                       RECOMMENDED FOR FULL-TEXT PUBLICATION
                           Pursuant to Sixth Circuit I.O.P. 32.1(b)
                                   File Name: 13a0203p.06

               UNITED STATES COURT OF APPEALS
                               FOR THE SIXTH CIRCUIT
                                 _________________


                                               X
                                                -
 In re: DRY MAX PAMPERS LITIGATION.
                                                -
 _____________________________________
                                                -
                                                -
                                                    No. 11-4156
 DANIEL GREENBERG,
                         Objector-Appellant, ,>
                                                -
                                                -
                        Plaintiffs-Appellees, --
 ANGELA CLARK, et al.,

                                                -
                                                -
                                                -
          v.
                                                -
                                                -
 PROCTER & GAMBLE COMPANY; PROCTER &
 GAMBLE PAPER PRODUCTS COMPANY;                 -
                                                -
                       Defendants-Appellees. -
 PROCTER & GAMBLE DISTRIBUTING LLC,
                                                -
                                               N
                 Appeal from the United States District Court
                for the Southern District of Ohio at Cincinnati.
             No. 1:10-cv-301—Timothy S. Black, District Judge.
                                 Argued: October 4, 2012
                          Decided and Filed: August 2, 2013
 Before: COLE and KETHLEDGE, Circuit Judges; and THAPAR, District Judge.*

                                   _________________

                                        COUNSEL
ARGUED: Adam E. Schulman, CENTER FOR CLASS ACTION FAIRNESS LLC,
Washington, D.C., for Appellant. Lynn Lincoln Sarko, KELLER ROHRBACK L.L.P.,
Seattle, Washington, for Plaintiffs-Appellees. D. Jeffrey Ireland, FARUKI IRELAND
& COX P.L.L., Dayton, Ohio, for Defendants-Appellees. ON BRIEF: Adam E.
Schulman, Theodore H. Frank, CENTER FOR CLASS ACTION FAIRNESS LLC,
Washington, D.C., for Appellant. Lynn Lincoln Sarko, Gretchen Freeman Cappio, Harry
Williams IV, KELLER ROHRBACK L.L.P., Seattle, Washington, for Plaintiffs-


        *
        The Honorable Amul R. Thapar, United States District Judge for the Eastern District of
Kentucky, sitting by designation.


                                              1
No. 11-4156        Greenberg v. Procter & Gamble Co., et al.                       Page 2


Appellees. D. Jeffrey Ireland, Brian D. Wright, FARUKI IRELAND & COX P.L.L.,
Dayton, Ohio, for Defendants-Appellees.
       KETHLEDGE, J., delivered the opinion of the court, in which THAPAR, D. J.,
joined. COLE, J. (pp. 15–16), delivered a separate dissenting opinion.
                                 _________________

                                        OPINION
                                 _________________

       KETHLEDGE, Circuit Judge. Class-action settlements are different from other
settlements. The parties to an ordinary settlement bargain away only their own
rights—which is why ordinary settlements do not require court approval. In contrast,
class-action settlements affect not only the interests of the parties and counsel who
negotiate them, but also the interests of unnamed class members who by definition are
not present during the negotiations. And thus there is always the danger that the parties
and counsel will bargain away the interests of unnamed class members in order to
maximize their own.

       This case illustrates these dangers. The class is made up of consumers who
purchased certain kinds of Pampers diapers between August 2008 and October 2011.
The parties and their counsel negotiated a settlement that awards each of the named
plaintiffs $1000 per “affected child,” awards class counsel $2.73 million, and provides
the unnamed class members with nothing but nearly worthless injunctive relief. The
district court found that the settlement was fair and certified the settlement class. We
disagree on both points, and reverse.

                                            I.

       The defendant Procter & Gamble Company (“P&G”) manufactures Pampers
brand diapers. In March 2010, P&G began marketing Pampers with so-called “Dry Max
technology.” Two months later, the Consumer Product Safety Commission began
investigating whether Dry Max diapers tend to cause severe diaper rash. The Clark
lawsuit and 11 others were filed very soon thereafter. The district court consolidated all
12 cases.
No. 11-4156        Greenberg v. Procter & Gamble Co., et al.                          Page 3


       In August 2010, the Commission—along with a Canadian agency, Health
Canada—released the results of its investigation. Based upon a review of 4,700 incident
reports, the Commission found no connection between the use of Dry Max diapers and
diaper rash.

