913 titled “Court Fees for Electronic
Access to Information.” 28 U.S.C. § 1913 note (2002) (the
“§ 1913 Note”). The § 1913 Note permits the federal judi-
ciary to “prescribe reasonable fees . . . for collection by the
courts . . . for access to information available through auto-
matic data processing equipment.” Id. The § 1913 Note
was amended by the E-Government Act of 2002, Pub. L.
No. 107-347, § 205(e), 116 Stat. 2899, 2915, which added
language providing that the judiciary may prescribe such
reasonable fees “only to the extent necessary.” Id.
Since 2012, PACER users have been charged $0.10 per
page for downloading and printing court records.
J.A. 2863, 4218. Prior to this litigation, PACER fees were
used not only to fund the operation of PACER, but also to
fund six other categories of expenses: (1) the Case Manage-
ment and Electronic Case Filing (“CM/ECF”) System;
(2) Electronic Bankruptcy Noticing (“EBN”); (3) the State
of Mississippi Study; (4) the Violent Crime Control Act
2 The terms “incentive award” and “service award”
are used interchangeably in the parties’ briefs and applica-
ble authorities.
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NVLSP v. US 4
Notification System; (5) Web-Based Juror Services; and
(6) Courtroom Technology. J.A. 5, 2865–87.
In April 2016, Plaintiffs filed this class action in the
United States District Court for the District of Columbia.
J.A. 107–21. Plaintiffs claimed that they had been charged
PACER fees in excess of those allowed under the § 1913
Note, as amended by the E-Government Act, because the
fees “far exceed the cost of providing the records” accessed
through PACER. J.A. 107. They sought refund of the al-
legedly excessive PACER fees they had paid, asserting that
the district court had subject matter jurisdiction under the
Little Tucker Act, 28 U.S.C. § 1346(a). J.A. 120–21. The
Little Tucker Act gives district courts original jurisdiction
of certain civil actions and claims against the United States
that do not exceed $10,000. 28 U.S.C. § 1346(a)(2). The
Plaintiffs alleged that each individual download of a public
record through PACER gave rise to a separate “illegal ex-
action” claim falling within the Little Tucker Act’s jurisdic-
tional maximum. J.A. 120.
The case was vigorously litigated, with the parties en-
gaging in substantial motion practice, including a motion
to dismiss, class certification, and cross-motions for sum-
mary judgment. J.A. 506, 2433, 3443. The district court
certified a class of PACER users and certified one class
claim: “that the fees charged for accessing court records
through the PACER system are higher than necessary to
operate PACER and thus violate the E-Government Act,
entitling plaintiffs to monetary relief from the excessive
fees under the Little Tucker Act.” J.A. 2433.
In our prior opinion addressing the parties’ interlocu-
tory cross-appeals of the district court’s summary judg-
ment order, we affirmed the district court’s determination
that the certified class claim fell within the district court’s
subject matter jurisdiction under the Little Tucker Act.
See Nat’l Veterans Legal Servs. Program v. United States,
968 F.3d 1340, 1346–49 (Fed. Cir. 2020). We also affirmed
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NVLSP v. US 5
the district court’s statutory interpretation of the § 1913
Note, holding that the Ҥ 1913 Note limits PACER fees to
the amount needed to cover expenses incurred in services
providing public access to federal court electronic docketing
information.” Id. at 1357. Finally, we agreed with the dis-
trict court that the Government had been using PACER
fees to fund categories of expenses not authorized by the
§ 1913 Note. See id.
We remanded the case to the district court in August
2020. See id. at 1359. After nearly two years of negotia-
tions, the parties reached the class action settlement at is-
sue here (“Settlement Agreement”). J.A. 3977, 3993, 3997.
The Settlement Agreement provides that the United States
will create a common fund of $125,000,000 to settle the
claims of class members, defined as “all persons or entities
who paid PACER fees between April 21, 2010, and May 31,
2018,” the date the judiciary stopped using PACER fees to
fund prohibited expenses (the “class period”). J.A. 12,
3977–79, 3993.
The Settlement Agreement requires that no less than
80% of the $125,000,000 common fund, or $100,000,000, be
distributed to the class. J.A. 3982. Class members will not
be required to submit claim forms to receive payments.
J.A. 3981. The claims administrator will use information
provided by the federal judiciary, which maintains records
of PACER registrants and fees paid, to identify class mem-
bers and distribute settlement funds. Id. The administra-
tor will disburse to each class member a minimum
payment equal to the lesser of $350 or the total amount of
PACER fees the class member paid during the class period.
J.A. 3982. The administrator will disburse any remaining
settlement funds to class members who paid more than
$350 in PACER fees pro rata based on the total amount of
PACER fees class members paid in excess of $350 during
the class period. J.A. 3982–83. Any unclaimed settlement
funds will be distributed equally among class members
who paid more than $350 in PACER fees during the class
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NVLSP v. US 6
period and collected their payment from the first distribu-
tion, with the caveat that class members may not recover
more than the total amount of PACER fees they paid dur-
ing the class period. J.A. 3983–84. The Settlement Agree-
ment provides that the total amount of attorneys’ fees,
incentive awards, and administrative costs shall not exceed
20% of the $125,000,000 settlement fund, or $25,000,000,
and that incentive awards shall not exceed $10,000 per
class representative. J.A. 3986.
