Settlement FAQs

what does a class action settlement mean

by Miss Cierra Bradtke Published 2 years ago Updated 2 years ago
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A class action settlement is an agreement between the plaintiffs and the defendant after having worked out the issue outside the courtroom. Commonly, the defendant in a class action lawsuit offers the plaintiffs a settlement amount, which the plaintiffs can accept as full compensation, waiving their rights to sue in the future.

A class-action lawsuit settlement is the proceeds that are received from winning a class-action lawsuit. It is the monetary benefit paid out to the individuals that make up the class-action lawsuit.

Full Answer

How does a lawsuit become a class action?

A lawsuit becomes a class action through a process called class certification. To obtain certification, the court must find that: The named plaintiffs -- called the class representatives -- have the same claims and defenses as the others in the class; and. The class action lawyer and representative (s) will fairly represent the class.

Do I claim a class action settlement?

Class action settlements that offer compensation often require Class Members to submit Claim Forms in order to receive the benefits. Because every class action settlement is unique, it is important to follow the instructions provided by the Settlement Administrator. In some cases, Claim Forms will be mailed directly to Class Members.

What are the criteria of a class action lawsuit?

What Is The Criteria To Certify A Class Action Lawsuit? For a lawsuit to be considered as a class action, they have to be certified by a judge. It should meet the criteria to certify a “Class,” which includes: numerosity, which means the individuals in the class must be so many that every consumer standing as a single plaintiff will be impractical;

What is a class action lawsuit, and how does it work?

Class action lawsuits work by combining many claims into one. The intended purpose of doing so is to make the lawsuit process more quick and efficient for all involved parties. These cases only feature one judge.

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Why did I get a Notice of class action settlement?

If you received a class action notice in the mail, this simply means that your legal rights may be affected by a lawsuit that was recently filed or settled. Notices are sent to people whose rights could be affected by a class action.

Is it worth joining class action lawsuit?

In most cases, it is a good idea to join the class action if you believe you suffered injuries or financial losses caused by the defendant. We do recommend you give us a call and discuss your situation with one of our class action lawsuit attorneys before you make a decision, however.

What is the goal of a class action lawsuit?

Class action lawsuits provide legal relief to large numbers of individuals who were wronged by a corporation and only suffered relatively small monetary losses. Class action lawsuits are typically filed by one person or a small group of people on behalf of all those who were harmed in the same way ("class members").

What is the benefit of a class action lawsuit?

Class action lawsuits provide harmed people with many benefits, such as allowing large groups of similarly affected people to come together and file a lawsuit against the same company. This provides strength in numbers for all of the people harmed, typically by large corporations, or businesses that have a vast reach.

What are the risks of joining a class action lawsuit?

The risk of a class-action lawsuit is that if you lose, you will not receive any compensation for your injuries. If you win, however, you will receive a financial or other non-monetary award.

How much can you expect from a class action lawsuit?

A class action usually ends in a settlement as opposed to going to trial. Settlements in recent years have averaged $56.5 million.

What are the pros and cons of a class-action suit?

Pros And Cons Of Class Action LawsuitMore Strength as a Group. ... Your Lawsuit Charges are Significantly Less. ... Advantageous to the Judicial System. ... Guaranteed Settlements. ... Very Little Agency in the Matter. ... Class Action Lawsuits Take a Very Long Time to Settle. ... Class Action Lawsuits Cannot Be Reapplied To.

How does a class action work?

A class action is a type of legal proceeding in which one person (the plaintiff or applicant) brings a claim on behalf of a wider group of people who have been affected in a similar way, or by the same conduct.

What is an example of a class action lawsuit?

A common example is pharmaceutical fraud that results in the manufacture and distribution of a harmful drug that is used by many patients. Other injury examples include mass disasters such as social work or nursing home negligence, human rights violations, sexual abuse and sports litigation.

Should I cash a class action settlement check?

People have mixed feelings about class-action suits, and whether you cash class-action refund checks is up to you. Generally, if you get one, you probably paid a lot more in wrongful fees than you're getting back in the settlement. If you don't cash the check, the money may go back to the company.

What is Blue Cross Blue Shield settlement about?

The settlement resolves claims that the insurers violated antitrust laws by entering into an agreement not to compete with each other and to limit competition among themselves in selling health insurance, according to the BCBS settlement website. BCBS has denied all allegations of wrongdoing.

Do class actions cost money?