       P&G then filed a motion to dismiss. Before Plaintiffs responded to the motion,
however—and indeed before any formal discovery in the case—the parties began
discussing settlement. By March 2011 they had reached a deal. Its essential terms were
as follows: Although the plaintiffs had sought class certification under Federal Rule of
Civil Procedure 23(b)(1) and (b)(3)—under which class members are free to opt out of
the class, and thus out of the deal negotiated for them by class counsel—the parties
agreed to seek certification of a class under Rule 23(b)(2), under which absent class
members cannot opt out of the deal. The class was defined as follows:

       All persons in the United States and its possessions and territories, who
       purchased or acquired (including by gift) Pampers brand diapers
       containing “Dry Max Technology” from August 2008 through Final
       Judgment. All federal judges to whom this case is assigned and members
       of their families within the first degree of consanguinity, and officers and
       directors of Procter & Gamble, are excluded from the class definition.

       P&G agreed to reinstate, for one year, a refund program that P&G had already
made available to its customers from July 2010 to December 2010. The program limits
refunds to one box per household, and requires consumers to provide an original receipt
and UPC code clipped from a Pampers box. P&G also agreed, for a period of two years,
to add to its Pampers box-label a single sentence suggesting that consumers “consult
Pampers.com or call 1-800-Pampers” for “more information on common diapering
questions such as choosing the right Pampers product for your baby, preventing diaper
leaks, diaper rash, and potty training[.]” P&G similarly agreed, for a period of two
years, to add to the Pampers website some rudimentary information about diaper rash
(e.g., “[d]iaper rash is usually easily treated and improves within a few days after
starting treatment”) and a suggestion to “[s]ee your child’s doctor” if certain severe
symptoms develop (e.g., “pus or weeping discharge”), along with two links to other
websites. P&G also agreed to contribute $300,000 to a pediatric resident training
No. 11-4156        Greenberg v. Procter & Gamble Co., et al.                      Page 4


program—the recipient program is not identified in the agreement—and $100,000 to the
American Academy of Pediatrics to fund a program “in the area of skin health.”

       The agreement treats named plaintiffs differently than other class members.
Named plaintiffs release all of their Pampers-related claims against P&G and receive an
“award” of $1000 “per affected child.” (Thus, for example, a named plaintiff with two
“affected children” would receive $2000.) Unnamed class members do not receive any
award, and benefit only from the labeling and website changes and the one-box refund
program (to the extent they have not done so already and have their original receipts and
UPC codes). Unnamed plaintiffs are also forced to release their “equitable” claims
against P&G, and are “permanently barred and enjoined from seeking to use the class
action procedural device in any future lawsuit against” P&G. But in theory, at least,
unnamed class members retain the right to file individual lawsuits for “personal injury”
or “actual damages” resulting from their children’s use of Dry Max diapers.

       Meanwhile, the agreement provides that Plaintiffs’ class counsel will receive a
fee award of $2.73 million.

       The parties thereafter moved for the district court to certify the class and to
approve the settlement agreement. Daniel Greenberg and two other class members
objected. Greenberg’s objections ran 33 pages and were numerous, detailed, and
substantive. Among other objections, Greenberg argued that certification of the putative
class under Rule 23(b)(2) would be improper because the plaintiffs’ claims are
predominantly monetary and because the class members have no ongoing relationship
with P&G; that the agreement affords inadequate notice to unnamed class members; that
the agreement violates the due-process rights of unnamed class members by depriving
them of their rights to seek class-wide monetary relief while denying them the ability to
opt-out of the settlement class; that the class representatives and class counsel had not
adequately represented the interests of unnamed class members within the meaning of
Rule 23(a)(4); and that the settlement was unfair to unnamed class members, in part
because of the size of the $2.73 million fee award in comparison to the utility of the
No. 11-4156        Greenberg v. Procter & Gamble Co., et al.                      Page 5


injunctive relief (i.e., the one-box refund program and labeling and website changes) to
unnamed class members.

       On September 28, 2011, the district court held a fairness hearing in which it
considered whether to certify the class, whether the settlement agreement was fair,
whether to approve the request of class counsel for $2.73 million in fees, and whether
to approve the “incentive awards” (of $1000 per child) for each named plaintiff. The
hearing lasted less than an hour. Counsel for the plaintiffs and for P&G presented
argument with little interruption from the district court. Counsel for Greenberg likewise
presented argument with virtually no questions or comment from the district court. Near
the end of the hearing, the court stated that it would certify the class, that it would
approve the $2.73 million fee award and the incentive awards, and that the settlement
was fair. The court ventured no response at all to any of Greenberg’s objections, other
than to say that they had been “rebutted thoroughly by the parties’ briefs.” Hearing Tr.
34. The court did state, however, that it would “put on a significant written final
approval order and final judgment[.]” Id. at 35.