The district court granted preliminary approval of the
settlement on May 8, 2023, after which notice was provided
to more than 500,000 PACER account holders through
email, postcards, a press release, and a banking newslet-
ter. J.A. 4078, 4287–90. There were thirty-three opt-outs
and five objections, only two of which were timely, includ-
ing that of Objector. J.A. 11, 4292. The district court held
a fairness hearing at which Objector appeared and pre-
sented oral argument. J.A. 1, 17–18. The district court
thereafter issued a thorough and carefully reasoned order
finding the settlement to be fair, reasonable, and adequate
under the relevant factors identified in Rule 23(e)(2) of the
Federal Rules of Civil Procedure. Nat’l Veterans Legal
Servs. Program v. United States, 724 F. Supp. 3d 1 (D.D.C.
2024) (“Final Approval Order”). The district court also
awarded attorneys’ fees in the amount of $23,863,345.02,
attorney expenses in the amount of $29,654.98, and settle-
ment administration costs in the amount of $1,077,000. Id.
at 30–31. Finally, the district court approved incentive
awards in the amount of $10,000 for each of the three class
representatives. Id. at 30.
A substantial portion of the Final Approval Order was
devoted to addressing arguments raised by Objector. See,
e.g., id. at 17–21, 23–24, 26–27, 29–30. Objector argued
that class members whose aggregate claims exceeded
$10,000 fell outside the subject matter jurisdiction of the
district court under the Little Tucker Act; too much of the
common fund was allocated pro rata, favoring large-scale
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NVLSP v. US 7
PACER users over small-scale PACER users; the attor-
neys’ fees award should have been limited to counsel’s lode-
star; and incentive awards to class representatives were
unlawful under Supreme Court authority. The district
court rejected each of those arguments. Id.
Objector timely filed this appeal. This Court has juris-
diction pursuant to 28 U.S.C. § 1295(a)(2).
STANDARD OF REVIEW
“Whether a district court has subject matter jurisdic-
tion over an action is a question of law that we review de
novo.” Nat’l Veterans Legal Servs. Program, 968 F.3d
at 1347 (quoting De Archibold v. United States, 499 F.3d
1310, 1313 (Fed. Cir. 2007)). We apply the law of the re-
gional circuit to substantive legal issues relating to general
areas of law that are not assigned exclusively to the Fed-
eral Circuit. United States v. One (1) Cadillac Coupe De
Ville, 833 F.2d 994, 997–98 (Fed. Cir. 1987). The approval
of a class action settlement and award of reasonable attor-
neys’ fees and service awards are reviewed for abuse of dis-
cretion. Cobell v. Salazar, 679 F.3d 909, 924 (D.C. Cir.
2012); Haggart v. Woodley, 809 F.3d 1336, 1346, 1354
(Fed. Cir. 2016).
D ISCUSSION
I
We first consider whether the district court had subject
matter jurisdiction under the Little Tucker Act to approve
the settlement. Previously, in connection with the
interlocutory cross-appeals of the district court’s summary
judgment order, we found that the complaint stated a claim
over which the district court had Little Tucker Act
jurisdiction. Nat’l Veterans Legal Servs. Program,
968 F.3d at 1346–49. Now, subject matter jurisdiction is
challenged on different grounds. We find that the district
court correctly determined that it had Little Tucker Act
jurisdiction to approve the settlement.
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NVLSP v. US 8
With exceptions not relevant here, the Little Tucker
Act grants district courts original jurisdiction, concurrent
with the United States Court of Federal Claims, over any
“civil action or claim against the United States, not exceed-
ing $10,000 in amount, founded either upon the Constitu-
tion, or any Act of Congress, or any regulation of an
executive department, or upon any express or implied con-
tract with the United States, or for liquidated or unliqui-
dated damages in cases not sounding in tort.” 28 U.S.C.
§ 1346(a)(2).
Objector argues that the district court lacked jurisdic-
tion under the Little Tucker Act to approve the settlement.
He contends that some class members’ total recovery ex-
ceeded $10,000, and district courts lose Little Tucker Act
jurisdiction when “the recovery sought on behalf of any
plaintiff or class member grows to exceed $10,000.” Appel-
lant’s Br. 18. While Objector is correct that district courts
can lose jurisdiction over the course of a case if a claim
grows to exceed $10,000, here, the proper understanding of
what constitutes a claim under the Little Tucker Act leads
to the clear conclusion that no single claim exceeded
$10,000.
The Little Tucker Act grants federal district courts ju-
risdiction to hear claims that do not exceed $10,000.
28 U.S.C. § 1346(a)(2). Where the members of a class are
not suing with respect to a common interest, their claims
are not aggregated for purposes of evaluating Little Tucker
Act jurisdiction. See Chula Vista City Sch. Dist. v. Bennett,
824 F.2d 1573, 1579 (Fed. Cir. 1987). Instead, the “claim
of each member of the class must be examined separately
to determine whether it meets the jurisdictional require-
ment.” Id. Thus, the relevant inquiry is whether any class
member had a single claim that exceeded the $10,000 limit.
We conclude that none did.
A pair of cases involving airlines helps clarify the issue.
See Am. Airlines v. Austin, 778 F. Supp. 72, 74 (D.D.C.
