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When to Opt-Out of Class Action and Go to Small Claims

By Stephanie Rabiner, Esq. on January 26, 2012 | Last updated on March 21, 2019

Class action settlement offers tend to be disappointing. Five dollars is not adequate compensation for that $80 power cord. But what are you going to do about it? Opt-out of the class action?

Heather Peters did, and then she filed a lawsuit in small claims court. If she wins, she'll likely be awarded more than the $100 and rebate offer that form the Honda Civic hybrid settlement.

Her plan can be applied to almost any class action settlement out there.

Peters didn't approve of the settlement, which was based on claims that Honda lied about the hybrid's fuel economy. She's spent thousands more on gas than originally planned, reports the Los Angeles Times.

The beauty of Peters' small claims plan is that there are no lawyers allowed in California's small claims courts. Honda can't even send its general counsel to defend against the $10,000 claim. That's right -- Heather Peters asked for the maximum amount allowed by law and there will be no lawyer to challenge her.

Just an agent sent by the company.

Statutory maximums vary by state, and so do policies regarding lawyers. If lawyers are allowed in your state's small claims court, it may not be wise to opt-out of a class action. And if you can't recover enough money to make it worth your while, it's best to just take the settlement.

But if you're really offended by the offer, small claims court is a definite option. It's relatively cheap, and judges usually award court fees. It's pretty easy, and most courthouses have detailed instructions on filing a claim.

Ultimately, you may recover more if you opt-out of the class action and file a small claims lawsuit.

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