5.27 The costs of winning a class action also include the costs of settlement distribution, which are incurred after settlement approval. The scheme administrator charges a fee for assessing individual claims and distributing amounts to class members.

What are the pros and cons of a class action suit?

Pros And Cons Of Class Action LawsuitMore Strength as a Group. ... Your Lawsuit Charges are Significantly Less. ... Advantageous to the Judicial System. ... Guaranteed Settlements. ... Very Little Agency in the Matter. ... Class Action Lawsuits Take a Very Long Time to Settle. ... Class Action Lawsuits Cannot Be Reapplied To.

Can you make money class action lawsuit?

How Is a Class Action Lawsuit Paid Out? If your class action lawsuit is successful, you will receive a portion of the settlement or court award. Plaintiffs are paid by a lump-sum payment or a structured settlement. Smaller payouts are usually dispersed as a single payment.

What's the difference between class action and individual lawsuit?

A class action is a lawsuit where multiple individuals seek justice for an injury done to them by the same defendant. Instead of filing multiple individual lawsuits, the claims are consolidated into a single class action through a legal process known as certification.

What is BCBS settlement all about?

The settlement resolves claims that the insurers violated antitrust laws by entering into an agreement not to compete with each other and to limit competition among themselves in selling health insurance, according to the BCBS settlement website. BCBS has denied all allegations of wrongdoing.

When Are Class Action Settlement Checks Mailed?

Class action settlement checks mailed to recipients will include a specific figure divided by each participant. These are usually sent out around six to nine months after being submitted to the court for preliminary approval.

What happens if you receive a direct notice?

If this does occur and class action settlement checks are going to be sent, you’ll probably receive another notice informing you of the decision, especially if you received a direct notice initially.

How much money do you get from a class action lawsuit?

If you have received a class action lawsuit notice, you may have asked yourself the question, “How much money do you get from a class action lawsuit?” According to statistics derived by NERA Economic Consulting, average settlements in the past few years have been about $56.5 million. While this number sounds significant, the average class-action settlement per person isn’t as exciting. If you have a case where 30 to 50 million people are involved and the settlement amount is $10 million, lawyers will take a big chunk. The class action settlement checks mailed might be as little as just $.25 or a few dollars after what’s left of the settlement has been split up among each class member.

What is class action settlement?

What Is a Class Action Settlement? A class action lawsuit might be filed if a vehicle manufacturer used a faulty component in one of its cars, which negatively affected several people. Another example would be a banking or phone service conducting an unfair business practice against several of its customers.

Why do people file class action lawsuits?

Rather than filing individual cases, a person or group uses a class action lawsuit to seek retribution as long as specific procedural requirements are satisfied. Instead of going to trial, a large settlement amount, which may be worth millions of dollars, is paid to each class member when a case is won.

Can you receive direct notice of class action settlement?

You may also receive direct notice. If you want to make sure that you’re a recipient when the class action settlement checks are sent out, you may want to check for information related to settlements or current cases. Using a site like www.consumer-action.org can provide you with this type of information.

Can you opt out of a lawsuit?

Opting out of a lawsuit usually requires you to follow specific instructions included with the direct notice you received. You also have the choice of opting out and filing an individual lawsuit if you’d like. Regardless of your opting out, the class action suit will continue.

What Is the Purpose of a Class Action Lawsuit?

The purpose of a class action lawsuit is to provide compensation to a large number of people who suffered similar harm – either financial or physical – as a result of an illegal or wrongful act.

What is the federal tort claim?

Under the Federal Tort Claims Act, before you can file a lawsuit against the federal government, you (or your attorney) must submit a written claim to the federal agency that committed the negligent or wrongful act informing the government of your intention to sue and the amount of compensation you are seeking.

How long do you have to file a lawsuit after the government rejects your claim?

After the federal government mails its settlement offer or rejects your claim outright, you have six months to file a lawsuit. You are prohibited, however, from filing a lawsuit if the government has offered to pay the total amount of damages you requested in your claim letter.

Why do large companies file class actions?

Because large companies know their customers can band together and file a class action, these lawsuits serve to deter corporate wrongdoing.

What is the meaning of "negligently maintained property"?

Defective equipment or machinery owned and operated by the federal government. Negligently maintained property owned by the federal government, such as post offices, national parks and government buildings.

What was Live Nation's lawsuit?

The suit alleged that the company violated consumer protection laws when it added parking fees and other charges to the price of tickets purchased online for concerts at PNC Bank Arts Center in Holmdel, New Jersey. The lawsuit was filed by Michael Katz on behalf of himself and anyone else who incurred the allegedly illegal fees and surcharges.

