A class action is a lawsuit that is usually brought by one or more persons on behalf of a group of others, in a similar situation. Everyone is required to share similar legal issues and there must be enough individuals that it wouldn’t make sense to bring separate lawsuits.
Requirements to Bring a Class Action
Additionally, the class must be certified by the court to bring an action. The court will consider the following before certification:
- The plaintiffs will adequately represent the interests of the whole class, there must be no conflicts of interest, and they must be competent;
- The claims of the representatives must be similar and represent the entire class; AND
- The question of fact must come from one act or a pattern of conduct by the defendant.
How Does a Class Action Lawsuit Work?
Initially, a person or group of people will bring a putative class action lawsuit against the defendant. The court will then decide whether or not to certify the lawsuit as a class action. If it does so, the original group will represent the entire class action group, and it will move forward as a class action lawsuit.
If they refuse to certify the class, they will often give their reason why. Typically it is because they do not think the class is complete, meaning that there could be more potential plaintiffs to join the class.
Any person who may be affected by the class action lawsuit is entitled to receive notice of it being initiated. Included in the notice must be a description of the claim, and information that they can opt out of the class action if they wish to do so. If they do opt out, they must be aware that they will not be able to bring forth their own claim in the future.
Since many class actions are very large, notices of class actions can be put in newspapers, TV commercials, or mailing lists. Depending on the circumstances, it is possible for a possible class member (but did not join the class) can bring forward their suit if they simply had no idea that there was a class action. If you want to determine if you are able to bring your lawsuit, it’s important to contact a lawyer as soon as you are aware of a class action.
What Will I Receive as a Member of a Class Action Lawsuit?
Depending on the lawsuit, class members may be entitled to a portion of the damages paid by the defendant. Since these lawsuits can involve a lot of people, the amount received may be negligible. Rebates, products, or services from the company are also commonly received by class action members. Attorneys fees are usually taken from the damages award, rather than received up front.
Class Action Fairness Act
The Class Action Fairness Act was enacted to curb any abuse of the suits frequently seen in state courts, as states seemed to be acting too favorably toward plaintiffs. Under the Act, if a class action has more than 100 plaintiffs, more than $5 million in question, and less than 2/3 of the plaintiffs live in the state where the action took place, then the defendant can choose to move the action to federal court. Defendants may also move it to federal court if any questions regarding federal law exist.
Settlement of a Class Action
Class action settlements are common. Usually, the two parties will hammer out a settlement and then present it to the court. If court approves the settlement, members of the suit can opt out of the settlement, and any member can object to the settlement with the court.
The court will decide if the settlement is fair, taking into consideration the injury suffered by the plaintiffs and the size of the class. If the settlement is low for a large class, that means each class member will get very little. Depending on the nature of the injury, the court may require that the settlement be larger so that each class member can get a fair portion.
What are Some Types of Class Action Lawsuits?
Some of the more common types of class action lawsuits include, but are not limited to:
- Pattern of discrimination by a large employer that involves race, age, gender, or sexual orientation;
- Employees who have been harmed by a corporation’s unfair business practices;
- Consumers affected by a defective product;
- Patients harmed by unsafe drugs;
- Consumers and merchants who have paid exorbitant prices for a product; and
- Investors that were victimized by securities fraud.
Unless a member opts out of any of these class actions, they will all be bound by the decision of the court. Federal Rule of Civil Procedure 23 governs class actions under federal law.
Why are Class Action Lawsuits Used?
Class action lawsuits are meant to protect those injured by large corporations or entities. There are benefits for plaintiffs and for the corporations they are suing. For the plaintiffs:
- All plaintiffs, including ones that cannot afford legal counsel, can find relief;
- Members of the class do not need to come before the court, and instead can join the named plaintiff; and
- Members of the class have a chance to opt in and out of the settlement.
For the corporations, the main benefit is that they can face one lawsuit instead of potentially thousands. This one lawsuit will also give them the opportunity to take time to collect evidence, negotiate a settlement, and address these issues with enough time instead of a rushed or hurried case.
Do Class Action Lawsuits Always Win?
Class action lawsuits do not always succeed. If the court disagrees with why the suit is being brought, or thinks the defendant is innocent, the case will be dismissed. If it is dismissed, the individual group members may not be able to file new or individual lawsuits for the same reason in the future. Often, the court will allow the plaintiffs to re-examine their claim and alter it as necessary in order to fit the requirements to continue forward as a class action lawsuit.
Do I Need a Lawyer?
Class action lawsuits are very complex, and it is important to find an attorney who can help you determine your best course of action, as well as represent your best interests in court. If you or a group of people have been similarly harmed by one entity, speak with a personal injury lawyer immediately.