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If I am notified that I'm a member of a proposed class-action lawsuit, could I opt out, wait to see how the class action lawsuit turns out, and file a claim if the plaintiff wins? It seems like this could be very useful for your case because you could simply point to that decision and say "what those lawyers said" (OK, maybe a bit more work, but you get the idea) and get a substantially larger payday than you could expect from a class-action victory.

I can think of a few ways this might fall down...

  • The proceedings and/or decisions aren't open to the public, or you can't attend in person. This seems unlikely given that it's not a largely personal matter, but there might be special rules around class actions.

  • The statute of limitations to file a claim might kick in before the class action is concluded. I don't know how long these cases usually take and what the statutes of limitations are around common causes for class action claims, but I'd be surprised if you had to file right away.

  • If it's against a large corporation, they might be able to bully an individual in ways that would be difficult to do against a team of lawyers fighting in a class action suit.

  • You might get a judge who disagrees with the other verdict. But my understanding is that judges will typically prefer to rule the same way given the same facts, provided the laws aren't too different.

Why wouldn't this work? Or does it work?

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Most class action litigation involves a whole mass of people who suffered minute injury, whereby it wouldn't be cost effective to bring individual suit. There are exceptions, as with every rule. So, for instance, (I'll use one I was involved in): BARBRI, who established the curriculum, study aids, and taught nearly all of the prep courses for the bar exams in every state, illegally colluded with Kaplan, who ran nearly all of the prep courses for the LSAT (the law school entrance aptitude test) to create unfair trade advantage by price fixing and agreeing not to offer each others' service, thereby creating a monopoly. Because of this, there was no way to cheaply prep for either of these major events – it was use BARBRI or Kaplan, respectively, or study without these invaluable classes/aids. They were expensive but necessary to excelling on these very important tests. It wasn't that they weren't great test prep courses, it was that they created an environment free of any competition where you were forced to pay whatever they were asking.

I got notice of class action, didn't opt out, and about 3 years later got a check for nearly $300. Perfect from my perspective. They taught me a ton, I did good on the LSAT and the Bar Exam and the money came at a perfect time. For those exceptions to the rule, opting out may be the best course of action, but as @nomen agentis noted, it does bar you from recovery as part of the class (although that is usually nominal) if you fail to bring private action, miss the statute of limitations, or fail to recover via settlement or trial award.

As a further example based on my experience with BARBRI/Kaplan: say you were a person who couldn't afford to take the bar prep course, and because of the price fixing and limit on competition (monopoly) couldn't find any other alternative review course. If you studied on your own, looked for alternative study aides/courses to no avail (there were literally no others) and then failed the bar exam, and you could show that because of this, it was more likely than not that it was the reason you failed, you might have a case individually, arguing that your quarter-million-dollar education was functionally meaningless without a license to practice, and you couldn't get a job that paid enough to repay the loans because you couldn't get a job, etc. This would be the type person to consider opting out.

Typically, these (the more injured person) are the people the attorneys search for who end up named as the representing party to the class, but not everyone can be a named plaintiff that suffered more than the nominal injury. Because of this, not everyone who had a more serious injury will be adequately compensated by the class action. These suits are meant to get a lot of people a little justice and to teach a lesson, not to get a few people largely compensated for substantial injury. They are also quite nice for the lawyers who make millions, because they get a percentage of the entire pie. But, if you suffer a serious injury for which a class action suit exists, then it would probably behoove you to opt out, after consulting with a lawyer.

It's important to understand that for most people it's more beneficial to be in the class. These are typically the type injuries that on the aggregate equal substantial injury, but individually, no lawyer would take on a contingency and it wouldn't be worth while to pay to litigate, as the recovery would be nowhere near the cost of the litigation/attorneys' fees.

If you are (like the example above) the odd individual who suffered a much greater injury than the remainder of the class, then opting out would not be wise. However, you don't automatically get more just because you sue individually, and there is no collateral estoppel or issue preclusion because you are suing on a different theory of damage. If you opt out, you start over. If you waited, you may benefit from any admissions in court, which can be used against them, but not any findings. However, a class suit will typically run much longer than an individual, so you would probably finish your suit before the class action concluded.

If you are the person who suffered substantial injury, when you get the class notice you should consult an attorney right away, to see if you have a provable case and if opting out is the right choice for you. Statute of limitations need to be examined, as well as other procedural things. Generally speaking, those other reasons for potentially opting out that are in the question are not typical considerations.

  • I think this answers my question - basically, it boils down to the fact that the typical award one could expect litigating individually isn't much larger than the typical payout from remaining in the class. So, unless you believe you suffered an exceptional amount of damage, there's no reason to opt out. Makes sense. – Patrick87 Oct 6 '15 at 14:06
  • Yes, that's exactly right. Honestly, in a class action it's really the corporations that pay, more as a punitive model (although it's not characterized as such, often) and the lawyers that make out. The en mass of litigants get very little individual recovery and would never, practically speaking, be able to sue individually. But, if you suffered a major damage arriving from the same negligence the class arrises from, your first step would be to contact either the class counsel and see if they want to take you named separate or as the class named, or contact your own attorney and opt out. – gracey209 Oct 6 '15 at 14:14
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There are three reasons your plan to opt out, then piggyback on the original claim, won't work.

  1. As one of the other answers explains in more detail, usually in a class action each individual's recovery is too small to be worth pursuing.

  2. If the court does accept the previous liability decision, if will probably also accept the previous decision on damages, meaning you won't recover anything extra by suing individually.

Most importantly:

  1. Most successful class action awards are settlements, not verdicts. If the case settles after you opt out, you won't get the benefit of the settlement, and you'll need to relitigate liability, since a settlement doesn't resolve any of the issues in dispute.

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