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What does it mean to “opt-out” of a class action?
Keibler Law Group represents corporations that opt-out of class actions. A class action opt-out case is when the an individual or corporation is a member of the class but instead of staying in the class and receiving a portion of the class settlement, instead the individual or corporation “opts out” of the class and must sue the defendant(s) directly to recover damages.
For individuals and corporations that receive Notice of a class action – that they are members of a certified class – they often have several options. One of those options is to opt-out of the class action and sue the defendant(s) directly. In many instances this is not the advisable because the plaintiff does not have high damages and they are better off remaining in the class.
However, in other instances the individual or company suffered a great impact from the defendant(s) and suing directly is in their best interest.
An experienced class action and plaintiff lawyer can assess your claim and determine whether it is best for you or your corporation to remain in the class settlement or to opt out and sue direct.
- Affirmative Recovery Program
- Antitrust litigation
- Bad faith insurance
- Bid rigging
- Civil conspiracy
- Class actions
- Class action opt-out litigation
- Eminent domain
- Fraud
- No poach
- Negligent Misrepresentation
- Price Fixing
- Telephone consumer protection act
- Whistleblower / Qui Tam
- Unfair business and trade practices
Should I opt-out of a class settlement?
For individuals or corporations that have a large claim, it may be beneficial for you to opt out of a class action settlement and file your own suit. Generally, an individual action – or direct action – will provide a plaintiff with a larger recovery than if that had stayed in the class. However, if the claim is minor than there likely is no benefit to opting out of the class.
An example I frequently give is a case involving an illegal price fixing cartel who fixed the price of canned tuna. The three major manufacturers of canned tuna illegally colluded to increase the price. Attorneys filed class actions, the court granted class certification, and notices were sent to all direct purchasers of canned tuna (over-simplifying a bit here).
Assume the class period is 10 years – Individuals such as you and me may have bought one can of tuna a week for 10 years or around 500 cans of tuna during the class period. Assuming the overcharge is 10% and each can cost around $1, our damages would equal $50. It would not be beneficial in this instance to opt-out of the class.
However, if you are a large corporation such as a grocery store like Walmart, it may have purchased 50 million cans of tuna per year throughout the 10 year class period or 500 million cans. With a 10% overcharge, its damages are around $50,000,000 (before statutory trebling 3x). In this instance, it likely is beneficial for Walmart or large purchasers to opt-out of the class and sue directly.
You can learn more about Corporate Affirmative Recovery Programs here. An experienced class action and plaintiff lawyer can assess your claim and determine whether it is best for you or your corporation to remain in the class settlement or to opt out and sue direct.
Keibler Law Group has unique experience in representing class action opt out litigants and successfully recover significantly more for their clients than if they had stayed in the class. This decision to opt-out of the class is a case-by-case, fact specific determination that is based on the size of your claim, business relationships, and appetite for risk.
