Guest Post – The Opt-Out Refund

Class Action Countermeasures features Adam Shulman's and his solution for settlements called the "Opt Out Refund."

Adam Schulman of the Center for Class Action Fairness spotted a new settlement tactic out in the wild that proved interesting enough to justify an exception. [Inevitable disclosure, since I have done some work for the Center, I have worked with Adam before.] So, without further ado, Adam:

The settlement agreement itself refers to this as an "Opt Out Refund." In multiple years of in depth analysis of class action settlements, I’ve never seen a provision like this. The most comparable term that would be fairly standard is a "walk-away" provision, whereby the defendant reserves the right to terminate an agreement if the number of opt-outs exceed a certain level

In conclusion, I view the "Opt Out Refund" as an innovative means to give opt-out rights greater active meaning, while at the same time achieving a synergy with defendants’ interests in paying less money. I don’t think the federal rules of civil procedure require this extra punch added to the right of opt-out, but it strikes me as a clever idea and a very positive development for the law of class action settlements.

Read the rest of the blog post at Class Action Countermeasures.