Open vs. closed class actions, mass torts, and what kind of payout you can actually expect — a plain-language primer on how these settlements work.
By Steve Levine · Updated August 5, 2026 · 7 min read
Quick Answer
A class action settlement is an agreement that ends a class action lawsuit without a trial: the defendant pays into a fund or provides another benefit, and in exchange the claims of everyone in the class are released — usually with no admission of wrongdoing. A judge has to approve the deal before anyone is paid. Most consumer settlements pay each person a modest amount, often a few dollars to a few hundred, because the fund is divided among everyone who files a claim. Cases involving serious physical injury are normally handled as mass torts instead, where damages are calculated person by person.
What Are Class Action Lawsuits?
The legal system in the United States makes it challenging and expensive for individuals to sue companies or businesses for wrongdoing. This is especially true when settlement amounts would potentially only amount to hundreds of dollars. After all, who is going to go through the hassle of taking a company to court only to reach a $500 settlement?That's where class actions come in to play. Class actions give ordinary individuals an avenue to recover losses and damages that otherwise would not be worth their time pursuing in court, letting companies get away with unfair and damaging business practices.
Class action cases range as widely as individual civil lawsuits against businesses, but the most common ones are the result of lawsuits against businesses for:
• Workplace Discrimination
• Defective or Dangerous Consumer Products
• False Advertising
• Damages from Medical Devices or Drugs
• Stocks, Securities, and Investments - Fraudulent Reporting
• Anti Trust - Pricing Collusion and Monopolies
• Wage Theft
• Exposure to Harmful Substances
• Privacy Violations
Below, we discuss these common types of class action lawsuits and settlements.
False Advertising
False advertising class actions arise when a product or service is marketed in a way that is alleged to be untrue. A classic example: in a 2022 case, plaintiffs alleged that Godiva falsely advertised its chocolates as "Made in Belgium" when, according to the complaint, they were not made there. Godiva settled without admitting wrongdoing and paid qualifying class members who filed claim forms on time.Anti-Trust
Antitrust class actions challenge conduct that damages competition, such as price fixing and monopolization — businesses colluding to tilt a market in their favor and squeeze out fair competition. Buyers end up paying more than they would have in a competitive market, and the overcharge is what the class seeks to recover. One example is the class action settlement over alleged price fixing of pork products in the United States, which opened to claims in mid-2023.Discrimination in the Workplace
Workplace discrimination class actions seek damages for groups of employees treated differently because of race, color, national origin, sex, religion, disability, age, or medical condition. Recoveries typically cover lost wages, and in some cases emotional harm.Privacy Violation Class Actions
Companies are often sued as part of class action lawsuits which result in massive class action settlements for privacy law violations. These laws, such as BIPA (the Biometric Information Protection Act) exist to protect consumers and ordinary people from having their data used in ways that can violate their freedoms and rights. This data can include your personal information such as driver's license, passport number, social security number, and even things like data about your face, your fingerprints (biometric data) or even your DNA!Both Snapchat and Facebook resolved eight- and nine-figure class actions over alleged privacy and consumer law violations in the United States. Those two are closed, but privacy is one of the most active categories on the site — see the current data breach settlements for ones still open to claims.
Fraudulent investment reports
Securities class actions are brought by investors who bought stock in good faith and lost money after a publicly traded company allegedly misreported its finances or released misleading news. Recovery in these cases is calculated from the investor's trading losses — the drop in share price attributable to the alleged misstatement — rather than from emotional harm, which securities settlements do not generally compensate. Because eligibility depends on having held a specific stock during a defined class period, these settlements reach a much narrower group than a consumer case does. You can browse current ones on our securities class actions page.A class action consists of a group of people who have suffered similar damages. Many of them could not realistically pursue a claim alone, because the cost and the time involved in navigating the American legal system outweigh what any one of them lost. That is the gap class actions fill. They are filed on behalf of the group by a law firm that takes the case on contingency — no fee unless the case recovers money — after gathering evidence from a small initial group of class representatives.
So what should you know about class actions, how they work, and how to be confident that you can file claims for existing class actions? How do you know if you even qualify?
So What is a Class Action, Exactly?
A class action is a legal proceeding in which one person, or a small group of representatives, brings a claim on behalf of a much wider group harmed in the same way by the same conduct. The representatives and their lawyers file a suit showing the damage done to that wider "class" — for instance, everyone who bought a particular product, used an app, or shopped at a specific store. Our glossary goes deeper on the mechanics in what is a class action.How do I start a Class Action?
You start by consulting class action lawyers about whether there is a case to be made: was a law actually broken, and were a large number of people affected the same way? In federal court the requirements come from Rule 23. There is no magic minimum head count — the rule asks only that the class be so numerous that suing individually would be impracticable, and courts have certified classes of widely different sizes. The claims also have to share common questions arising from the same conduct. Two laws that frequently produce class actions are the TCPA and BIPA, both written to protect ordinary consumer rights and privacy. For a fuller walkthrough, see our guide on how to start a class action.Class action lawsuits more often settle than go to trial, producing a settlement fund distributed to class members under rules agreed by the parties and approved by the judge. Class action firms are generally paid on contingency rather than pro bono — they front the costs and are paid only if the case produces a recovery, out of the settlement fund, in an amount the court has to approve. Fee awards are commonly around a quarter to a third of the fund, and the exact percentage is set by the judge, not by the firm.