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NVLSP v. US 9
1991); Alaska Airlines, Inc. v. Austin, 801 F. Supp. 760,
762 (D.D.C. 1992), aff’d on other grounds, Alaska Airlines,
Inc. v. Johnson, 8 F.3d 791 (Fed. Cir. 1993). In both cases,
airlines sued the government seeking withheld payments
for tickets the government had purchased. And in both
cases, each alleged overcharge for an airline ticket was
treated as a separate claim for purposes of Little Tucker
Act jurisdiction, although the sum of relief sought far ex-
ceeded $10,000.
In American Airlines, the plaintiff airlines sued the
General Services Administration (“GSA”) based on its
withheld offsets of approximately $350,000 for unused tick-
ets. 778 F. Supp. at 74, 76. The district court determined
that it had Little Tucker Act jurisdiction because each in-
dividual ticket represented a single claim that did not ex-
ceed $10,000. Id. at 76. The court explained that “[t]he
government cannot escape this Court’s jurisdiction by tak-
ing a lump sum offset that totals over $10,000 and then
alleging that the claims should be aggregated.” Id.
In Alaska Airlines, the plaintiff airlines sought from
GSA the return of withheld funds amounting to $100 mil-
lion. 801 F. Supp. at 762. The government contested Little
Tucker Act jurisdiction. Id. In its jurisdictional analysis,
the district court characterized the $100 million as the “ac-
cumulation of disputes over alleged overcharges on thou-
sands of individual tickets,” and likewise found that each
claim was based on a single ticket for less than $10,000.
Id. Accordingly, the district court found that it had Little
Tucker Act jurisdiction.3
3 GSA did not directly challenge the district court’s
definition of “claim” on appeal and instead argued that the
district court lacked authority to award “money damages.”
See Alaska Airlines, 8 F.3d at 796–97. We rejected GSA’s
argument, holding that “the airlines received money to
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NVLSP v. US 10
In the airlines cases, each individual ticket gave rise to
a separate claim for purposes of Little Tucker Act jurisdic-
tion. So too here, each individual download of a public rec-
ord for which a class member was charged gives rise to a
separate claim. A class member’s total recovery of more
than $10,000 did not divest the district court of Little
Tucker Action jurisdiction, because each PACER transac-
tion was below the jurisdictional limit.
This interpretation of the Little Tucker Act is con-
sistent with United States v. Louisville & Nashville Rail-
road Co., 221 F.2d 698 (6th Cir. 1955). There, the Sixth
Circuit considered whether the district court had Little
Tucker Act jurisdiction over a railroad’s claims against the
government based on seventy-four separate bills of lading.
Id. at 701. The Sixth Circuit determined that each bill of
lading gave rise to a separate claim, and each claim was for
less than the $10,000 jurisdictional limit. Id. at 702. As a
consequence, the Sixth Circuit found that the district court
had subject matter jurisdiction, although the claims in the
aggregate exceeded $10,000. Id. at 702–03. The bills of
lading in Louisville, like the individual plane tickets in the
airlines cases, are analogous to the claims arising from the
PACER transactions here.
According to Objector, American Airlines, Alaska Air-
lines, and Louisville are distinguishable because those
cases were based on contract claims, while the present
class action is not. Appellant’s Br. 29. That argument is
not well taken. As an initial matter, the relief ordered in
Alaska Airlines was based not on the individual ticket con-
tracts, but on whether funds were illegally withheld under
the relevant statute. Alaska Airlines, Inc. v. Austin,
which they were entitled under the statute, not ‘money
damages.’” Id. at 797. We also noted that “the district
court had concurrent jurisdiction with the Court of Federal
Claims over the contracts.” Id.
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NVLSP v. US 11
801 F. Supp. 3d at 763; accord Alaska Airlines, Inc.
v. Johnson, 8 F.3d at 798. Moreover, whether the claims in
the cited cases were based in contract was not determina-
tive. Both contract claims and illegal exaction claims can
give rise to Little Tucker Act jurisdiction. See 28 U.S.C.
§ 1346(a)(2). In American Airlines, Alaska Airlines, and
Louisville, the existence of subject matter jurisdiction
turned on whether the at-issue transactions gave rise to
separate claims, such that their aggregation did not defeat
Little Tucker Act jurisdiction.
Objector asserts that this case is more akin to two cases
in which Little Tucker Act jurisdiction was lost with re-
spect to back pay claims that were under $10,000 when
filed but later accrued to more than $10,000. See Appel-
lant’s Br. 24 (citing Simanonok v. Simanonok, 918 F.2d
947, 950 (Fed. Cir. 1990); Smith v. Orr, 855 F.2d 1544,
1553 (Fed. Cir. 1988)). Objector’s reliance on those cases is
misplaced. As both opinions recognize, the “claim” in a
back pay case is expressly defined as “the total amount of
back pay the plaintiff stands ultimately to recover in the
suit and is not the amount of back pay accrued at the time
the claim is filed.” Simanonok, 918 F.2d at 950–51 (quot-
ing Smith, 855 F.2d at 1553). Thus, once a back pay claim
grows to exceed $10,000, Little Tucker Act jurisdiction is
lost. Here, by contrast, each individual PACER transac-
tion gave rise to a separate claim. So unlike in the back
pay cases, no claim here grew (or had the potential to grow)
to exceed $10,000, even if an individual class member’s re-
covery in the aggregate might have exceeded $10,000.
