In 2017, Supreme Court Justice Anthony Kennedy suggested in the ANZ Securities case that “[t]he emergence of individual suits . . . may increase a defendant’s financial liability . . . [because] plaintiffs who opt out have considerable leverage and, as a result, may obtain outsized recoveries.” In making that statement, Justice Kennedy relied on 10- and 20-year-old law review articles, each of which provides theoretical discussion of the advantage of opting out of a securities class action, but offers little data to support the position that opt-out plaintiffs are likely to “obtain a disproportionately large portion of [the defendant’s] assets.” See Coffee, “Accountability and Competition in Securities Class Actions: Why ‘Exit’ Works Better Than ‘Voice,’” 30 Cardozo L. Rev. 407, 417, 432–33 (2008); Perino, “Class Action Chaos? The Theory of the Core and an Analysis of Opt-Out Rights in Mass Tort Class Actions,” 46 Emory L.J. 85, 97 (1997). But individual settlements achieved by opt-out plaintiffs are largely unknown and are typically required to be kept confidential, unlike class action settlements.
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