Simple English definitions for legal terms
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An opt-out class is a group of people who have a common legal position and are certified under Federal Rule of Civil Procedure 23(b)(3). Members of this class can choose to exclude themselves if they do not want to be bound by the decisions or settlements reached in the case. This means that they can wait until the settlement's terms are announced before deciding whether to opt out or not. Settlement classes are similar to opt-out classes, but they involve a contract specifying the payment terms for the class members' claims in exchange for the release of all claims against the adversary.
An opt-out class is a type of plaintiff class that is certified under Federal Rule of Civil Procedure 23(b)(3). This class allows members to choose whether or not they want to be bound by the decisions or settlements reached in the case. Rule 23(e) permits courts to dismiss class members who request exclusion. Class members may wait until the settlement's terms are announced before choosing to opt out.
For example, in a class action lawsuit against a company for discrimination, the opt-out class would include all the plaintiffs who are suing the company. Each plaintiff would have the option to exclude themselves from the class if they do not want to be bound by the decisions or settlements reached in the case.
Another example of an opt-out class is a settlement class. This class includes numerous similarly situated people for whom a claimant's representative and an adversary propose a contract specifying the payment terms for the class members' claims in exchange for the release of all claims against the adversary. During the 1980s and 1990s, mass-tort defendants began using settlement classes as a means of foreclosing claims by some unknown number of existing and future claimants.