This Class Action Opt Out Process Should be Illegal

[kylealden]

I think folks are misunderstanding the reasons you'd opt out of a class action lawsuit, which largely explain why it's not opt-in.

The system is designed to maximally include members of the class as much as possible, on the assumption that if the defendant is found liable, as many wronged class members as possible will receive their share of the award. The burden should not be on individual consumers to actively police every company they've ever done business with for lawsuits to figure out if they are eligible for compensation - the whole premise of a class action suit is to streamline those many claims into one and increase efficiency while improving the likelihood that an individual will be able to get paid.

If you think it's frivolous, that's fine - just don't do anything, don't collect your payment if one is awarded, etc. Kind of silly (it's on the judge to determine if it's frivolous), but your prerogative.

The reason you'd opt out is if you want to pursue your own lawsuit. The system is designed to prevent a class action suit from impairing your own individual right to seek justice, but to do that, you have to waive your right to be a member of the class. Basically, if you think you can get more money, or have a better chance of success, going your own way, you can do so - someone else suing can't remove your right to sue - but that's not compatible with also being a member of the class.

To reconcile these goals - maximizing the ability of people to be in a class while ensuring your individual rights aren't impaired by the class - opt-out really makes the most sense.

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[Donald Stanfield]

If you're saying that because you don't agree with the basis underlying class action itself (or feel that class actions shouldn't exist), then that's fine. But if you're thinking this would make class actions more equitable and effective, that would likely not be the case. Requiring express opt-in to class action would effectively destroy it as a viable litigation path.

Why? I think the auto-enrollment companies are doing these days should be illegal across the board. If the class action is legitimate and the party feels aggrieved, there's no reason for them not to opt in. What's the point of consent if we don't apply the concept universally?

You have to agree to medical procedures before a doctor will do one, my company cannot sign you to my marketing/email lists without obtaining your enrollment and numerous other things work on a mandatory consent principle. I cannot understand why class actions need to operate outside of that principle.

 

[Donald Stanfield]

I think folks are misunderstanding the reasons you'd opt out of a class action lawsuit, which largely explain why it's not opt-in.

The system is designed to maximally include members of the class as much as possible, on the assumption that if the defendant is found liable, as many wronged class members as possible will receive their share of the award. The burden should not be on individual consumers to actively police every company they've ever done business with for lawsuits to figure out if they are eligible for compensation - the whole premise of a class action suit is to streamline those many claims into one and increase efficiency while improving the likelihood that an individual will be able to get paid.

If you think it's frivolous, that's fine - just don't do anything, don't collect your payment if one is awarded, etc. Kind of silly (it's on the judge to determine if it's frivolous), but your prerogative.

The reason you'd opt out is if you want to pursue your own lawsuit. The system is designed to prevent a class action suit from impairing your own individual right to seek justice, but to do that, you have to waive your right to be a member of the class. Basically, if you think you can get more money, or have a better chance of success, going your own way, you can do so - someone else suing can't remove your right to sue - but that's not compatible with also being a member of the class.

To reconcile these goals - maximizing the ability of people to be in a class while ensuring your individual rights aren't impaired by the class - opt-out really makes the most sense.

There are many reasons to opt out of a class action, not just to sue yourself. Since you need to be notified that you are part of the class, that notification could easily be replaced by a request to opt into it. If people want to join they can, auto enrollment in anything should be banned.

 

[CharonPDX]

This is just how class actions work. The entire idea is that (for non-frivolous ones) they're repressing *ALL* impacted people, whether they know it or not. Because in most (again, non-frivolous) cases, it is better for everyone to be part of the same class. But if you want to individually sue, you can opt yourself out. (That's the normal reason for opting out - because you don't want to be a part of the class, you want to pursue legal action yourself.)

So they have to make sure they know exactly what you're opting out of. In this one, they're asking for all your purchase lots to make sure you don't opt out of one lot to sue directly, but stay in the class for your remaining lots. (Although I have a feeling most opt outs will be like yours.)

I'm not going to bother. And if I get any money from it, I'll just buy more Rivian stock with it. (Which I did with a previous similar class action against another EV company I invested in the IPO of. Sadly, that one is on bankruptcy's door now, although the class action had nothing to do with it.)

