The Role of Opt-Outs and Objectors in Class Action Litigation: Theoretical and Empirical Issues

Abstract

This article analyzes a data set of reported decisions from 1992-2003 in which the number of opt-outs and/or objectors to class action settlements was quantified. The numbers of opt-outs and objections were uniformly low and in some cases nearly trivial. On average, less than 1% of class members opt-out and about 1% of class members object to class-wide settlements. Civil rights and employment discrimination class actions have relatively higher objection rates, but even these are less than 5% of the class. Securities, antitrust, and consumer class actions have the lowest rates of dissent. Dissent rises with the average recovery per class member and falls as a percentage of the class as the size of the class increases. Dissent is not correlated with the attorneys fee as a percent of the class recovery. The rate of objection to a settlement is negatively correlated with the chance that the settlement will be approved, but the rate of opt-outs has no correlation with settlement approval. Levels of dissent exhibit a noticeable decline over the period of the study. This study has a variety of implications for the law of class actions.