Why are class actions important?

Class actions, by aggregating the legal rights of hundreds or even thousands of people, level the playing field between individuals and corporations. Because the settlements and verdicts in class actions can be quite large, this type of lawsuit provides a strong financial incentive for skilled attorneys to represent individuals in class actions.

What Is a Class Action?

A class action is a legal proceeding in which one or several plaintiffs bring a lawsuit on behalf of a larger group, known as the class. The judgment or settlement agreed to arise from the suit covers all members of the group or class, where penalties paid by the defendant are divvied up among class members.

What happened to Elon Musk?

Tesla Inc. ( TSLA) and its outspoken Chief Executive Officer Elon Musk were slapped with two class-action lawsuits over Musk’s series of tweets in the summer of 2018, where Musk tweeted out a plan to take the company private.

How many people are needed for a class action lawsuit?

The more people the better but even a group of 20 could be enough for a class-action lawsuit depending on the case.

What is the next step in a class action lawsuit?

The next step would be to file the complaint. The complaint will include all of the details regarding the class action, such as the individuals affected, the demands, the specific problem, and so on. The final step would then be a judge having to certify the class action based on all of the information provided.

What is class action contingency?

Lawyers typically take class action cases on contingency, collecting a percentage of any judgment or settlement fees make to plaintiffs. This practice has been scrutinized over the years because in some cases, legal teams’ payout can far exceed the amounts plaintiffs receive.

What is a civil rights class action?

Civil rights class action cases typically involve requests for injunctive relief, meaning legal remedies, instead of claims for payment. One of the most famous civil rights class actions is the Brown vs. Board of Education case the Supreme Court decided in 1954, which struck down school segregation as unconstitutional.

Why is it important to be certified as a class?

Being certified as a class can enable litigation to proceed more expeditiously and cost-effectively, particularly in cases pursued against large corporations. Because they reduce the costs of legal pursuit, class actions may provide the only means for some individual claimants to pursue their case.

Why Haven’t I Received My Settlement Check Yet?

Alright, so there you are, you filled out the form for a settlement you qualify for and now you’re waiting for that check to come in the mail. For a long time. This is fairly normal, and there are a few reasons why this might be happening.

What If I Lost/Threw Out the Notice?

So, if you lost your notice or threw it out, it’s probably not a big deal. Simply google the name of the settlement (for instance, Kashi cereal bar settlement), find the settlement website, and fill out the claim form . If the claim form requires information found on the settlement notice, such as an ID number, you’ll need to reach out to the settlement administrator to locate your number or to find out if you can submit a claim without this information.

What If I Moved and Already Made My Claim? Will I Still Get My Check?

If you move before receiving your money, contact the settlement administrator to see if you can update your address. Other than that, make sure you forward your mail to your new address.

Will I Get Paid Twice If I Fill Out Form Here and on Another Website?

This was a question we only received once. And while the answer may seem obvious, I can see where someone might think this is an option.

What If I Never Got a Notice?

If someone you know got a settlement notice for a case you believe you should be a part of – and you never got one yourself – it doesn’t necessarily mean you’re being left out.

What to do if you misplaced your settlement check?

If you misplaced your settlement check and the deadline to file a claim hasn't passed yet, your best bet is to contact the settlement administrator to find out if they can send you a new one. If the deadline has already passed, you may be out of luck – but I would still encourage you to reach out to the administrator, just in case.

Why hasn't my check arrived?

The most common reason why your check hasn't arrived is because the settlement agreement hasn’t been finalized yet. Before checks can go out, a judge needs to hear arguments for why the settlement should be approved and then needs to give his or her final OK that the agreement is “fair, reasonable and adequate.”.

What Are Class Action Lawsuits?

Class action lawsuits are often filed against government entities, financial institutions, manufacturers, retailers, or employers. Many are based on allegations of defective products, false advertising, discrimination, or unlawful employment practices. Some suits have even alleged that the defendant violated the Telephone Consumer Protection Act, which was enacted in 1991. 1 

What does a lead plaintiff need to show?

A lead plaintiff must demonstrate that the plaintiffs have a valid claim against the defendant and that all class members have similar claims. The lead plaintiff must also show that the suit can adequately represent all group members—all with the assistance of legal counsel, of course. The plaintiffs are notified by mail or other means after ...

What does class control mean in a lawsuit?

