In Radcliffe v. Experian Information Solutions, Inc., 715 F.3d 1157 (9th Cir. 2013), the 9th Circuit held that a settlement agreement that provided higher incentive payments to named plaintiffs if they agreed to the class settlement than if they did not created a conflict of interest between the named plaintiffs and the class, since the settlement gave the named plaintiffs an incentive to approve the settlement even if it was bad for class members. This decision holds that California’s general rule requiring automatic disqualification of counsel involved in a simultaneous conflict of interest does not apply to class actions and does not require disqualification of the plaintiffs’ counsel who crafted the settlement creating this conflict. A conflict among members of the same class is qualitatively different from a conflict that arises from representing parties who are on opposing sides of the same litigation. Conflicts among class members in dividing proceeds of a class settlement are not uncommon and disqualifying class counsel in all such cases could lead to delay and other adverse consequences. Here, the district court did not abuse its discretion in finding that despite the conflict, appointed class counsel could still better represent the class than objectors’ counsel.
Ninth Circuit Court of Appeals (Tigar, J., sitting by designation); March 28, 2016; 2016 WL 1178732