Should You Opt Out of a Class Action Settlement?

Class action settlements

Class action lawsuits are a common way claims against vehicle manufacturers are resolved. When many consumers have experienced the same defect with one specific vehicle model, it is often easier for one case to be heard, rather than for courts to hear the claims of numerous plaintiffs. However, being bound to the terms of class action settlements isn’t always beneficial for every consumer.

If you received a class action notice, it’s essential to weigh your options carefully. Depending on your specific circumstances, it may be best for you to opt out of the class action settlement and file a separate claim if you meet the California lemon law criteria.

What is a Class Action?

A class action can be filed when there is an issue affecting many cars of the same model. In a vehicle class action, a lead plaintiff — also known as the class representative — will commence a lawsuit on behalf of vehicle owners who have been financially harmed and inconvenienced by the same defect. Typically, owners are made aware of a class action lawsuit when they receive a Notice of Class Action Lawsuit. They are also subsequently notified of any settlement by mail and must opt out if they do not wish to be part of it.

Does a Class Action Mean My Vehicle is a Lemon?

Even if a class action has been filed that affects your vehicle, it doesn’t necessarily mean you have a lemon car. Significantly, there are specific criteria that must be met in order for your car to legally qualify as a lemon. Importantly, your vehicle must still be under the manufacturer’s warranty to assert your rights under California’s lemon law.

You must also have allowed the authorized dealership to make a reasonable number of unsuccessful repair attempts to bring a lemon claim. Generally, four repair attempts are sufficient for most defects. But if the vehicle has an issue that presents a serious safety hazard, only two repair attempts are necessary. You may also be able to invoke the lemon law if your car was in the repair shop for 30 days or more.

What are the Benefits of Opting Out?

It’s important to understand that unless you specifically opt out of a class action settlement, you will be included as a member of the class. In other words, even if you don’t act, you would be bound by the terms of the settlement. By opting out of a class action settlement, you preserve your right to assert an individual claim against the manufacturer under California’s Lemon Law

Class action settlements often don’t compensate consumers adequately for the issues and problems they experienced with their vehicles. Generally, the monetary recovery you would obtain in a class action settlement is nominal. However, if you satisfy the lemon law criteria and opt out of a class action settlement, in addition to a replacement vehicle or refund, you may obtain:

  • Out-of-pocket repair costs
  • Towing costs
  • Rental car expenses
  • Attorney’s fees
  • Court costs
  • Incidental damages

If your financial losses were substantially more than those of other class action settlement members, it may be best to opt out and pursue a lemon law claim in court. Otherwise, you will receive the same portion of monetary recovery as the other members of the class, despite your actual economic damages.

Should You Opt Out of a Class Action Settlement?

If your car is still under the original manufacturer’s warranty, and the defect raised in the class action lawsuit substantially impairs the vehicle’s value or safety, you might consider opting out of a class action settlement.

In the event that your vehicle is still covered by the warranty, you may be able to maximize your compensation by filing an individual lemon law claim. In doing so, you could potentially be entitled to your choice of a repurchase or a replacement vehicle. But if your vehicle doesn’t qualify for a remedy under the lemon law, remaining in the class could allow you to recoup at least some of the costs of repairs.

When you receive a notice of settlement regarding a class action, you can also object to the settlement in writing if you wish to remain in the class but dislike something about the terms. You may also attend the Fairness Hearing in court for the class action settlement and have an opportunity to speak.

Contact a Southern California Lemon Law Attorney

If you received notice of a class action settlement regarding your vehicle, it’s a good idea to speak with a knowledgeable lemon law attorney to learn what your legal rights are and find out whether you can file a lemon law claim. But it’s important not to delay. When it comes to class action settlements, you only have a limited amount of time to opt out. Otherwise, you will lose your chance to file a future claim against the manufacturer. The lemon law attorneys at the Ledbetter Law Firm can assess your claim and discuss which option may be best for you.

The Ledbetter Law Firm assists clients throughout Southern California who have purchased lemon vehicles in obtaining the refund or replacement they deserve from the manufacturer. With offices conveniently located in Torrance and San Diego, California, telephone and video conferencing options are also available. Call (310) 507-7022 to schedule a consultation with a California Lemon Law attorney today.