       The district court entered its “Final Approval Order and Final Judgment” later
that afternoon. With the exception of a few typographical changes, the order was a
verbatim copy of a proposed order that the parties had submitted to the court before the
hearing. The order was conclusory, for the most part merely reciting the requirements
of Rule 23 in stating that they were met. About Greenberg’s objections, the order had
nothing to say.

       Greenberg’s appeal followed.

                                           II.

       We review the district court’s certification of the class and approval of the
settlement for an abuse of discretion. Int’l Union, UAW v. Gen. Motors Corp., 497 F.3d
615, 625 (6th Cir. 2007).
No. 11-4156         Greenberg v. Procter & Gamble Co., et al.                         Page 6


                                             A.

        In class-action settlements, the adversarial process—or what the parties here refer
to as their “hard-fought” negotiations—extends only to the amount the defendant will
pay, not the manner in which that amount is allocated between the class representatives,
class counsel, and unnamed class members. For “the economic reality [is] that a settling
defendant is concerned only with its total liability[,]” Strong v. BellSouth Telecomms.,
Inc., 137 F.3d 844, 849 (5th Cir. 1998); and thus a settlement’s “allocation between the
class payment and the attorneys’ fees is of little or no interest to the defense.” In re Gen.
Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig. (“Gen. Motors Pickup
Litig.”), 55 F.3d 768, 820 (3d Cir. 1995) (internal quotation marks omitted).
Hence—unlike in virtually every other kind of case—in class-action settlements the
district court cannot rely on the adversarial process to protect the interests of the persons
most affected by the litigation—namely, the class. Instead, the law relies upon the
“fiduciary obligation[s]” of the class representatives and, especially, class counsel, to
protect those interests. Creative Montessori Learning Ctrs. v. Ashford Gear LLC,
662 F.3d 913, 917 (7th Cir. 2011). And that means the courts must carefully scrutinize
whether those fiduciary obligations have been met.

        “[I]n evaluating the fairness of a settlement,” therefore, we look in part “to
whether the settlement gives preferential treatment to the named plaintiffs while only
perfunctory relief to unnamed class members.” Vassalle v. Midland Funding LLC,
708 F.3d 747, 755 (6th Cir. 2013) (internal quotation marks omitted). “[S]uch inequities
in treatment make a settlement unfair.” Id. The same is true of a settlement that gives
preferential treatment to class counsel; for class counsel are no more entitled to disregard
their “fiduciary responsibilities” than class representatives are. Gen. Motors Pickup
Litig., 55 F.3d at 788. Most class counsel are honorable; but “settlement classes create
especially lucrative opportunities for putative class attorneys to generate fees for
themselves without any effective monitoring by class members who have not yet been
apprised of the pendency of the action.” Id. “[T]he danger being that the lawyers might
urge a class settlement at a low figure or on a less-than-optimal basis in exchange for
No. 11-4156        Greenberg v. Procter & Gamble Co., et al.                       Page 7


red-carpet treatment on fees.” Weinberger v. Great N. Nekoosa Corp., 925 F.2d 518,
524 (1st Cir. 1991); see also, e.g., Creative Montessori, 662 F.3d at 918 (“We and other
courts have often remarked the incentive of class counsel” to “agree[] with the defendant
to recommend that the judge approve a settlement involving a meager recovery for the
class but generous compensation for the lawyers”). Thus, if the “fees are unreasonably
high, the likelihood is that the defendant obtained an economically beneficial concession
with regard to the merits provisions, in the form of lower monetary payments to class
members or less injunctive relief for the class than could otherwise have [been]
obtained.” Staton v. Boeing Co., 327 F.3d 938, 964 (9th Cir. 2003). Hence the “courts
must be particularly vigilant” for “subtle signs that class counsel have allowed pursuit
of their own self-interests and that of certain class members to infect the negotiations.”
Dennis v. Kellogg Co., 697 F.3d 858, 864 (9th Cir. 2012) (internal quotation marks
omitted).

