In a class action lawsuit, one person or a small group of people file a lawsuit on behalf of a larger group of people who have suffered a similar injury or financial harm.
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In some cases, a lawsuit filed by one individual can affect hundreds of thousands of individuals. When a judge determines that the case can move forward as a class action or when a case settles, the attorneys working on the case will send a class action notice to anyone whose legal interests might be affected by the suit.
These individuals are known as "class members" and are represented by the class action because they have suffered harm similar to the person who filed the suit. The notice, which will outline the allegations made by the suit, will also inform potential class members of their right to "opt out" of the suit.
At A Glance
If you choose to opt-out of a class action, you will not be able to claim part of any settlement funds or court award that results from the case.
Before opting out, you may want to talk to an attorney. He or she can help you weigh the pros and cons of opting out of a particular lawsuit.
Why Opt Out of a Class Action Lawsuit?
Keep in mind that you can't get in trouble for participating in a class action. You may want to opt out of a class action and file your own lawsuit, however, if you suspect you suffered substantially more than the typical class member.
You own a defective dishwasher that is prone to fires due to faulty wiring. A class action notice is sent to all consumers who purchased the dishwasher during the last four years and informs them of the lawsuit, as well as their right to "opt out" of the case. The lawsuit is seeking compensation for repair costs so that each class member can fix the defect.
Why You Might Want to Opt Out:
If your house burned down because of the defect, you may want to opt out of the class action if it is only seeking compensation for the cost of repairing the defective dishwashers – and not any related damages. By filing your own lawsuit, you may be able to obtain compensation for the costs associated with rebuilding your house.
If you opt out, keep in mind that the class action will proceed without you and you will not be able to claim any part of the final judgment or settlement obtained by the class action.
Why You Might Not Want to Opt Out:
If, on the other hand, you purchased the defective dishwasher, but it did not cause any damage to your house, you may want to remain a class member. Should the suit resolve in favor of the class members, you would be able to claim part of the final settlement or judgment. Even if you did suffer more harm than the average class member, you may also want to remain in the class action if you do not want to spend the time and money hiring an attorney to file your own lawsuit.
Why You Should Talk to a Lawyer Before Opting Out
A Lawyer Can Help You Weigh the Pros and Cons:
If you are considering opting out of a class action, it is important to speak to a lawyer to discuss whether the potential benefits of filing an individual lawsuit outweigh the benefits of remaining a class member.
A Lawyer Can Inform You of Deadlines for Taking Legal Action:
In addition, a lawyer can let you know if you are prevented from filing your own lawsuit because of a statute of limitations. (A statute of limitations imposes a time limit in which certain types of lawsuits may be filed.)
In many states, a lawsuit involving a defective product must be filed within two years of the date in which the defect was discovered. If the class action was filed within the two-year statute of limitations, it is possible that you would be prevented from filing your own lawsuit if you discovered the defect more than two years ago. Statutes of limitations vary from state to state, so it is important that you speak to a lawyer to make sure you are not time-barred (or blocked) from filing your own lawsuit.
When Can You Opt Out of a Class Action?
In general, you can opt out of any class action. The class notice will state the deadline for opting out of the lawsuit. In most cases, you will have to notify the attorneys handling the case in writing of your decision to opt out.