What to do when you're in a class action
6Digest
The episode delves into the realm of class action settlements, starting with a personal anecdote about a Shutterfly settlement notice. It then provides a comprehensive overview of class action lawsuits, explaining their purpose, how they function, and the reasons behind their increasing prevalence. The episode examines a specific class action settlement involving Shutterfly, guiding listeners through the process of verifying the legitimacy of such notices. It discusses the nature of class action settlements, highlighting their tendency to be settled rather than going to trial, and explores the role of these lawsuits in consumer protection. The episode further examines the tactics employed by lawyers representing companies in class action settlements, focusing on strategies to minimize payouts and response rates. It concludes with advice on how to handle class action notices, emphasizing the importance of reading the notice carefully, meeting deadlines, and understanding the option to opt out.
Outlines
Class Action Settlements: An Introduction
The episode begins with a discussion about class action settlements, specifically focusing on an email received by the host about a settlement involving Shutterfly.
Understanding Class Action Settlements
The episode introduces the topic of class action settlements and how they work. It discusses the increasing number of class actions and the potential for individuals to receive money from these settlements.
The Dynamics of Class Action Settlements
The episode explores the nature of class action settlements, clarifying that they rarely go to trial and are usually settled. It discusses the reasons behind this, including the potential for high payouts and the risk of bankruptcy for companies.
Navigating Class Action Notices
The episode discusses the low response rates to class action notices and provides advice on how to handle them, emphasizing the importance of reading the notice and meeting deadlines.
Keywords
Class Action Lawsuit
A legal case where a group of people with similar claims against a company sue together. This allows for more efficient litigation and potentially larger payouts.
Settlement
An agreement reached between parties in a lawsuit to resolve the dispute without going to trial. Class actions often end in settlements, where the company agrees to pay a sum of money to the class members.
Claims Administrator
A third-party company that manages the distribution of settlement funds in class action lawsuits. They handle communication with class members, process claims, and distribute payments.
Nuclear Verdict
A large jury verdict, often in the millions or billions of dollars, awarded in a single-plaintiff lawsuit. These verdicts can significantly increase the stakes of litigation and encourage settlements.
Tank of Gas Rule
A rule of thumb used by lawyers to determine whether a settlement amount is worth claiming. If the amount is enough to fill up a car's gas tank, it might be worth the effort.
Response Rate
The percentage of class members who respond to a settlement notice and claim their share of the settlement funds. Lower response rates benefit companies as more money is returned to them.
Opt Out
The right of a class member to exclude themselves from a class action settlement. This allows them to pursue their own individual lawsuit or simply not participate in the settlement.
Q&A
What are the key steps to verify the legitimacy of a class action settlement notice?
Check the case name, confirm the notice was sent by a claims administrator, and search for news coverage of the settlement.
Why are class action lawsuits becoming more common?
The increasing number of class actions is attributed to a growing distrust of authority and the potential for large jury verdicts, which incentivize settlements.
What are some tactics used by lawyers representing companies in class action settlements?
Lawyers may try to minimize payouts, reduce response rates, and negotiate for shorter response deadlines to benefit their clients.
What advice would you give someone who receives a class action settlement notice?
Read the notice carefully, especially the bold scripted parts, make note of the return date, and don't miss the deadline. You can also opt out of the settlement if you're not satisfied with the terms.
Show Notes
Class action settlements are on the rise. And, on today's show, we're helping decipher the class action from the perspective of the average class member. How do class actions work? Why are these notices sometimes undecipherable? And, what do you stand to gain (or lose) by responding?
This episode was hosted by Kenny Malone and Nick Fountain. It was produced by James Sneed with help from Sam Yellowhorse Kesler. It was edited by Jess Jiang and fact-checked by Sierra Juarez. Engineering by Cena Loffredo. Alex Goldmark is Planet Money's executive producer.
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