Objector also contends—for the first time on re-
ply—that Keene Corp. v. United States, 508 U.S. 200
(1993), is “fatal” to Appellees’ jurisdictional argument. See
Appellant’s Reply Br. 6. He asserts that Keene stands for
the proposition that the term “claim” has an expansive
meaning under the Tucker Act, 28 U.S.C. § 1491(a)(1). Ap-
pellant’s Reply Br. 5–10. Because the Little Tucker Act is
part of the same statutory scheme, he argues the same
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NVLSP v. US 12
expansive definition of claim should apply here. Appel-
lant’s Reply Br. 10.
Objector’s argument does not withstand even cursory
scrutiny. Keene interpreted a statute not at issue in this
case, 28 U.S.C. § 1500, which restricts the jurisdiction of
the Court of Federal Claims when a related action is pend-
ing elsewhere. Keene, 508 U.S. at 202. The statute was
enacted “to put an end to parallel litigation seeking dupli-
cative relief against the United States and its agents.”
United States v. Tohono O’Odham Nation, 563 U.S. 307,
318 (2011) (Sotomayor, J., concurring in the judgment). In
Keene, the Supreme Court interpreted the word “claim” in
the context of evaluating when “two suits are for or in re-
spect to the same claim.” Tohono O’Odham, 563 U.S.
at 311 (discussing Keene). The Keene Court held that, un-
der § 1500, the jurisdictional analysis turns on whether the
two claims are “based on substantially the same operative
facts[,] . . . at least if there [is] some overlap in the relief
requested.” Keene, 508 U.S. at 212. The Supreme Court’s
discussion of the meaning of the term “claim” in determin-
ing whether two lawsuits are duplicative does not illumi-
nate the jurisdictional issue here and simply has no
bearing on whether a “claim” is an individual PACER
transaction or an aggregate of all of a class member’s
PACER transactions for purposes of Little Tucker Act ju-
risdiction.
In sum, we hold that each individual PACER transac-
tion gave rise to a separate claim, and since no single claim
exceeded $10,000, the district court properly exercised Lit-
tle Tucker Act jurisdiction.
II
Turning to the merits, Objector urges that the district
court erred in three respects. First, he argues that the dis-
trict court abused its discretion in approving the Settle-
ment as fair, reasonable, and adequate. Second, he asserts
that the district court abused its discretion in awarding
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NVLSP v. US 13
class counsel attorneys’ fees of $23,863,345.02. Third, he
contends that the district court’s approval of incentive
awards to the class representatives was unlawful.
A
Objector asserts that the district court abused its dis-
cretion when it approved the Settlement Agreement as fair,
reasonable, and adequate. We disagree.
As relevant here, the Settlement Agreement provides
that each class member will be reimbursed for up to $350
in class period PACER fees. J.A. 3982. The remainder of
the settlement fund is to be distributed pro rata based on
the amount of PACER fees paid in excess of $350 during
the class period. J.A. 3982–83. Objector argues that this
distribution plan will provide a windfall for class members
with the largest total class period PACER fees, because
those class members are likely to be large law firms that
have already been reimbursed for their PACER expenses
by their clients. Appellant’s Br. 40–46.
Rule 23 of the Federal Rules of Civil Procedure pro-
vides that a court may approve a class action settlement
“only after a hearing and only on finding that it is fair, rea-
sonable, and adequate.” Fed. R. Civ. P. 23(e)(2). Nothing
in the district court’s order suggests that it abused its dis-
cretion in approving the Settlement Agreement. To the
contrary, the order, which followed a hearing on the fair-
ness of the Settlement Agreement, reflects a careful analy-
sis of Rule 23’s enumerated factors in light of the
objections. After consideration of those factors, the district
court concluded that the benefits of the Settlement Agree-
ment were “substantial” while the likely outcome for the
class if the case proceeded to trial was “uncertain.” Final
Approval Order, 724 F. Supp. 3d at 21.
The thrust of Objector’s argument is that the Settle-
ment Agreement “abandoned” the interests of “the little
user” in favor of large-scale users. Appellant’s Br. 44.
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NVLSP v. US 14
Objector, a solo practitioner with class period PACER fees
of $3,823.50, appears to count himself among the little us-
ers. Appellant’s Br. 21. He speculates that some class
members have class period PACER fees that total “tens
and even hundreds of thousands of dollars,” and protests
what he perceives to be preferential treatment for those
class members. Id.
The district court followed the routine practice of ap-
proving settlements that provide pro rata distributions of
common funds where the settlement fund is insufficient to
fully reimburse all class members. Final Approval Order,
724 F. Supp. 3d at 18–21. The nature of a settlement is
compromise, and the district court acknowledged that “[n]o
settlement is perfect.” Id. at 19. The district court resolved
the tension between the competing interests of small-scale
users and large-scale users by fully reimbursing all PACER
fees paid up to $350. Id. at 18. The $350 threshold ensured
that “the vast majority of class members [would] receive a
full refund.” JA. 4232. That the district court drew the line
below the level that would maximize Objector’s personal
recovery is not sufficient to demonstrate an abuse of discre-
tion. The district court properly found that the $350
threshold was a fair and reasonable compromise. Final Ap-
proval Order, 724 F. Supp. 3d at 18–20.