       The signs are not particularly subtle here. On the one hand, the settlement
agreement awards class counsel a fee of $2.73 million—this, in a case where counsel did
not take a single deposition, serve a single request for written discovery, or even file a
response to P&G’s motion to dismiss. On the other hand, the agreement provides
unnamed class members a medley of injunctive relief. We must scrutinize that relief to
determine whether the fee award amounts to “preferential treatment” in comparison to
it.

       We begin with the one-box refund program. Consumers cannot benefit from the
program unless they have retained their original receipt and Pampers-box UPC code, in
some instances for diapers purchased as long ago as August 2008. Greenberg sensibly
asks who does this sort of thing. We have no answer. Neither do the parties—or more
precisely they have offered none. The omission is conspicuous, for the refund program
here is merely a rerun of the very same program that P&G had already offered to its
customers from July 2010 to December 2010. P&G surely has data as to the numbers
of consumers who obtained refunds during that time; P&G’s counsel conceded as much
at oral argument on appeal. And yet—even after Greenberg called out the parties on this
No. 11-4156         Greenberg v. Procter & Gamble Co., et al.                      Page 8


very point in his objections to the district court—P&G chose not to provide that data in
arguing that the settlement is fair.

        “The burden of proving the fairness of the settlement is on the proponents.”
4 Newberg on Class Actions § 11:42 (4th ed.); see also, e.g., Ault v. Walt Disney World
Co., 692 F.3d 1212, 1216 (11th Cir. 2012); In re Katrina Canal Breaches Litig., 628
F.3d 185, 196 (5th Cir. 2010). Thus, to the extent the parties here argue that the
settlement was fair because the refund program has actual value for consumers, it was
the parties’ burden to prove the fact, rather than Greenberg’s burden to disprove it. The
parties did not carry that burden—which again (to his credit) P&G’s counsel conceded
at oral argument on appeal.

        There is another reason to think the reinstated refund program brings little value
to unnamed class members: most of them have already had access to it. The class
includes consumers who bought Dry Max Pampers between August 2008 and September
28, 2011. P&G’s initial refund program ended in December 2010. Thus, before this
settlement agreement was even reached, consumers who purchased Pampers during a 29-
month period—of the 38 months encompassed by the class definition—had already had
an opportunity to obtain their single-box refund, without the assistance of class counsel
and without assigning away important rights as captive members of a settlement class.
That is all the more reason to doubt the parties’ assertions of value. Cf. In re Aqua Dots
Prods. Liab. Litig., 654 F.3d 748, 752 (7th Cir. 2011) (“A representative who proposes
that high transaction costs (notice and attorneys’ fees) be incurred at the class members’
expense to obtain a refund that already is on offer is not adequately protecting the class
members’ interests”).

        The value of the one-box refund program to unnamed class members is dubious
on its face. The parties did not carry their burden to demonstrate otherwise, or indeed
even try. The district court, for its part, did not even mention the refund program during
the fairness hearing or in its order approving the settlement. Thus, for purposes of this
case, the value of the refund program to unnamed class members is negligible.
No. 11-4156        Greenberg v. Procter & Gamble Co., et al.                         Page 9


       That leaves the labeling and website changes. The issue, again, is whether the
value of these changes is so great, for unnamed class members, as to render counsel’s
$2.73 million fee reasonable rather than preferential in light of it. Here is the Pampers-
box label change, in its entirety: “For more information on common diapering questions
such as choosing the right Pampers product for your baby, preventing diaper leaks,
diaper rash, and potty training, please consult Pampers.com or call 1-800-Pampers.”
That is all.   Greenberg argues that this language—to the extent it amounts to
anything—amounts to little more than an advertisement for Pampers. We agree.

       The parties do not offer any specific argument to the contrary, other than to say
that the labeling change directs consumers to the Pampers.com website, where, it
appears, they think the real value lies. Here is the website change in its entirety:

       Diaper rash is usually easily treated and improves within a few days
       after starting home treatment. If your baby’s skin doesn’t improve after
       a few days of home treatment with over-the-counter ointment and more
       frequent diaper changes, then talk to your doctor.
       Sometimes, diaper rash leads to secondary infections that may require
       prescription medications. Have your child examined if the rash is severe
       or the rash worsens despite home treatment. See your child's doctor if
       the rash occurs along with any of the following: (1) fever; (2) blisters or
       boils; (3) a rash that extends beyond the diaper area; (4) pus or weeping
       discharge.
       Useful links: http://www.mayoclinic.com/health/diaperrash/DS00069
       and http://www.patiented.aap.org/content.aspx?aid=5297