 

[ElGuano]

There are many reasons to opt out of a class action, not just to sue yourself. Since you need to be notified that you are part of the class, that notification could easily be replaced by a request to opt into it. If people want to join they can, auto enrollment in anything should be banned.

The short answer is that our legal system considers a commercial marketing campaign to be very different from a state-approved legal mechanism for redress, which is what a class action is.

But my point remains that without an easy way to establish a large class, the harm that we as a society seek to remedy likely won't in a "steal a little bit from a lot" situation. Also, don't forget that in a class action, a judge must certify the class for it to proceed, meaning it has to pass muster under a test of legal elements as a legitimate claim, it's not just law firms deciding unilaterally to spam whoever and whatever they want (though the effect to end consumers getting unsolicited emails may definitely seem that way!).

 

[Donald Stanfield]

The short answer is that our legal system considers a commercial marketing campaign to be very different from a state-approved legal mechanism for redress, which is what a class action is.

But my point remains that without an easy way to establish a large class, the harm that we as a society seek to remedy likely won't in a "steal a little bit from a lot" situation. Also, don't forget that in a class action, a judge must certify the class for it to proceed, meaning it has to pass muster under a test of legal elements as a legitimate claim, it's not just law firms deciding unilaterally to spam whoever and whatever they want (though the effect to end consumers getting unsolicited emails may definitely seem that way!).

Why would an opt in system be harder to establish the class? I have seen a few class actions take this tactic like the one against Facebook so it’s not unheard of.

 

[ElGuano]

Opt-in conversion rates are orders of magnitude lower than opt-out. When determining damages *against the class,* it would much harder to establish the population of claimints that make it worth the effort for such a private attorneys general model.

And also,defendants need finality. Having a large and full settlement for a legitimate claim allows them to clear the books and move on after the judgment (the few straggling opt-outers aren't as big of an issue in such case), whereas multiple tiny classes advancing slightly different theories subjects them to the same potential for unending litigation as individual actions would do.

 

[ThirteenElectrics]

Forfeiting your rights under the law is always going to be a formal process. Most of these lawsuits are complete BS, but unregistering yourself is unlikely to stop or slow them, unfortunately. Class actions are efficient but there needs to be a mechanism to discourage frivolous lawsuits.

 

[SANZC02]

Here is my problem with a class action, even if it is determined to be frivolous, the company being sued still waste resources as rarely does the law firm bringing the action have to pay the companies legal fees.

The lopsided payouts are simply ridiculous. Take the pending Apple (Siri) pending settlement. The pending settlement is 95 million, the law firm bringing the action wants 30% for expenses that leaves 66.5 million for customers. Apple sold 2.5 billion iPhones between 2014-2024, payout is based on who places a claim, if only 25% of eligible iPhone users respond that is $9 per device and that does not count other eligible Siri devices.

If the reason for these actions are to penalize companies for actual bad behavior that is not a bad thing, but for a law firm to be so enriched by the process invites firms to bring these suits hoping to have them settled. Limit there payout to actual verified expenses and maybe 5% of the remaining amount then put the rest towards something that benefits society like road repair funds or towards the national dept.

 

[Donald Stanfield]

Opt-in conversion rates are orders of magnitude lower than opt-out. When determining damages *against the class,* it would much harder to establish the population of claimints that make it worth the effort for such a private attorneys general model.

And also,defendants need finality. Having a large and full settlement for a legitimate claim allows them to clear the books and move on after the judgment (the few straggling opt-outers aren't as big of an issue in such case), whereas multiple tiny classes advancing slightly different theories subjects them to the same potential for unending litigation as individual actions would do.

I concede that the rates would be much lower; I don't see this as bad. If the claim is legitimate, people will opt in. The stronger the claim, the greater the harm, and the more likely people will opt in. I think opt in would discourage lawsuits on the margins of useful and discourage ambulance chasers from fabricating cases.

Here is my problem with a class action, even if it is determined to be frivolous, the company being sued still waste resources as rarely does the law firm bringing the action have to pay the companies legal fees.

The lopsided payouts are simply ridiculous. Take the pending Apple (Siri) pending settlement. The pending settlement is 95 million, the law firm bringing the action wants 30% for expenses that leaves 66.5 million for customers. Apple sold 2.5 billion iPhones between 2014-2024, payout is based on who places a claim, if only 25% of eligible iPhone users respond that is $9 per device and that does not count other eligible Siri devices.