The district court also expressly considered Objector’s
argument that many of the class members are large law
firms, which likely would have already been reimbursed for
their class period PACER fees. Id. at 18–20. Noting that
this contention “makes some sense in the abstract,” the dis-
trict court concluded that large law firms’ claims are just
as valid as all other class members’ claims and the law
firms were likely the only plaintiffs that could have
brought those claims because they—not their clients—paid
the fees. Id. at 20. Moreover, the district court reasoned
that any potential disputes between those firms and their
clients regarding the class period PACER fees are best
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NVLSP v. US 15
addressed outside the settlement of this case. Id. We find
this conclusion reasonable.
Thus, we conclude that the district court acted well
within its discretion in approving the settlement.
B
Next, Objector contends that the district court abused
its discretion in granting attorneys’ fees of $23,863,345.02.
He argues that the district court merely “rubber-stamped”
the requested attorneys’ fees. Appellant’s Br. 47–67. We
find that the district court applied the correct legal stand-
ard and did not abuse its discretion.
Rule 23 provides that a “court may award reasonable
attorney’s fees and nontaxable costs that are authorized by
law or by the parties’ agreement.” Fed. R. Civ. P. 23(h).
There are two approaches that may be used to calculate at-
torneys’ fees in common fund cases: the percentage-of-the-
fund method and the lodestar method. See, e.g., Health Re-
public Ins. Co. v. United States, 58 F.4th 1365, 1371
(Fed. Cir. 2023).
The district court recognized that it must engage in “in-
dependent scrutiny of an award’s reasonableness,” and cor-
rectly explained that district courts have discretion to use
either the percentage-of-the-fund method or the lodestar
method in applying that scrutiny. Final Approval Order,
724 F. Supp. 3d at 21–23. “[B]ecause the percentage
method promotes efficiency and ensures that class counsel
is compensated primarily based on the result achieved,”
the district court opted to use the percentage method with
a lodestar cross-check to “confirm that the fee awarded
properly accounts for the effort [c]lass [c]ounsel expended.”
Id. at 23–24. This approach was entirely consistent with
governing law. See Health Republic, 58 F.4th at 1371;
Haggart, 809 F.3d at 1355.
Objector’s argument to the contrary is unpersuasive
because we have recognized that, in common fund cases,
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NVLSP v. US 16
“courts may determine the amount of attorney fees to be
awarded from the fund by employing a percentage
method.” Haggart, 809 F.3d at 1355. Moreover, the au-
thority on which Objector relies is inapplicable. Perdue
v. Kenney A. ex rel. Winn, 559 U.S. 542, 546 (2010), inter-
preted a fee-shifting statute, which arose in an entirely dis-
tinct context from the award of attorneys’ fees in common
fund cases. See Haggart, 809 F.3d at 1355.
Nothing in the record supports Objector’s contention
that the district court presumed the requested attorneys’
fees of 19.1% were reasonable. To the contrary, the district
court tested the fee request against each of the seven fac-
tors set forth in Health Republic: (1) the quality of counsel;
(2) the complexity and duration of the litigation; (3) the
risk of nonrecovery; (4) the fee that likely would have been
negotiated between private parties in similar cases; (5) any
class members’ objections to the settlement terms or fees
requested by class counsel; (6) the percentage applied in
other class actions; and (7) the size of the award. Final Ap-
proval Order, 724 F. Supp. 3d at 24–28; see also Health Re-
public, 58 F.4th at 1372 (citing Moore v. United States,
63 Fed. Cl. 781, 787 (2005)). For instance, the district court
found that the requested percentage of the common fund
was consistent with percentages awarded in comparable
complex class actions. Final Approval Order,
724 F. Supp. 3d at 27–28. The district court also found
that class counsel was exceptionally well qualified to han-
dle this “reasonably complex” case where there “was a sig-
nificant risk of nonrecovery” until “the moment” the
settlement was reached. Id. at 24–25. The district court
noted that the fee request was below the “typical 33% con-
tingency fee.” Id. at 25–26.
The district court went on to conduct a lodestar cross-
check of the requested attorneys’ fees, which resulted in a
multiplier of 3.96. Id. at 28–30. A lodestar cross-check is
“an approach taken in many judicial decisions, under
which the reasonableness of a potential percentage-of-the-
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NVLSP v. US 17
fund fee is checked by ‘dividing the proposed fee award by
the lodestar calculation, resulting in a lodestar multi-
plier.’”4 Health Republic, 58 F.4th at 1372 (quoting In re
AT & T Corp., 455 F.3d 160, 164 (3d Cir. 2006)).
Contrary to Objector’s assertion that an “unenhanced
lodestar” is presumptively sufficient, Appellant’s
Br. 51–52, the normal range for a multiplier in class ac-
tions is one to four. See Health Republic, 58 F.4th at 1375.
In Health Republic, which Objector acknowledges is the
guiding precedent, see Appellant’s Br. 48–49, we found that
the Court of Federal Claims abused its discretion in ap-
proving a $185 million fee that was eighteen to nineteen
times the lodestar without conducting a lodestar cross-
check. 58 F.4th at 1372–73. Here, by contrast, the district
court acknowledged that the multiplier in this case was at
the high end of the generally accepted one-to-four range.
Taking into account the facts of this case, the district court
found the multiplier to be warranted given the risks class
counsel took in agreeing to litigate this case and the excep-
tional service provided to the class for more than seven
years. Final Approval Order, 724 F. Supp. 3d at 29–30.
