A touch of class (action)
You've just been invited to join a class action lawsuit. Now what?
everything else that promises money for (nearly) nothing, you've got a little
homework to do.
things first. Pour yourself a super-caffeinated espresso and read the notice --
all of it. The first time through, just look for the basics: What is the action
about? Who are the plaintiff's attorneys? Why are you eligible?
Richard D. Freer, a professor at Emory University law school in Atlanta, two questions
are key: How much could you recoup? And how much are the plaintiff's attorneys
"[The notice] is in legalese, but if you read it
with those questions in mind, it will help," says Freer, who specializes
in civil procedure and complex litigation. Many times in more common class action
suits, the attorneys -- not individual defendants -- take the largest piece of
Often, Freer says, the invitations are not to join, but
to opt out of the class.
"The only reason you want to opt
out is if you're bringing your own suit," said Freer. "If you suffered
major damage, you probably will opt out."
But if the damage
-- and the potential reward -- is slight, then it makes more sense to remain part
of the class.
Know the class
Also, determine what kind of class action suit you are potentially joining. There
are two major categories, says Robert H. Klonoff, partner in the Washington, D.C.-based
firm Jones, Day, Reavis & Pogue and author of Class
Actions and Other Multi-Party Litigation in a Nutshell.
a settlement class, the lawyers on both sides have already reached a tentative
agreement, but a litigating class is headed for court.
questions? No wonder. Even lawyers have trouble plowing through some of the notices
that hit the mailboxes.
Judicial Center team, which included several lawyers, studied the language
of class action suit notices in the mid-'90s.
understand those things," said Thomas E. Willging, a senior researcher at
the center and a member of the team. "One of our conclusions was that they
are not decipherable."
As a result, the center drafted guidelines
to help lawyers prepare reader-friendly notices.
In spite of that,
class members still have trouble with the fine print. So do you need your own
attorney -- or your cousin who is in her third year at the local law academy --
to help you get through the process? The truth is, it's probably not worth it.
"It all depends on the size of your claim," Freer says.
If you're going to get a few hundred dollars, then it wouldn't
pay to have a lawyer look over the paperwork. But if you've been hurt in a severe
way, lost a loved one or sustained a personal injury, then you probably want your
own lawyer -- and your own lawsuit.
If the potential reward is
small, then you have to stay informed and read all the fine print -- not only
on the initial notice, but also on the release you will sign prior to getting
your check. Sometimes the reward won't be money at all, but discounts or coupons
for future purchases.
Even if there is money involved, you might
decide it isn't worth the hassle. Often, especially in large-scale actions with
the potential for many plaintiffs, the financial rewards are minuscule.
consumer adviser Clark Howard recently received his own invitation to a suit.
"I got the exciting news that I'm one of the claimants, and
I'm going to get a check for $6," says Howard, host of a nationally syndicated
radio show and co-author of Get
Clark Smart: The Ultimate Guide for the Savvy Consumer.
advice: Before you sign on the dotted line, make sure the reward is worth whatever
minutes you have to invest -- whether its reading through the legal forms or digging
up a receipt for a product that may be years old.
it's not going to be a scam," says Howard. "You just want to [make sure]
the money is worth your time."
So you read through the notice until your eyes glaze over,
and you still have a few questions. You also have a couple of options. First,
call the plaintiff's attorneys, Klonoff says.
is an (800) number [on the notice] to talk to the plaintiff's lawyers and ask
them what is going on," he says.
Things to ask: What is required
to be a class member? What do you have to do -- if anything -- to prove you're
in the class? What's the potential reward? And is this a settlement offer or is
the case headed for court?
Keep in mind too, says Freer, that
while the plaintiff's attorneys technically work for you, they may not be disinterested
Class members get to vote on accepting the proposed
Only when the settlement deal goes through does everyone's
lawyer get a check. In addition, many lawyers get paid based on how many plaintiffs
they sign -- giving the lawyers a valid reason to want you on board.
you're going to someone who's got every incentive in the world to make your fears
go away," says Freer.
Second, if you are not satisfied with
what you hear from the attorneys, Freer suggests you write a note to the judge
with any questions you might have. But you may or may not get an answer, and this
is not the best tact to take if you got your notice at the last minute.
I get stuck with the tab?
Real-life chances of a class member getting
stuck with the tab: "Close to zero," says Klonoff.
it's a settlement class, then by the time you are invited to participate, the
terms likely have been ironed out by all the involved parties, except for the
judge, says Freer.
If the judge doesn't approve the settlement
-- and if the case goes to court and the plaintiff loses -- theoretically, members
of the class could be called on to pay the lawyers. While it has happened in a
couple of cases, it's extremely rare. The vast majority of class actions are settled
out of court, and attorneys' fees are included in the settlement, says Freer.
Even in a litigating class, in the vast majority of cases the
plaintiffs' attorneys collect a fee only if they win, says Klonoff. At that point,
they are paid either as a percentage of the settlement or by the defendant separately.
"It is generally not a concern that a class member will personally
have to bear attorneys' fees, particularly in the absence of a recovery,"
Best advice, says Freer, do your own research and
"trust your own instincts."
is a freelance writer based in Atlanta.