       The first paragraph of this language provides only rudimentary information
whose value to unnamed class members is negligible. Again the parties offer no specific
argument to the contrary. The second paragraph instructs parents to “[s]ee your child’s
doctor” if certain rather alarming symptoms develop. We suppose there is some modest
value in that suggestion, although the district court said nothing about this point
specifically. But we would denigrate the intelligence of ordinary consumers (and thus
of the unnamed class members) if we concluded that—absent this suggestion from
P&G—they would have little idea to “see [their] child’s doctor” if their child’s rash was
accompanied by a fever or boils or “pus or weeping discharge.” And we would
No. 11-4156         Greenberg v. Procter & Gamble Co., et al.                      Page 10


denigrate their intelligence still further if we concluded that the value of this suggestion
was so great, to ordinary consumers, as to be commensurate with a fee award of $2.73
million.     The information contained in this paragraph is neither unknown nor
counterintuitive to most people—the way that information about, say, toxic-shock
syndrome would have been to consumers in 1980. Instead the information is common
sense, within the ken of ordinary consumers, and thus of limited value to them.

        The parties offer several arguments in response. The first is that, absent the new
website language, unnamed class members might remain “unaware that diapers
themselves can sometimes cause skin irritation requiring medical attention.” Plaintiffs’
Br. at 23. But the website language does not tell them that. The language says to see a
doctor if certain symptoms develop, not that the cause of the rash or other symptoms
might be the diapers themselves. Indeed it could hardly be otherwise: the settlement
agreement expressly states that nothing therein shall be construed as an admission by
P&G “of the truth of any fact alleged by Plaintiffs”—of which this alleged fact, above
all, was one.

        The second argument is that “every square centimeter” of a Pampers-box label
is “extremely valuable” to P&G. That may well be true; but it is surely less true for
unnamed class members, most of whose Pampers boxes, once emptied, presumably end
up by the curb. The third argument is of a piece: that “[n]o company with an $8-billion-
per-year diaper brand wants to put the words ‘blisters,’ ‘boils,’ ‘pus’ or ‘weeping
discharge’ on its website, but that is what the Settlement requires of P&G.” Plaintiffs’
Br. at 24. Again we have no reason to doubt that assertion, but it displays the same
egocentrism as the last one. To be clear: “The fairness of the settlement must be
evaluated primarily based on how it compensates class members”—not on whether it
provides relief to other people, much less on whether it interferes with the defendant’s
marketing plans. Synfuel Techs., Inc. v. DHL Express (USA), Inc., 463 F.3d 646, 654
(7th Cir. 2006) (emphasis added); see also, e.g., Katrina Canal Breaches Litig., 628 F.3d
at 195; Gen. Motors Pickup Litig., 55 F.3d at 809–12. So these arguments too are
meritless.
No. 11-4156        Greenberg v. Procter & Gamble Co., et al.                      Page 11


       The parties’ remaining argument with regard to the website changes, in
particular, is that the changes include links to two other sites that include more in-depth
information about diaper rash. The implication, apparently, is that unnamed class
members would not find those sites or others like them absent the hyperlinks on the
Pampers site. The implication is risible; and the parties have not borne their burden to
prove otherwise. Any unnamed class member with the means to access Pampers.com
and then follow a link to a more informative website is almost certainly a class member
who is familiar with Google. (Indeed, P&G itself cites the likelihood of Google searches
by unnamed class members in arguing that the parties provided them with adequate
notice of the settlement. P&G Br. at 58 n.39.) And merely typing “diaper rash” into the
Google search engine produces exponentially more links and information than a class
member would find on Pampers.com.

       In sum, we reject the parties’ assertions regarding the value of this settlement to
unnamed class members. Those assertions are premised upon a fictive world, where
harried parents of young children clip and retain Pampers UPC codes for years on end,
where parents lack the sense (absent intervention by P&G) to call a doctor when their
infant displays symptoms like boils and weeping discharge, where those same parents
care as acutely as P&G does about every square centimeter of a Pampers box, and where
parents regard Pampers.com, rather than Google, as their portal for important
information about their children’s health. The relief that this settlement provides to
unnamed class members is illusory. But one fact about this settlement is concrete and
indisputable: $2.73 million is $2.73 million.