What's the difference between Mass Torts and Class Actions?
The difference is whether the court treats you as part of a group or as an individual. In a class action the class is handled as a single unit and members are compensated on largely uniform terms. In a mass tort each plaintiff keeps a separate lawsuit and damages are assessed person by person, which is why mass torts are used where injuries differ — one person's cancer diagnosis is not interchangeable with another's. Mass torts are frequently consolidated before a single judge in a multidistrict litigation, or MDL, but only for pretrial purposes; the cases stay individual. Browse the ones we track on the mass tort lawsuits page.What's an Open Class Action? Closed Class Action?
This phrase gets used two different ways, and it is worth separating them.In the procedural sense, an open (opt-out) class includes everyone who fits the class definition unless they affirmatively opt out, while a closed (opt-in) class covers only people who take a step to join. U.S. consumer class actions under Rule 23 are overwhelmingly opt-out, which is why most people discover they are class members only when a notice arrives.
In everyday use — including on this site — an "open" class action usually just means the claim window is still open and you can still file, while "closed" means the deadline has passed. That is the sense that matters if you are trying to work out whether you can still claim money. Our open settlements list tracks exactly that, and closed class actions are archived separately.
The Largest Settlement in U.S. History
The biggest civil settlement in American history is the Tobacco Master Settlement Agreement, reached in November 1998. The four largest U.S. cigarette manufacturers agreed to pay the attorneys general of 46 states, the District of Columbia, and five U.S. territories at least $206 billion over the first 25 years. Four states — Florida, Minnesota, Mississippi, and Texas — had already settled separately and were not part of it.It is worth being precise about what the MSA was, because it is widely miscategorized: it resolved lawsuits brought by state governments, and it was negotiated rather than won at trial. So while it dwarfs any class action by dollar value, it was not itself a class action settlement, and no individual smoker filed a claim form to receive money from it. The largest settlements that ordinary people actually claim from are far smaller.
Class Actions Today
Class action activity has risen steeply in popularity in the US. Settlement payments can have tax implications that vary by case and by individual. OpenClassActions.com does not provide tax advice — for how a payout affects your taxes, contact the IRS or a qualified tax professional. This blog is not to be considered legal advice.To summarize: a class action is a lawsuit in which one or several people sue on behalf of a large group. Joining one rather than litigating separately costs a class member essentially nothing — the firm works on contingency and is paid from the fund — where filing an individual civil suit over a small loss would cost more than it could recover. Grouping the claims also spares the courts thousands of near-identical cases, which is much of why the procedure exists.
Once a class action settles, the claim window opens and qualifying members are invited to come forward by filing a claim form on the court-approved administrator's website, or by mail. A claim form may ask for your address, details of how you used the product or service, and in some cases proof — an account or app ID, receipts, or a signature given under penalty of perjury. Filing on an official settlement site is always free. As always, take great care in protecting your personally identifiable information.
Frequently Asked Questions
What is a class action settlement?
A class action settlement is an agreement that resolves a class action lawsuit without a trial. The defendant agrees to pay into a settlement fund or provide another benefit, and in exchange the claims of everyone in the class are released. A judge must approve the settlement before any money is distributed, and settlements are typically reached without the defendant admitting wrongdoing.
How much do class action settlements pay?
It varies enormously by case. Most consumer class actions pay each class member a modest amount, often between a few dollars and a few hundred, because the fund is divided among everyone who files. Many settlements pay pro rata, meaning the amount per person goes down as more people claim. Cases involving serious physical injury are usually handled as mass torts instead, where compensation is calculated individually and can be much larger.
What kinds of cases become class action settlements?
The most common categories are false advertising, antitrust and price fixing, privacy and biometric data violations, defective or dangerous consumer products, workplace discrimination, wage theft, securities fraud, and exposure to harmful substances. What they share is a large group of people harmed in a similar way by the same conduct, where each individual loss is too small to sue over alone.
What is the difference between a class action and a mass tort?
In a class action the court treats the class as a single group and class members are compensated on largely uniform terms. In a mass tort each plaintiff keeps a separate lawsuit and damages are assessed individually, which is why mass torts are used where injuries differ from person to person. Mass torts are often consolidated before one judge in a multidistrict litigation, or MDL, for pretrial purposes only.
Do I need proof of purchase to file a class action claim?
It depends on the settlement. Some allow a claim with nothing more than an attestation. Others require an administrator-issued Claim ID, Notice ID, or PIN printed on the notice you were mailed or emailed, which functions as proof of class membership. Others require receipts or records. The claim form on the official settlement website states the requirement for that specific case.
How do I know if a class action settlement notice is legitimate?
A legitimate notice points to a court-approved settlement website where the settlement agreement and the court's orders are posted, and filing there is always free. Be cautious with any message that asks for a payment, a full Social Security number by email, or bank credentials outside the official claim form.
How long does a class action settlement take to pay out?
Payment normally comes months after the claim deadline, not immediately. The court must hold a final approval hearing and enter an order, any appeals must be resolved, and the administrator must then process claims and calculate each share. A year or more between filing a claim and receiving payment is common.
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