Within corporate America, companies and their legal teams invest substantial time and resources into preventing and defending potential claims resulting from class action litigation. Surprisingly, however, there exists a significant lack of awareness and focus among corporate executives regarding claims their companies may be entitled to within antitrust class action settlements. Each year, millions of dollars are left unclaimed by class members who fail to file a claim in an approved antitrust class action settlement. Furthermore, companies often encounter pitfalls and oversights in identifying and pursuing antitrust class action damages, as the filing process can often be burdensome and time-sensitive.
There are a multitude of reasons why large companies do not identify or file claims within antitrust settlements. Lack of awareness among companies that are eligible class members is one common barrier. The complexities of the class action claims filing process and the associated deadlines also can be a deterrent to successful claims recovery. And, in other cases, companies may have identified a potential claim, but cannot estimate the potential recovery from the settlement, and therefore cannot provide or conduct the cost-benefit analysis to support allocating resources to pursue the claim.
Companies and their legal teams can navigate these obstacles and maximize recoveries by gaining greater knowledge about the antitrust class action claims recovery process from beginning to end. Understanding major milestones and challenges can help legal professionals avoid unnecessary headaches along the way so that they can focus their energy and expertise on more substantive aspects of antitrust class action litigation.
Awareness or Lack Thereof
Many class actions take years before settlements are reached, if they settle at all. Once the settlement phase is entered into, notices are sent to known class members. To notify unknown class members, some class action settlement teams attempt to use mass media (e.g., magazines, newspapers, radio, television) to reach them.
In antitrust settlements, there are several reasons why a company as a claimant may not receive notice or be aware of a case. First, the company may be an unknown claimant, which can occur when purchaser names have not been recorded or the claimants have indirectly purchased from a defendant. In other cases, settlement administrators have limited noticing budgets. In these cases, notices often are sent using lower cost methods, such as a postcard or email. When notice is made via mass media, the budget can limit the size and number of outlets that can be utilized.
Whatever the cause, companies and their legal professionals can overcome this lack of notice by dedicating a resource to stay on top of class action settlements related to the company’s industry. Alternatively, the company can engage a professional class action claims filing service to stay informed of class actions in which the company may have an eligible claim. Such resources and firms can monitor antitrust class actions and notify their clients of potential claims, alleviating the company and its legal team from these time-consuming tasks.
Navigating Deadlines and Requirements
Once a company has identified itself as a class member, there are several important deadlines that are critical to understand, as well as necessary steps to be taken prior to each deadline. If these deadlines and requirements are not met, the claim status may be jeopardized, resulting in a potential lost opportunity for the company. Therefore, companies and their legal teams benefit by understanding the timing and purpose for each deadline and its implications.
The opt-out deadline is the date by which a class member can choose to opt out of a class action suit if they do not want to be bound by the court’s decision in the class action. This opt-out deadline occurs before the court approves the settlement. Opting out of a class action means that the company will not be part of the class. If a company does not proactively opt out by the designated deadline, it will be bound by the decisions and resolutions made by the court in the class action settlement.
The claims filing deadline is the date by which a company must file a completed claim with the settlement administrator in the case. The settlement administrator is the entity approved by the court to administer the settlement process, including reviewing and processing claim forms along with any required supporting documentation.
Claim forms vary in complexity and are uniquely tailored to each settlement. In order to maximize a claim and assure its acceptance by the settlement administrator, companies must file claims accurately, in a timely fashion and with the proper supporting documentation. Claims can cover specific activity that occurred over periods of 10 years or more, so it is essential to include all activity during these periods. It is also important to respond to any requests from the settlement administrator for additional information within their requested time frame. And each case requires different types of supporting documents, such as receipts and invoices. Depending on the case, it can be burdensome for companies and their professionals to determine exactly what is required and to collect, organize and respond to requests for more information from the settlement administrator.
Another important deadline is the claims deficiency or rejection deadline. After claims are filed, claims administrators analyze them to ensure they are complete and have sufficient supporting information. It can take up to a year or more from the claims filing deadline for a claims administrator to sort through all the claims filed and to pay out the settlement. If a claim has a deficiency, the claims administrator typically sends out a deficiency or rejection notice. The notice gives the claimant a certain number of days (often 10 to 30 days) to cure the deficiency. If the deficiency is not cured, the claim may be denied. Claimants must monitor their claim status so that they can become aware and respond promptly to these deficiency-notice deadlines.
Allocating the appropriate resources and getting experts involved is key to meeting various deadlines and requirements. To maximize recoveries and stay on top of class action claims filing milestones, companies and their professionals should allocate significant time, expertise and resources to these transactions. Depending on the case, the intensity of these demands may vary, but they can be expected to occur to some degree in every case.
Many companies that are class members choose to retain a professional to assist in filing the claims so they can be assured they are maximizing a claim; increase the chances their claims will be accepted; and reduce the administrative burden of filing the claim. Many attorneys and companies use class action claims filing services to assist them in filing their claims and throughout the entire process. Claims filing services often charge no upfront fees and only a contingency fee based on what the class member receives from settlement.
The Claims Recovery Cost-Benefit Analysis
Another factor that companies should consider in pursuing antitrust class action settlements is the cost-benefit analysis. In considering costs, there usually is no direct expense to file a claim in a class action settlement. However, there can be significant time and administrative costs in preparing the claim. A review of the claim form and the settlement administrators website can provide some insight into the time and resources necessary to file the claim.
On the benefit side, legal fees, settlement administration costs and other court-approved costs generally reduce the final settlement amount. The remaining settlement is paid out pro rata based on the dollar amount of claims filed or based on other methods prescribed in the plan of allocation. The number and dollar amount of claims filed is unknown until after the claims filing deadline. As such, it is often impossible to know the recovery a claimant will receive in advance. A claimant may be able to estimate a recovery range for their claim using an estimate of their claim and the defendant’s industry information. However, industry information is often not available or easily accessible.
In many cases, there will be some uncertainty whether a claimant’s recovery on a claim is worth the effort of the class action claims filing process. An experienced class action claims filing service or professional may be able to provide assistance in lowering the costs related to the filing as well as to increase the recovery on the claim by providing additional resources and expertise.
Given the myriad of legal challenges that companies face in the course of doing business, antitrust class action settlement claims may be overlooked or brushed under the rug due to lack of awareness, limited resources or questions as to the value of the recovery. However, as the saying goes, knowledge is power. Companies can maximize recoveries in antitrust class action settlements with a greater understanding of potential pitfalls, and by enlisting support of professionals who can help alleviate the administrative costs and burdens typically associated with the antitrust class action claims recovery process.