When to Take Money in a Class Action Lawsuit (and When Not to Take It)
A class action lawsuit has been filed by lingerie company Thinx over allegations that menstruation products contain harmful chemicals that could potentially cause fertility problems or cancer. Although Thinx denies these allegations, they offer the following options for people who filed a claim before mid-April : receive $7 cash compensation for a pair of up to three pairs; get 35% off one purchase up to $150; an object; exclude yourself from the settlement; or do nothing.
Thinx is n’t the only settlement available right now , and each offers different options and caveats. So how do you decide when a settlement is a bargain, or when you should wait if you want to act later?
When to take cash compensation in the calculation
If a settlement offers you money, taking it and ending the challenge may seem like the best bet. After all, $21 can buy a few new pairs of (cheap) briefs at a big box store. And if you go through the list of all class actions potentially available to you at any given time , you will see that in most (but not all) cases you will not receive a large amount of money, especially if you did not know that you were harmed.
Besides, money is money, and especially if you feel like no harm has been done, getting even a few dollars from a huge corporation can seem like a win. And, if you’ve been harmed and/or if you think the company is terrible, you feel it’s worth trying to confuse them, a penny at a time.
However, it is important to keep in mind that in almost all cases, you cannot subsequently sue the company if you take any monetary settlement. You may have to prove that the case or the defendant was a fraud, which is not easy to do.
Should you “object” to a class action lawsuit?
An objection may sound funny and dramatic, but you must say why you object. The American Bar Association says they anticipate objections and give them time before the final hearing. If enough people object, they need to return to the table.
In 2018 there were some changes to the rules of the procedural guide to objections that seemed to help “streamline” the process for the courts and possibly make it harder for anyone to waltz in there and yell about how they don’t like how things have gone downhill. The guidelines state: “You can ask the court to deny approval by filing an objection. You cannot ask the Court to order another settlement; The court can only approve or reject the settlement agreement. If the court refuses to approve, settlement payments will not be sent and the lawsuit will continue. If you want this to happen, you must object.” You will probably need to consult with a lawyer if you want to make any real changes to a decision that has already been made.
Should you “exclude” yourself from a class action lawsuit?
Excluding yourself and doing nothing are two different things. Excluding yourself is an action you take. It’s a big “no, thanks” to settlement proposals without a formal objection. You must file a claim and say that you have chosen to be excluded if you believe there is even the slightest possibility that you may wish to pursue your own legal action in the future.
For example, if you find out years later that Thinx underwear has done you more serious harm than you originally thought and you want to sue, you can only do so if you have excluded yourself from the settlement. To rule yourself out, you’ll probably need to provide proof of purchase, as you would if you chose to take cash, so you should have a receipt anyway.
To do nothing
You can, of course, do nothing and ignore the proposal for a settlement altogether. However, doing nothing does not allow you to bring the suit later. If you do nothing, you are effectively giving up the right to bring your costume in later, at least in accordance with the terms of the Thinx settlement.
To give people time to make a decision, the Class Action Fairness Act establishes a law that information about a settlement agreement worth more than $5 million must be widely distributed by mail, email and social media so that people have the opportunity to learn about it. . This is why you often receive what looks like spam or junk mail from companies telling you that you may be eligible for compensation. Sometimes you really could be.
In the end, this is a personal decision and the details will vary from case to case. Assessing your own risk and reward in making a decision can be an important decision, and especially if there is a large sum or other risk involved in the game, you may want to seek your own legal advice.