FAQ: Class Actions

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 What is a Class Action?

Class actions are lawsuits in which one or more plaintiffs who are named in the lawsuit, along with their attorneys, purpose a class action case for themselves as well as the defined class against one or more defendants.

The claims which arise from the class representatives are required to arise from facts or law common among the members of the class.

What are the Requirements to Bring a Class Action Lawsuit?

In order to bring a class action lawsuit, the class must be certified by the court. When certifying a class, the court will consider whether:

  • The plaintiff or plaintiffs will adequately represent the interests of the entire class;
    • there cannot be any conflicts of interest; and
    • they must be competent;
  • The claims of the representatives are similar and represent the entire class; AND
  • The question of fact comes from one act or from 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 elements a court will consider when determining whether to certify a class of plaintiffs who desire to bring a class action lawsuit. Most courts will consider the following factors when forming a class of plaintiffs in a class action lawsuit:

  • Numerosity: there must be an adequate number of plaintiffs, typically over 30;
  • Commonality: there must be common injuries or legal issues between all plaintiffs;
  • Typicality: each class member’s claim is required to arise from the same event and must use the same legal argument;
  • Adequacy of representation: the class representative plaintiff must adequately protect and represent the interests of the class; and
  • Viability of defendant: the defendant should have sufficient funds to pay all of the members of the class if the lawsuit is successful.

How Does a Class Action Lawsuit Work?

A class action lawsuit begins when a group of individuals bring a putative class action lawsuit against a defendant. The court will determine whether or not to certify the lawsuit as a class action lawsuit.

If the class is certified, the original group will represent the entire class action group and the case will move forward as a class action lawsuit. If the court does not certify the class, it will often be because the class is not complete, meaning that there could be more potential plaintiffs who join the class.

What are Some Examples of Class Action Lawsuits?

Although a class action lawsuit may apply in a variety of situations, examples of the most common types of claims include:

  • Employees sue a business for discrimination in the workplace, involving:
    • race;
    • age;
    • gender; or
    • sexual orientation;
  • Business or home owners affected by an environmental disaster;
  • Consumers who purchased the same defective product;
  • Consumers who were deceived by the same false advertising;
  • Patients who were prescribed defective or dangerous drugs;
  • Investors who lost their savings because of securities fraud committed by senior executives of a publicly traded company;
  • Employees who have been harmed by a corporation’s unfair business practices; and
  • Merchants and consumers who paid an exorbitant price for a product.

Can I Initiate a Class Action Lawsuit?

One single plaintiff may file a class action lawsuit as a putative class action. There must be, however, a significant number of individuals who are potential members of the class.

There must be such a large number of plaintiffs that it would be impractical for each plaintiff to bring their claim individually. In addition, there must be facts or questions of law which are common to all class members.

The claims of the class representatives which are chosen must be typical of those individuals who are members of the proposed class. The class representatives must also be able to properly and fairly represent the class.

What Types of Class Actions can be Filed?

The majority of class action lawsuits are filed in order to recover monetary damages, or money, from the named defendants. A class action lawsuit may also be filed to resolve a monetary dispute over a “limited fund”, where the money that is available is not adequate to fully compensate all class members.

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

Yes, typically, all absent class members are bound by the judgment or settlement of a case. If the goal of the lawsuit, however, is to recover money, absent class members are typically entitled to notice of the lawsuit as well as an opportunity to “opt out” of the proceedings.

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

How Do I Join a Class Action?

Typically, a notice is issued to potential class members of a lawsuit informing them whether they are required to take any action to participate. Technically, a class member does not join the litigation, but, rather, decides not to participate by opting out.

What Will I Receive as a Member of a Class Action Lawsuit?

Depending upon the lawsuit, a class member may be entitled to a portion of the damages which are paid by the defendant or defendants. Because class action lawsuits may involve a large number of individuals, the amount they receive may be negligible.

A class action member will also commonly receive:

  • Rebates;
  • Products; or
  • Services from the company.

Attorney’s fees are typically paid from the damages award, rather than received up front.

Why are Class Action Lawsuits Used?

Class action lawsuits are intended to protect individuals who are injured by large corporations or entities. There may be benefits for the plaintiffs as well as for the corporations which are being sued.

Plaintiffs who could not otherwise afford legal counsel may obtain relief without being required to come to court. Corporations benefit because they will face only one lawsuit instead of potentially thousands and will be provided ample time to gather evidence and attempt negotiations.

Should I File My Own Class Action Lawsuit?

Whether an individual should file their own class action lawsuit depends upon the type of lawsuit they are considering as well as their own individual circumstances. If the damages are small, the cost of litigation would make it impractical for an individual to file their own suit.

However, if an individual feels that they have substantial damages and a serious claim, they should consult a lawyer about whether to opt out of the class and file their own lawsuit.

Do Class Action Lawsuits Always Win?

A class action lawsuit is not always successful. If the case is dismissed or the court or jury finds for the defendant, the individual group members may not be permitted to file a new or an individual lawsuit based on the same acts in the future because the court had already decided on the facts of the case and why a lawsuit would not succeed under the facts.

In many cases, a court will permit a plaintiff to re-examine their claim and alter the claim as necessary in order to fit the requirements for the case 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, each individual who is a part of the lawsuit will receive a Notice of Settlement. This notice will be sent by mail to all members of the class.

The notice may also be published or advertised instead of being mailed directly to the affected plaintiffs. A Notice of Settlement will provide information regarding each plaintiff’s legal rights regarding the settlement.

In addition, a plaintiff may be required to respond by a certain deadline in order to claim their portion of the settlement. A plaintiff is not required to join a class action and they may opt out of the class action if they wish to do so.

Do I Need a Lawyer?

A class action lawsuit is often very complex. Because of this, it is important to find a class action lawyer who can assist you in determining your best course of action as well as to represent your interests in court.

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