If the reason for these actions are to penalize companies for actual bad behavior that is not a bad thing, but for a law firm to be so enriched by the process invites firms to bring these suits hoping to have them settled. Limit there payout to actual verified expenses and maybe 5% of the remaining amount then put the rest towards something that benefits society like road repair funds or towards the national dept.

This is another issue with class action suits. The only people who win are the lawyers; it isn't the private sector's job to punish bad actors. That's what we are supposed to have elected officials for. If a company does something unethical, it should be the government bringing legal action and levying fines, NOT some law firm looking to get rich. The problem with monetary penalties is that no matter who is involved, there is an incentive to succumb to greed.

 

[SASSquatch]

I'm conflicted because as a shareholder I have been impacted significantly by the loss in value of Rivian shares over the period stipulated in the class-action. I think Rivian, like any entity, needs to be held accountable if they willfully mislead shareholders about the state of the company and their reservation numbers. If people made financial decisions (like me) based on incomplete or even false information, Rivian should be held accountable.

At the same time, I am pro Rivian and I want to see them succeed in the long term. They are at a very vulnerable time in their young existence and a huge penalty might sink them.

 

[SASSquatch]

I concede that the rates would be much lower; I don't see this as bad. If the claim is legitimate, people will opt in. The stronger the claim, the greater the harm, and the more likely people will opt in. I think opt in would discourage lawsuits on the margins of useful and discourage ambulance chasers from fabricating cases.



This is another issue with class action suits. The only people who win are the lawyers; it isn't the private sector's job to punish bad actors. That's what we are supposed to have elected officials for. If a company does something unethical, it should be the government bringing legal action and levying fines, NOT some law firm looking to get rich. The problem with monetary penalties is that no matter who is involved, there is an incentive to succumb to greed.

Pay the man! The lawyers rack up outrageous fees and are always the real winners.

 

[SoCal Rob]

I'm conflicted because as a shareholder I have been impacted significantly by the loss in value of Rivian shares over the period stipulated in the class-action. I think Rivian, like any entity, needs to be held accountable if they willfully mislead shareholders about the state of the company and their reservation numbers. If people made financial decisions (like me) based on incomplete or even false information, Rivian should be held accountable.

At the same time, I am pro Rivian and I want to see them succeed in the long term. They are at a very vulnerable time in their young existence and a huge penalty might sink them.

I think that a lot of people ignored the risk associated with an IPO. To make matters worse, I suspect that Rivian’s costs were constantly changing given the supply chain chaos caused by the pandemic. I’m sure there are more than a few investors who would rather blame Rivian than take responsibility for their own decisions or allow for the unprecedented circumstances around the time Rivian was starting production.

 

[KidThunder]

I feel like Rivian folks look at reddit more than this forum so you might post this there as well. I would also opt out if it wasn't a pain in the ass. Just in case they want some examples of shareholders that do not feel the same as the litigants.

 

[SASSquatch]

I think that a lot of people ignored the risk associated with an IPO. To make matters worse, I suspect that Rivian’s costs were constantly changing given the supply chain chaos caused by the pandemic. I’m sure there are more than a few investors who would rather blame Rivian than take responsibility for their own decisions or allow for the unprecedented circumstances around the time Rivian was starting production.

Lots of factors go into investing, especially with an IPO. No argument there. If Rivian is guilty of what the class action is claiming, then they mislead investors with information that investors would have had to rely on when deciding to make that investment.

Every investment carries with it risk. Early on there was a huge surge in the stock price likely driven by FOMO and I'm sure many got swept up in that.

I invested in Rivian because I believed in the company. I was an early investor in Tesla and believed in that company up until EM turned into a complete psycho whose current positions (and the friends he keeps) are at odds with the principles he founded Tesla with. I sold last year at a time when the stock was fairly low and walked away with much less profit than I could have but I simply don't believe in the company any more.

I bought Rivian and continue to buy Rivian because I believe in the company and its mission and think RJ is a much better reflection of the type of CEO I would want to support with my investment dollars.

I'm in it for the long haul and want Rivian to succeed. If opting out wasn't so arduous I would do so on principle, but, ultimately if they were in the wrong they need to be held accountable, learn from that, and not repeat those mistakes in the future.

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