So, Bank of America just helpfully furnished me with* a notice letting me know that I am eligible to receive a $78 payment from a fund set up to pay off a California class action suit.
I’ve received a couple of class action notices before and disregarded them because I wasn’t actually part of the class bringing the action. One was over Hyundai overstating the horsepower of certain vehicles in its product literature. I think the other one was over Blockbuster late rental return fees.
Anyway, I filled out an online claim form thingy (after looking up the case to make sure the whole thing wasn’t a scam to get my account number).
So, here are my questions:
What legal right, if any, am I waiving by accepting a payment or not opting out, other than the right to sue BoA myself for overdraft fees? Am I releasing all possible claims against BoA? Mods, I’m not planning on filing a suit anytime soon, but feel free to edit this post if it crosses the “asking for legal advice” line.
Why would you file a class action suit? The original plaintiff apparently gets a bigger chunk of the settlement- up to $10,000.00. Presumably, she could have gotten at least as much by promising not to file a CA suit- I imagine BoA would be much happier paying out $1 million (or whatever) to one person than $35 million to thousands. So what’s the benefit to the plaintiff?
In case anyone is wondering, the suit appears to be over the way BoA posts large pending transactions to your account first, so that if you have a bunch of little transactions which occur later, they’ll post after you’re overdrawn, resulting in multiple OD fees.
*By “furnished me with”, I mean buried it as a .pdf among the array of various privacy notices and stuff. I actually clicked on it accidentally.
The usual benefit is that the individual plaintiff doesn’t really stand to recover enough to make his suit “worth its while” ($10,000 recovery would not even cover the cost of suing to get it). So, for each individual, it makes no sense to sue. By creating a class, all the people with small recoveries join together under one set of attorneys, and cost-per-plaintiff is greatly reduced. Alternatively, if representation is on contingency basis, meaning the attorney is only paid if the plaintiffs win some $$, you have to have a big enough potential recovery or else no one will want to take it on. By gathering up 10,000 people who have each lost $500, you will be able to get a big enough dollar value to find a lawyer on contingency.
From the perspective of fairness, its not fair that a defendant gets off scot free just because he/she hurt a lot of people, but didn’t hurt anyone all that badly. if a bank skims $20 off every bank account, that’s still a pretty shitty way to act. Why should they get to keep the cash? There is also a satisfaction in punishing the bad guy, that goes beyond the monetary.
The reason class actions are allowed is that when a bunch of people are all suing under the same operative facts, and they sue individually, there is a risk they will all get different results. That isn’t good for the plaintiffs OR the justice system.
If there are a handful of plaintiffs, their cases can be “joined” or all tried together, individually. However, if the potential plaintiff group (or “class”) is so numerous that joinder is impractical, the class action is permitted.
You can read the rules, which are written pretty clearly, in Rule 23 of the Federal Rules of Civil Procedure.
It also serves to avoid overcrowding the court system. If one person committed an identical wrongful act against five hundred victims, it’s a lot more convenient to treat it as a single civil suit rather than try it five hundred seperate times.