Class members cede control over the suit to the lead plaintiff and their attorney. Quality of legal representation affects all class members—if lawyer does a poor job, all members suffer. Plaintiffs may receive coupons or rebates instead of cash. Plaintiffs give up their right to sue the defendant independently.

How did the Class Action Fairness Act make it easier for defendants to move their cases to federal courts?

The Class Action Fairness Act made it easier for defendants to move their cases to federal courts by amending the requirement for diversity jurisdiction.

What is class action settlement?

Most class action suits are settled out of court. Each plaintiff receives a portion of the settlement, which can consist of cash, a refund, a service such as credit monitoring, or some other benefit.

What is a class of plaintiffs?

A group or class of plaintiffs is represented by one or more "lead" plaintiffs. The injuries suffered and the allegations alleged by the lead plaintiffs must be similar to those of the other class members. The class must be certified by a judge before the class action lawsuit can proceed. A lead plaintiff must demonstrate ...

How are plaintiffs notified of a class action?

The plaintiffs are notified by mail or other means after the class has been certified. All are automatically included in the lawsuit unless they opt out.

What is Included in a Notice of Class Action?

A class action notice is sent out to potential Class Members. The notice is meant to alert consumers that they may have been affected by this issue, and therefore may be eligible to join the class action lawsuit and pursue compensation. Until they get this notice, they may not even be aware that they have been affected by the defendant’s actions.

Can I Opt Out of a Class Action?

Class Members don’t have to accept the terms of the settlement. If they want, they can opt out.

Why Participate in Class Action Litigation?

Pursuing a class action suit can never take away the pain and suffering caused by these issues, but they can at least help you recover compensation, which can help with medical bills, lost wages, and more.

What does it mean when you receive a class action notice?

If you have already received a notice of a class action lawsuit, that means the parties and the court believe you qualify as a Class Member. You don’t need to do anything else to join the Class.

What does this mean for users?

Eligible TikTok users were notified of the potential for a payout via an in-app notification sent out Monday. Those that received a notification fall into two camps: those included in the nationwide group, and those included in the Illinois subgroup.

How to get paid

If you or someone you know is included in the 89 million users affected by the TikTok settlement, you’ll need to submit a claim by March 1, 2022, in order to receive any payment. If you are eligible but don’t wish to take part in the settlement, you can also submit an exclusion form.

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What Is A Class Action?

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A class action is a legal proceeding in which one or more plaintiffs bring a lawsuit on behalf of a larger group, known as the class. Any proceeds from a class-action suit after legal fees, whether through a judgment or a settlement, are shared among all members of the class.
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Understanding A Class Action

  • Class-action lawsuits represent groups of individuals who may be customers, employees, investors, or patients with a similar legal claim against one or more defendants. Lawsuits are certified by the courts with jurisdiction as class actions if they meet criteria spelled out in a legal rule known as Rule 23. The criteria include the existence of a class of claimants large enough th…
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History of Class Actions

  • U.S. courts standardized class action claims and expanded their scope in 1966 to help enforce court rulings declaring racial segregation in schools and public accommodations unconstitutional.1
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Benefits of Class Actions

  • Certification as a class can enable litigation to proceed more expeditiously and cost-effectively, particularly in cases against large corporations. Because they lower the cost of legal claims, class actions may provide the only means for some plaintiffs to pursue their cases. Individuals may also have a greater chance of successfully pursuing their claims against a defendant or defenda…
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Types of Class Actions

  • Types of class actions include securities litigation, civil rights proceedings such as school funding, and consumer product liability cases. Congress laid out additional rules for securities class-action lawsuits in the Private Securities Litigation Reform Act (PSLRA) of 1995.2 Successful class action cases often result in hefty pre-trial settlements. The lawsuit Enron shareholders file…
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Example: Elon Musk, CEO of Tesla vs. TSLA Shareholders

  • Tesla Inc. (TSLA) and its outspoken Chief Executive Officer Elon Musk were slapped with two class-action lawsuits over Musk’s series of tweets in the summer of 2018, where Musk tweeted out a plan to take the company private. His tweets said he was considering taking the electric car maker private for a share price of $420, which shocked Wall Street and sent Tesla stock surging.…
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The Bottom Line

  • Class actions are lawsuits brought to individuals or companies by plaintiffs on behalf of a larger group of people. Class actions seek to rectify damages incurred by the individuals in a class-action lawsuit, usually through monetary gain. Most class actions represent hundreds of people and the settlement is divided amongst the entire group, though not necessarily equally.
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