Objector’s further contention that class counsel failed
to submit sufficient documentation to support a meaning-
ful lodestar cross-check was based in part on a concern ex-
pressed by the Government. Appellant’s Br. 63. What
Objector omits from his argument, however, is that the
Government advised the district court that any concern
was “remedied” by additional documentation that was sup-
plied by the Plaintiffs. J.A. 4785–86. The district court
also explained that a lodestar cross-check is just that—a
cross-check—and appropriately declined to engage in
“bean-counting.” Final Approval Order, 724 F. Supp. 3d
4 The lodestar calculation is the product of the number
of hours and the rate. Haggart, 809 F.3d at 1355.
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NVLSP v. US 18
at 29–30 (citing In re Rite Aid Corp. Sec. Litig., 396 F.3d
294, 306–07 (3d Cir. 2005)).
At bottom, Objector’s position is that an unenhanced
lodestar is all that should be awarded, and nothing more.
But that is not the law. Health Republic, 58 F.4th
at 1375–76; Haggart, 809 F.3d at 1355. We conclude that
nothing in the record supports Objector’s assertion that the
district court applied the wrong legal standard or abused
its discretion.
C
The district court approved incentive awards of
$10,000 for each of the three class representatives. Final
Approval Order, 724 F. Supp. 3d at 30. Objector contends
that the district court erred by “paying” the class repre-
sentatives incentive awards. Appellant’s Br. 67–71. He ar-
gues that such awards are unlawful under Trustees
v. Greenough, 105 U.S. 527 (1881), and Central Railroad &
Banking Co. v. Pettus, 113 U.S. 116 (1885). We join the
clear majority of our sister circuits in holding that district
courts are permitted to approve incentive awards, and we
find that the district court did not abuse its discretion in
approving the incentive awards here.
1
Rule 23 provides that a district court may approve a
settlement agreement “only on finding that it is fair, rea-
sonable, and adequate” after considering whether it “treats
class members equitably relative to each other.” Fed. R.
Civ. P. 23(e)(2)(D). While Rule 23 is silent with respect to
incentive awards, courts have uniformly approved such
awards on the basis of implementing Rule 23’s goals and
mandates. Indeed, soon after Rule 23’s inception, courts
began approving incentive awards for class representa-
tives. See, e.g., Thornton v. E. Tex. Motor Freight, 497 F.2d
416, 420 (6th Cir. 1974).
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NVLSP v. US 19
“Beginning around 1990,” incentive awards “began to
find readier acceptance.” Theodore Eisenberg & Geoffrey
P. Miller, Incentive Awards to Class Action Plaintiffs: An
Empirical Study, 53 UCLA L. REV . 1303, 1310–11 (2006).
By the early 2000s, they were commonplace. Id. at 1311.
Thereafter, circuit courts’ acceptance of incentive awards
in class actions was universal until 2020, when the Elev-
enth Circuit broke away by holding that incentive awards
are unlawful per se under Greenough and Pettus. See John-
son v. NPAS Sols., LLC, 975 F.3d 1244, 1260 (11th Cir.
2020), reh’g denied, 43 F.4th 1138 (11th Cir. 2022). The de-
cision acknowledged that incentive awards are common-
place but dismissed the ubiquitous practice as “a product
of inertia and inattention, not adherence to law.” Id.
at 1259. Contrary to the Eleventh Circuit’s decision in
Johnson, an overwhelming majority of our sister circuits
have concluded that Greenough and Pettus do not preclude
district courts from granting incentive awards. See Moses
v. N.Y. Times Co., 79 F.4th 235, 253 (2d Cir. 2023) (collect-
ing cases).5
5 Since Johnson, every circuit to have expressly con-
sidered the question of whether Greenough and Pettus pre-
clude incentive awards has rejected the Eleventh Circuit’s
interpretation of those cases and found that district courts
are permitted to approve incentive awards. See Scott
v. Dart, 99 F.4th 1076, 1088 (7th Cir. 2024); Moses,
79 F.4th at 256; Murray v. Grocery Delivery E-Services
USA Inc., 55 F.4th 340, 353 (1st Cir. 2022); In re Apple Inc.
Device Performance Litig., 50 F.4th 769, 786–87 (9th Cir.
2022). Every other circuit—with the exception of the Elev-
enth—still accepts the long-standing practice of permitting
incentive awards. See Caligiuri v. Symantec Corp.,
855 F.3d 860, 867 (8th Cir. 2017); Jones v. Singing River
Health Servs. Found., 865 F.3d 285, 303 (5th Cir. 2017)
(vacating a class-action settlement with an incentive
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NVLSP v. US 20
Objector urges us to join the Eleventh Circuit and find
that incentive awards are per se unlawful.6 We decline to
do so. Joining our sister circuits, we hold that Greenough
and Pettus do not compel a contrary result.
In 1881, the Supreme Court in Greenough overturned
an award for “personal services and private expenses”
given to a railroad bondholder, who sued on behalf of him-
self and other bondholders. Greenough, 105 U.S. at 537.
The plaintiff, who sued the Florida Railroad Company for
the trustees’ alleged mismanagement of the railroad’s
bonds, litigated the case “with great vigor and at much ex-
pense.” Id. at 529. The district court awarded the
award on other grounds and affirming the same settlement
after the district court provided further explanation in
742 F. App’x 846 (5th Cir. 2018)); Pelzer v. Vassalle,
655 F. App’x 352, 361 (6th Cir. 2016) (nonprecedential);
Tennille v. W. Union Co., 785 F.3d 422, 434–35 (10th Cir.
