Should you opt out of a class action settlement?
For a variety of reasons, vehicle owners who have received notice that their automobile is included in a class action case may wish to consider opting out the class action lawsuit or settlement.
When a class action lawsuit is filed, one of the first steps taken by the court is to certify the class. The class includes vehicle owners whose automobiles share a common defect during a specified period of time, for example, all customers who owned or leased a certain make, model, and year vehicle.
Because of the broad nature of how a class is defined, the number of vehicle owners involved in the class may include thousands or tens of thousands of individuals. Manufacturers who are involved in a class action lawsuit are required to inform proposed members of the class about the case in order to give them the ability to opt out, should they so desire.
Reasons for Opting-Out of a Class Action Settlement
The most common reason that owners of defective vehicles opt out of a class action case is because they wish to preserve their right to file an independent lawsuit against the manufacturer of their vehicle, which independent lawsuit may produce a higher recovery.
In order to receive a class action settlement, manufacturers usually require members of the class to waive their right to bring future claims involving the defects in their automobile that were the subject of the class action claim. By opting out, owners of defective vehicles preserve their right to file an independent lawsuit in the future against the manufacturer of their vehicle.
Another common reason for opting out of a class action settlement is because vehicle owners believe they have suffered more severe harm or different harm than other members of the class.
Some states have stronger consumer protection laws that could entitle vehicle owners to pursue greater damages that what is being offered in the proposed class action settlement. For example, the damages recoverable by vehicle owners who are protected under the California lemon law, which allows for civil penalties and attorney fees in addition to the cost of repairing or replacing the vehicle, could be substantially higher than those allowed for under a class action settlement.
Deciding to Opt-Out of a Class Action Settlement
The notice that owners receive notifying them of the class action lawsuit or settlement will include a date by which they must notify the court of their decision to opt out. Vehicle owners must inform the court of their decision to opt out of the settlement, usually in the form of a written notice, the nature of which is specified in the settlement notice they received.
Usually, vehicle owners who do not opt out will be automatically included in the class action lawsuit, and any settlement that is awarded by the court.
If you have received notice of a class action lawsuit or settlement, and believe that you have suffered different harm or more severe harm than other members of the class, or if you wish to preserve your right to file an independent lawsuit against the manufacturer of your vehicle, it may be worthwhile to opt out of the settlement.