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FAQ: Class Actions

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What is a Class Action?

A class action is a representative action wherein one or more plaintiffs named in the lawsuit complaint, along with their lawyers pursue a class action case for themselves and the defined class against one or more defendants. The claims of the "class representatives" must arise from facts or law common to the class members.

Here are some frequently asked questions about class actions, and important things you should know if you're thinking of joining one.

What are the Requirements to Bring a Class Action Lawsuit?

To bring a class action lawsuit as a plaintiff, the court to bring an action must certify the class. 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.

What are the Requirements for Certifying a Class of Plaintiffs in a Class Action Lawsuit?

There are several requirements a court will consider when deciding on whether to certify a class of plaintiffs that want to bring a class action lawsuit. The following are the factors considered by most courts in a class action lawsuit to form a class of plaintiffs:

  • Numerosity: there must be an adequate number of plaintiffs, usually over 30
  • Commonality: there must be common damages and legal issues between all plaintiffs
  • Typicality: each class member's claim must come from the same event, and must make the same legal argument
  • Adequacy of Representation: the class representative plaintiff must adequately protect and represent the interests of the class
  • Viability of Defendant: the defendant should have sufficient finances to pay all the members of a class if the lawsuit is successful

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 and allow the plaintiffs to bring a class action lawsuit against the defendants, 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.

What are Some Examples of Class Action Lawsuits?

While class actions can apply to a variety of situation, these are some examples of the most common claims:

  • Employees sue company for discrimination in the workplace that involves race, age, gender, or sexual orientation;
  • Homes or businesses owners affected by an environmental disaster;
  • Consumers who purchased the same defective product;
  • Consumers were deceived by the same false advertising;
  • Patients were prescribed defective or dangerous drug by manufacturer;
  • Investors who lost savings due to securities fraud committed by senior executives of a publicly traded company;
  • Employees who have been harmed by a corporation’s unfair business practices; and
  • Consumers and merchants who have paid exorbitant prices for a product.

Can I Initiate a Class Action Lawsuit?

A single plaintiff can file a class action lawsuit as a putative class action. However, a significant number of people must be potential members of the class. There must be so many potential plaintiffs that it is impractical for each person to bring their claim individually.

There must also be facts or questions of law that are common to all class members. The claims of the chosen class representatives must also be typical of those people who are members of the proposed class. Lastly, the class representatives must be able to fairly and properly represent the class.

What Types of Class Actions Can Be Filed?

Most class actions are filed to recover money or monetary damages committed by the named defendants. Class actions may also be filed to resolve monetary disputes over a "limited fund", where the money available is inadequate to fully compensate all class members.

Can I Be Bound by a Settlement or Judgment of a Class Action?

Yes. All absent class members are usually bound by the judgment or settlement of a case. However, if the goal of the lawsuit is to recover money, absent class members are generally entitled to notice of the lawsuit and an opportunity to "opt out" from the proceedings.

If a person opts out, they are not bound by any judgment or settlement of the class action. If a person opts out, he or she may be free to bring a claim for damages on their own.

How Do I Join a Class Action?

Generally, before a court certifies a class action, it must first conclude that there are too many class members for them all to be named as parties in the lawsuit. Technically, class member do not join in the litigation, but rather decide not to participate by opting out. 

Usually, the notice issued to potential class members of the lawsuit will tell the members whether they need to take any action to participate.

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.

Class action members also commonly receive rebates, products, or services from the company. Attorney’s fees are usually taken from the damages award, rather than received up front.

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.

Corporations that are being sued in a class action lawsuit also benefit from class action lawsuits. 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.

Should I File My Own Class Action Lawsuit?

The answer to this question depends on the type of lawsuit you are considering and your own individual circumstances. In a typical class action the lawsuit seeks recovery for a large group of people, but the individual damages may be small.

If your damages are relatively small, the cost of litigation would make it impractical to file a suit on your own. However, if you feel that you have substantial damages and a serious claim, you should consult a lawyer about whether to opt out of the class and file your own lawsuit.

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 did not commit any wrongdoing, 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 because the court already decided on the facts of the case and why a lawsuit cannot be brought under those facts.

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.

Will I Receive Notice of a Settlement If I Am a Part of a Class Action Lawsuit?

Yes. Every person who is part of the lawsuit will receive a Notice of Settlement. The notice is sent by mail to all members of the class. The notice may also be advertised or published instead of being sent directly to the plaintiffs that were affected.

A settlement notice contains information on each plaintiff’s legal rights regarding the settlement. Also, plaintiffs may be required to respond by a specific deadline in order to claim their portion of the settlement.

The plaintiff does not need to join the class action and can opt out of the class action lawsuit if they chose to do so.

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 has been similarly harmed by one entity, then it will be in your best interest to contact a local class action lawyer.

Photo of page author Ki Akhbari

, LegalMatch Legal Writer and Attorney at Law

Last Modified: 07-24-2018 08:24 PM PDT

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