2015); Berry v. Schulman, 807 F.3d 600, 613–14 (4th Cir.
2015); Cobell, 679 F.3d at 922–23; Sullivan v. DB Invs.,
Inc., 667 F.3d 273, 333 n.65 (3d Cir. 2011) (en banc).
6 Objector also directs us to Fikes Wholesale v. HSBC
Bank USA, N.A., 62 F.4th 704 (2d Cir. 2023). There, citing
Greenough and Johnson, the Second Circuit explained that
“[s]ervice awards are likely impermissible under Supreme
Court precedent,” but nonetheless concluded that “practice
and usage seem to have superseded Greenough” and fol-
lowed Second Circuit cases approving of such awards. Id.
at 721. Later that year, in Moses, the Second Circuit again
considered the issue of whether incentive awards are per-
missible and “decline[d] to depart from Rule 23’s mandate,
which permits fair and appropriate incentive awards.”
79 F.4th at 254–55. The Moses court further held that “nei-
ther Greenough nor Pettus prohibits incentive awards in
class actions.” Id. at 256. Accordingly, we find Objector’s
reliance on Fikes to be misplaced.
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NVLSP v. US 21
bondholder’s attorneys’ fees, litigation expenses, personal
fees for litigation-related travel, and a ten-year allowance
for “personal services.” Id. at 529–30.
The Supreme Court affirmed the award of attorneys’
fees and litigation expenses. Id. at 537. However, the
award for personal services and private expenses was
struck down because it was held to be analogous to “a sal-
ary.” Id. at 537–38. The Court expressed concern that
such an allowance “would present too great a temptation to
parties to intermeddle in the management of valuable
property or funds.” Id. at 538. For context, we note that
the ten-year allowance of $2,500 for “personal services” and
award of $15,003.35 for “personal expenditures,” id. at 530,
would be equivalent to more than $1.4 million today, Scott
v. Dart, 99 F.4th 1076, 1087 (7th Cir. 2024).
Four years later, in Pettus, the Supreme Court con-
firmed that attorneys may recover expenses for their work
on behalf of clients. 113 U.S. at 127–28. Pettus involved
the “outgrowth of certain litigation in the courts of Ala-
bama,” relating to “railroad property.” Id. at 117–18. Rail-
road creditors successfully sued a railroad company,
requesting that their debts be satisfied. Id. at 118–19. In
holding that the attorneys were entitled to reasonable com-
pensation for their services, the Court reiterated Green-
ough’s conclusion that a leading plaintiff’s claim for
compensation for personal services and private expenses is
unlawful. Id. at 122–23.
135 years after Pettus, the Eleventh Circuit held that
incentive awards in modern class actions are categorically
unlawful under Greenough and Pettus because they com-
pensate class representatives. Johnson, 975 F.3d at 1258.
Greenough and Pettus are recognized for authorizing
attorneys’ fees in a common fund case. See Boeing Co.
v. Van Gemert, 444 U.S. 472, 478 (1980). And they disallow
salaried class representatives. As the decades since have
borne out, however, Greenough and Pettus do not
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NVLSP v. US 22
illuminate the lawfulness of incentive awards in the con-
text of modern class actions, which represent “a significant
historical development.” Scott, 99 F.4th at 1085. The law-
suits at issue in Greenough and Pettus bear little resem-
blance to today’s class actions. Unlike in the nineteenth
century when courts were “confined to the application of
federal general common law and equitable principles,” Mo-
ses, 79 F.4th at 254, there is no “federal general common
law” today, Erie R. Co. v. Tompkins, 304 U.S. 64, 78 (1938).
The prohibited salary-like payments to bondholder-plain-
tiffs in lawsuits in equity are nothing like the types and
amounts of incentive awards in modern class actions.
Here, for example, the relatively modest award of $10,000
for each class representative out of a $125,000,000 settle-
ment for participation over eight years of litigation is a far
cry from the “salary” prohibited in Greenough, which would
exceed $1.4 million in today’s dollars. Even the Eleventh
Circuit found that today’s incentive awards in class actions
are only “roughly analogous to a salary” when it precluded
such awards. Johnson, 975 F.3d at 1257.
Incentive awards are not like salaries. They are token
amounts to encourage the participation of representative
plaintiffs, who “invest in the case more heavily than their
unnamed counterparts.” Scott, 99 F.4th at 1086 (citing
Moses, 79 F.4th at 253). A “named plaintiff is an essential
ingredient of any class action” and incentive awards may
be appropriate where they are “necessary to induce an in-
dividual” to take on this important role. Cook v. Niedert,
142 F.3d 1004, 1016 (7th Cir. 1998). Representative plain-
tiffs step up, often at significant personal and financial
cost, “to vindicate the rights of others.” In re Dun & Brad-
street Credit Servs. Customer Litig., 130 F.R.D. 366, 374
(S.D. Ohio 1990). Courts recognize that class representa-
tives take on a “meaningful burden,” including facing rep-
utational risks and expending time and effort. Roberts
v. Texaco, Inc., 979 F. Supp. 185, 202 (S.D.N.Y. 1997).
Therefore, it has been established for decades that modest
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NVLSP v. US 23
incentive awards are sometimes “appropriate to recognize
the efforts of the representative plaintiffs to obtain recov-
ery for the class.” In re Domestic Air Transp. Antitrust
Litig., 148 F.R.D. 297, 358 (N.D. Ga. 1993). Because class
representatives take on this extra burden, incentive
awards are also in line with Rule 23’s requirement that
class members be treated equitably relative to each other.
