How to opt out of or object to a class action settlement

Both rights come from Federal Rule of Civil Procedure 23. Under Rule 23(c)(2)(B), the notice in a damages class action must tell members that the court will exclude anyone who requests exclusion, the time and manner for doing so, and that a class judgment binds everyone who does not. Objection rights come from Rule 23(e)(5), which lets any class member object to a proposed settlement.

The Supreme Court tied the opt-out right to due process in Phillips Petroleum Co. v. Shutts (1985), holding that absent class members in a damages case must receive notice, an opportunity to be heard, an opportunity to opt out, and adequate representation. See can you be bound by a class action settlement for what that means if you do nothing.

Opting out is rare, and for most people it is not worth it. In the FTC's 2019 study of 149 consumer class action settlements, just 0.01% of notice recipients excluded themselves. Consider opting out if:

• Your losses are much larger than the settlement pays. For example, a data breach settlement that caps documented losses at $5,000 when you lost $30,000 to identity theft, or a product case where you suffered a physical injury.
• You already have your own lawsuit or arbitration against the company over the same conduct.
• The release is broader than the benefit, for instance, it gives up claims you care about in exchange for a coupon.
• A statute gives you strong individual damages, such as per-call damages under the TCPA when you received many calls. See how much you can get from a TCPA lawsuit.

Opting out has costs. You give up a sure payment, and you will need to prove your case yourself or find an attorney willing to take it. Check your statute of limitations right away. The filing of a class action generally pauses the limitations period for class members under American Pipe & Construction Co. v. Utah (1974), but that pause ends once you leave the class, and in China Agritech, Inc. v. Resh (2018) the Supreme Court held the pause does not allow a new class action to be filed after the deadline. Our guide on class action vs. individual lawsuit compares the paths.

Every settlement sets its own procedure, so follow the notice exactly. Most require the following.

1. Find the deadline. The opt-out (exclusion) deadline is in the notice and on the official settlement website. Mailed requests usually must be postmarked by that date.
2. Write a signed request. Include your full name, address, phone or email, the case name and number, and a clear statement such as "I want to be excluded from the settlement class." Many notices require your personal signature, not a lawyer's.
3. Include any required details, like your notice ID, account number, or the dates you bought the product.
4. Send it the required way. Some administrators accept online exclusion forms; others require mail. Keep a copy and proof of mailing.
5. Do not also file a claim. A claim and an exclusion request send conflicting signals about your choice, so check the notice for how the settlement treats both.

An objector stays in the class and asks the judge to reject or change the settlement. Common grounds include payments that are too small compared with the claims released, attorneys' fees that are too high, unequal treatment of class members, a confusing claims process, or cy pres payments that replace direct payments to the class.

Under Rule 23(e)(5)(A), an objection must state whether it applies only to the objector, to a specific subset of the class, or to the entire class, and must state its grounds with specificity. A typical objection includes:

1. The case name and number.
2. Your name, address, and proof or a statement that you are a class member.
3. Every reason for the objection, with any supporting documents.
4. Whether you or a lawyer plan to speak at the fairness hearing.
5. Your signature, and the signature of your lawyer if you have one.

Send it to the addresses in the notice (often the court, class counsel, and defense counsel) by the objection deadline. You do not need a lawyer to object, though you may hire one at your own expense. You can also object only to the fee request; Rule 23(h) specifically lets class members object to a motion for attorneys' fees. See who pays the lawyers in a class action.

The judge must consider timely objections before deciding whether the settlement is "fair, reasonable, and adequate" under Rule 23(e)(2). Objections sometimes lead to real changes, such as lower fees, a simpler claim form, or more money for the class, but most settlements are approved. The FTC's 2019 study found that only 0.0003% of notice recipients objected, roughly 3 people per million.

If the judge approves the settlement over your objection, you are still in the class and can collect your share if you filed a claim. In Devlin v. Scardelletti (2002), the Supreme Court held that class members who timely object at the fairness hearing may appeal the approval without first intervening in the case. Appeals delay payments to everyone, which is why courts watch for "professional objectors." Under Rule 23(e)(5)(B), no one may pay an objector to withdraw an objection or drop an appeal unless the court approves the payment after a hearing.

Whichever option you choose, act before the deadline. Browse open settlements to see current deadlines, and if you are weighing an opt-out because your losses are large, a free case review takes about two minutes.