       “Cases are better decided on reality than on fiction.” United States v. Priester,
646 F.3d 950, 953 (6th Cir. 2011). The reality is that this settlement benefits class
counsel vastly more than it does the consumers who comprise the class. The conclusion
is unavoidable: this settlement gives “preferential treatment” to class counsel “while
only perfunctory relief to unnamed class members.” Vassalle, 708 F.3d at 755 (internal
quotation marks omitted). The settlement in this case is not fair within the meaning of
Rule 23, and the district court abused its discretion in finding the contrary.
No. 11-4156        Greenberg v. Procter & Gamble Co., et al.                      Page 12


                                            B.

       We briefly address Greenberg’s argument that the named plaintiffs are
inadequate representatives of the class under Rule 23(a)(4). Under that Rule, we
measure the adequacy of the class members’ representation based upon two factors: “1)
the representatives must have common interests with unnamed members of the class, and
2) it must appear that the representatives will vigorously prosecute the interests of the
class through qualified counsel.” Vassalle, 708 F.3d at 757 (internal quotation marks
and alterations omitted). The Rule requires that “the class members have interests that
are not antagonistic to one another.” Id. (internal quotation marks omitted). Thus, “the
linchpin of the adequacy requirement is the alignment of interests and incentives
between the representative plaintiffs and the rest of the class.” Dewey v. Volkswagen
Aktiengesellschaft, 681 F.3d 170, 183 (3d Cir. 2012).

       These requirements are scrutinized more closely, not less, in cases involving a
settlement class. For the reasons already explained, see supra at 6–7, “the need for the
adequacy of representation finding is particularly acute in settlement class situations[.]”
Gen. Motors Pickup Litig., 55 F.3d at 795. Thus, the Supreme Court itself has
emphasized that the courts must give “undiluted, even heightened, attention in the
settlement context[]” to the certification requirements of Rule 23. Amchem Prods., Inc.
v. Windsor, 521 U.S. 591, 620 (1997); see also UAW, 497 F.3d at 625 (same).

       So we consider the alignment of interests and incentives here. They can be
summarized as follows: The named plaintiffs (i.e., the class representatives) exercise
their Rule 23 rights and receive an award of $1000 per child in return; the unnamed
members are barred from exercising those same rights and receive nothing but illusory
injunctive relief. Therein lies the conflict. There is no overlap between these deals: they
are two separate settlement agreements folded into one. Moreover, there is every reason
to think—and again the parties have not attempted to show otherwise—that an award of
$1000 per child more than compensates the class representatives for any actual damages
they might have incurred as a result of buying Dry Max diapers. And thus, having been
No. 11-4156         Greenberg v. Procter & Gamble Co., et al.                       Page 13


promised the award, the class representatives had “no interest in vigorously prosecuting
the [interests of] unnamed class members[.]’” Vassalle, 708 F.3d at 757.

        Class counsel responds that the $1000 per child payments are merely “incentive”
awards, and that incentive awards are common in class litigation. But neither point
provides much comfort. Our court has never approved the practice of incentive
payments to class representatives, though in fairness we have not disapproved the
practice either. See Vassalle, 708 F.3d at 756. Thus, to the extent that incentive awards
are common, they are like dandelions on an unmowed lawn—present more by
inattention than by design. And we have expressed a “sensibl[e] fear that incentive
awards may lead named plaintiffs to expect a bounty for bringing suit or to compromise
the interest of the class for personal gain.” Hadix v. Johnson, 322 F.3d 895, 897 (6th
Cir. 2003).

        We have no occasion in this case to lay down a categorical rule one way or the
other as to whether incentive payments are permissible. But we do have occasion to
make some observations relevant to our decision here. The propriety of incentive
payments is arguably at its height when the award represents a fraction of a class
representative’s likely damages; for in that case the class representative is left to recover
the remainder of his damages by means of the same mechanisms that unnamed class
members must recover theirs. The members’ incentives are thus aligned. But we should
be most dubious of incentive payments when they make the class representatives whole,
or (as here) even more than whole; for in that case the class representatives have no
reason to care whether the mechanisms available to unnamed class members can provide
adequate relief. Accord Radcliffe v. Experian Info. Solutions, 715 F.3d 1157, 1161 (9th
Cir. 2013) (holding that the “incentive awards significantly exceeded in amount what
absent class members could expect upon settlement approval” and thus “created a patent
divergence of interests between the named representatives and the class”).