Fed. R. Civ. P. 23(e)(2)(D); see also Murray, 55 F.4th
at 353.
We disagree with the characterization of incentive
awards in Johnson as improper inducement to participate
in the suit, like a “bounty.” 975 F.3d at 1258. The awards
here at issue are so modest that the amount cannot reason-
ably be likened to a “bounty.”
Although incentive awards are widely accepted as a
mechanism for recognizing named plaintiffs, Rule 23 pro-
tects against awarding unwarranted or excessive amounts.
District courts have a duty to approve settlement agree-
ments only where they are fair, reasonable, and adequate.
Courts are attentive to the possibility that incentive
awards may be “‘unfair’ to other class members.” Smith
v. Tower Loan of Miss., 216 F.R.D. 338, 368 (S.D. Miss.
2003). For example, the Ninth Circuit has instructed dis-
trict courts to “be vigilant in scrutinizing all incentive
awards to determine whether they destroy the adequacy of
the class representatives.” Radcliffe v. Experian Info. Sols.
Inc., 715 F.3d 1157, 1164 (9th Cir. 2013). Incentive awards
are prohibited where they create a conflict between the
class representatives and the rest of the class or otherwise
undermine the equitable treatment of class members rela-
tive to each other. See, e.g., In re Dry Max Pampers Litig.,
724 F.3d 713, 722 (6th Cir. 2013). Rule 23’s safeguards ad-
dress many of the concerns animating the Supreme Court’s
prohibition against salary-like payments. In 1881, the Su-
preme Court lacked these tools, but under Rule 23, protec-
tion of the other plaintiffs’ rights can be assured.
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NVLSP v. US 24
With the exception of the Eleventh Circuit, the uniform
acceptance of incentive awards has been met with silence
as to Greenough’s impact on their lawfulness. Moses,
79 F.4th at 255. The Supreme Court has never suggested
that incentive awards in the context of modern-day class
actions are unlawful. To the contrary, the Supreme Court
recently noted that a “class representative might receive a
share of class recovery above and beyond her individual
claim.” China Agritech v. Resh, 584 U.S. 732, 747 n.7
(2018). Objector urges us to disregard China Agritech, ar-
guing that the “Supreme Court does not overrule its own
decisions so nonchalantly.” Appellant’s Reply Br. 35. Per-
haps not, but the Supreme Court appears to have regarded
class action incentive awards as distinct from the salary-
like payments prohibited in Greenough. Greenough and
Pettus did not speak to Rule 23 class actions, which would
not exist for another eight decades. Moreover, Objector
cites no case prior to Johnson in which a court precluded
incentive awards based on the holding in Greenough, and
we are aware of none. See Scott, 99 F.4th at 1085.
Likewise, Congress and the Advisory Committee on
Civil Rules have not revised the Rules to include a blanket
ban.7 Moses, 79 F.4th at 255. Instead, in the Class Action
Fairness Act of 2005, Congress noted that class members
are “sometimes harmed” where “unjustified awards are
made to certain plaintiffs at the expense of other class
members,” suggesting that reasonable awards are allowed.
Pub. L. No. 109-2, § 2, 119 Stat. 4 (2005) (emphasis added).
7 This inaction is notable when compared to the Pri-
vate Securities Litigation Reform Act of 1995, Pub. L.
No. 104-67, § 101, 109 Stat. 737, 743 (codified at 15 U.S.C.
§ 78u-4), which expressly prohibits incentive awards in
connection with securities class action settlements. See
Moses, 79 F.4th at 255.
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NVLSP v. US 25
We conclude that a per se exclusion of incentive awards
is not mandated by Greenough and Pettus because the mod-
est incentive awards in today’s class actions bear no resem-
blance to the prohibited salary in Greenough. And, when
unjustified incentive awards are sought, it is well within
the purview of a district court to reject such awards under
the review and approval mandates of Rule 23. Case-by-
case evaluation of an incentive award is an integral part of
a district court’s scrutiny of a proposed class action settle-
ment. Thus, it cannot be said that the existence of an in-
centive award is, itself, sufficient to undermine a
settlement agreement. Accordingly, we join the vast ma-
jority of our sister circuits in holding that incentive awards
are permitted so long as they are found to be reasonable by
a district court.
2
Having concluded that incentive awards are not per se
prohibited, we turn to consideration of whether the district
court abused its discretion in approving the incentive
awards granted to the class representatives here. We find
that it did not.
Other than his argument that service awards are cate-
gorically prohibited, Objector does not contend that the dis-
trict court’s award of $10,000 to each class representative
was unreasonable or resulted in unequal treatment of the
class representatives relative to other class members. The
district court recognized that incentive awards “must be
reasonable and proportionate to class representatives’ role
in the case.” Final Approval Order, 724 F. Supp. 3d at 23.
After considering the time and effort expended by each
class representative in this action, the district court found
the incentive awards to be appropriate. Id. at 30. We con-
clude that the district court’s approval of the incentive
awards was well within its discretion.
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NVLSP v. US 26
CONCLUSION
We have carefully considered all of Objector’s argu-
ments and conclude that they are without merit. Thus, we
affirm the district court’s order.
AFFIRMED
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