Class action lawsuits can have significant consequences, especially after a settlement is reached. These lawsuits allow people with similar complaints (called the “class”) to file a single case against a company or entity. This happens usually because of harm like defective products, misleading marketing, or unfair business practices. However, not all settlements are in the best interest of everyone involved. In some cases, the settlement terms may be dishonest, or too favorable to the defendant. Thus, if you believe the class action settlement isn’t fair, you have the right to object. But how exactly do you object to a class action settlement?
What is a Class Action Settlement?
First, let’s clarify what a class action settlement is. In a class action, a settlement occurs when the defendant (the person or company being sued) agrees to pay money or take specific actions to resolve the claims without admitting wrongdoing. This settlement affects everyone in the class unless they choose to opt-out. The settlement terms, which could involve monetary compensation, vouchers, or changes to company practices, are then submitted to the court for approval.
The court must determine whether the settlement is “fair, reasonable, and adequate” for the members of the class. However, if you are part of the class and feel that the settlement isn’t fair, you can object to it.
How to Object to a Class Action Settlement
Objecting to a class action settlement involves several steps, typically governed by Rule 23 of the Federal Rules of Civil Procedure or applicable state laws, such as Arizona’s civil procedure rules. Here’s a breakdown of how you might object to a class action settlement:
Find Out if You Are a Class Member
Before you can object to a settlement, you need to determine if you’re considered a “class member.” The class members are defined in the notice you receive about the class action. This notice usually comes by mail, but sometimes you might be notified by email, in newspapers, or through social media.
For example, let’s say you bought a product that turned out to be defective, and someone filed a class action. If you purchased that product during a specific period, you might automatically be included in the class. The notice will then provide details on how to object.
Review the Settlement Notice
The notice will explain the terms of the settlement, including:
- What the defendant has agreed to do
- How much money is being offered
- How it will be divided among the class members
- How to object, with a specific deadline
- Mailing address or email for submitting your objection
The settlement notice outlines your rights, including how you can object, opt out, or remain a part of the settlement. Pay attention to all the deadlines because courts enforce them strictly.
Prepare Your Written Objection
If you decide to object, you must submit a written objection. This is where you explain why you believe the settlement is unfair. Make sure to follow the guidelines in the notice, as they will explain the information the court needs. Usually, this includes:
- Your full name, address, and contact information.
- The name of the case and the case number (which will be on the notice).
- A clear statement saying that you object to the settlement.
- The reasons you object. Be specific about what you find unfair. For instance, you might feel that the compensation is too small compared to the harm caused or that the lawyers are getting too much of the settlement.
- Whether you plan to attend the court’s fairness hearing (more on this below).
For instance, the settlement is offering you a coupon for a future product purchase. However, you feel this doesn’t compensate for your actual financial loss; therefore, you should explain that in your objection.
Submit Your Objection on Time
After preparing your written objection, submit it by the deadline. The court will not accept late objections. The notice will also tell you where to send your objection, whether by mail or electronically.
Some courts allow objections by email, but most still require a physical letter. You can also send it by certified mail to ensure there will be a proof of receipt.
Attend the Fairness Hearing (Optional)
Courts typically hold a final approval hearing (or “fairness hearing”) to decide whether the settlement is fair, reasonable, and adequate. If you’ve filed an objection, you usually have the right to appear at this hearing. It gives you a chance to speak directly to the judge. Hence, you can personally explain why you believe the settlement is unfair. But, even if you do not attend, the judge will still consider your written objection.
Understand What Happens After the Hearing
After the fairness hearing, the judge will decide whether to approve the settlement or not.
- If the judge agrees with the objections, the court might reject the settlement or require changes to make it fairer.
- If the judge approves the settlement despite your objections, the settlement will proceed as planned. You still have the option to appeal, but this can be a more complicated and expensive process.
Common Reasons to Object a Class Action Settlement
When you file an objection, it’s important to have valid reasons for doing so. Some of the most common reasons include:
The Settlement Amount is Too Low
If you believe the compensation doesn’t reflect the damage done to class members, this can be a valid reason to object. For example, the settlement provides only $10 per class member, which is much less than the actual losses (let’s say, $200 per person). The objection highlights the disparity between the harm suffered and the relief being offered. If the settlement offers a disproportionately low amount compared to the actual damages, this may be unfair.
High Attorney Fees
In some class actions, attorneys may receive a large portion of the settlement as fees, leaving little for the actual victims. For instance, the total settlement fund is $30 million, yet the attorneys are requesting one-third of this amount, while each class member is only receiving $50. In this case, the percentage seems unreasonable compared to the actual work performed and the relief secured for the class. Thus, if you feel the attorney fees are excessive compared to what class members receive, you can object to this as well.
No Real Benefit to Class Members
Some settlements provide benefits that don’t help class members. For example, if the settlement offers store credits or coupons instead of cash, you might argue that this doesn’t truly compensate you for your loss. For example, you’re part of a class action against a tech company that sold defective smartphones. The company agrees to a settlement offering every class member a $50 gift card to use for future purchases, but you spent $500 on the phone, and it was unusable. In your objection, you could argue that the $50 gift card does not come close to compensating you for the damage and that a cash settlement would be more appropriate.
The Settlement Favors the Defendant
If the terms seem to let the defendant off too easily or allow them to continue harmful practices, you may feel the settlement is not in the best interest of class members.
Practical Tips for Filing Objections
- Be Specific: Identify the specific aspects of the settlement you are objecting to and explain why those aspects are unfair.
- Provide Evidence: Include documents or other evidence to support your claims, such as financial records showing your actual damages.
- Attend the Fairness Hearing (if possible): Even though you can submit your objection in writing, attend the hearing in person or virtually. This can allow you to make a more persuasive case directly to the judge.
Arizona-Specific Considerations
Arizona follows the same general federal rules for class action lawsuits. Therefore, the process for objecting is similar to that in other states. However, there may be specific state statutes or local court procedures that affect class actions in Arizona. So, always review the notice and consult a legal professional if needed.
Arizona courts, like federal courts, take objections seriously, but they must be well-founded and based on the fairness of the settlement, not personal grievances unrelated to the case. The goal of the court is to ensure that class members are treated fairly, but they rely on objections to highlight potential issues with a settlement. Class actions are meant to protect consumers, but sometimes the settlement terms fall short of that goal. Your objection might be the key to ensuring that the class, as a whole, gets a fair deal.