        This case falls into the latter scenario. The $1000-per-child payments provided
a disincentive for the class members to care about the adequacy of relief afforded
unnamed class members, and instead encouraged the class representatives “to
No. 11-4156         Greenberg v. Procter & Gamble Co., et al.                      Page 14


compromise the interest of the class for personal gain.” Hadix, 322 F.3d at 897. The
result is the settlement agreement in this case. The named plaintiffs are inadequate
representatives under Rule 23(a)(4), and the district court abused its discretion in finding
the contrary.

        We express no opinion regarding Greenberg’s remaining objections to the
settlement.

                                       *     *     *

        The judgment of the district court is reversed, and the case remanded for further
proceedings consistent with this opinion.
No. 11-4156        Greenberg v. Procter & Gamble Co., et al.                      Page 15


                                ___________________

                                     DISSENT
                                ___________________

       COLE, Circuit Judge, dissenting. I dissent from the majority’s conclusion that
the district court abused its discretion by finding (1) the settlement in the instant case
fair, reasonable, and adequate under Rule 23; and (2) the named plaintiffs to be adequate
representatives despite the incentive payments.

       We cannot evaluate a settlement’s fairness without “weighing the plaintiff’s
likelihood of success on the merits against the amount and form of the relief offered in
the settlement.” Int’l Union, United Auto., Aerospace & Agr. Implement Workers of Am.
v. Gen. Motors Corp., 497 F.3d 615, 631 (6th Cir. 2007). In fact, this is the most
important of the seven factors that we are supposed to consider in reviewing the fairness
of a settlement. Poplar Creek Dev. Co. v. Chesapeake Appalachia, LLC, 636 F.3d 235,
245 (6th Cir. 2011).

       Although the relief offered to the unnamed class members may not be worth
much, their claims appear to be worth even less. Nobody disputes that the class’s claims
in this case had little to no merit. In the absence of this settlement, class members would
almost certainly have gotten nothing. And even with the settlement, unnamed class
members remain free to try their luck, as the settlement preserves their right to sue for
personal injury and actual damages caused by Dry Max diapers. Thus, the concern that
plaintiffs’ counsel “bargained away” some valuable “interest” is misplaced. A very
different settlement would likely be before us if the Commission’s investigation had not
exculpated Dry Max diapers.

       The majority does not apply this Court’s established multi-factor tests for
settlement fairness and the reasonableness of fee awards. See UAW, 497 at 631; Moulton
v. U.S. Steel Corp., 581 F.3d 344, 352 (6th Cir. 2009). Instead, the majority fashions a
new test based largely on dicta from other circuits: if the fee award looks like
“preferential treatment” compared to the class relief, then the settlement is unfair. I do
No. 11-4156         Greenberg v. Procter & Gamble Co., et al.                         Page 16


not believe this test accords with circuit precedent or reaches the correct result in the
present case.

        I also do not agree that the named plaintiffs in this case were inadequate class
representatives merely because the incentive payment might have made them whole.
Radcliffe is inapposite because the “patent divergence of interests” therein was created
primarily by the conditioning of the incentive awards on named plaintiffs’ support for
the settlement. See 715 F.3d at 1161 (“These conditional incentive awards caused the
interests of the class representatives to diverge . . . .”). The fact that the incentive awards
exceeded the amount that absent class members received was merely icing on the cake.
See id. (“Moreover, the conditional incentive awards significantly exceeded . . .”
(emphasis added)).

        This Court has acknowledged that “there may be circumstances where incentive
awards are appropriate.” Hadix v. Johnson, 322 F.3d 895, 898 (6th Cir. 2003). The
“conventional argument” for class action lawsuits is that the majority of class members’
claims would not otherwise be worth bringing. See Tardiff v. Knox Cnty., 365 F.3d 1,
7 (1st Cir. 2004) (citation omitted). Where claims are worth very little, as in this case,
even a recovery in the full amount may not be enough to induce anyone to serve as a
named plaintiff. The district court did not abuse its discretion in crediting the named
plaintiffs’ claims that they have spent significant time “assist[ing] in gathering facts, in
contacting medical professionals and obtaining medical records, reviewing pleadings,
preparing initial disclosures, and considering settlement terms.” Cf. Brotherton v.
Cleveland, 141 F. Supp. 2d 907, 913-14 (S.D. Ohio 2001) (approving a $50,000
incentive payment to a named plaintiff for “working on this litigation”).

        Accordingly, I dissent.
