Class Action Law

Class action lawsuits are civil suits that are brought by one or more people on behalf of a larger group of people who have suffered similar harm or with a similar claim. Class action suits are generally used when too many people have been affected by the subject of the claim for each of them to file a separate lawsuit. Learn how to pursue a class action lawsuit below with our free legal guide.

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Feb 18, 2021

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A class action lawsuit in a civil lawsuit that is brought by one person or a few people on behalf of a larger group of people who have suffered similar harm or have similar claims. In a typical class action, a plaintiff sues a single defendant or several defendants on behalf of a group, or class, of absent parties. The law entitles customers to fair compensation for a variety of corporate violations.

Class actions can be brought in either federal or state courts, though a recent federal law, the Class Action Fairness Act of 2005, makes it easier for defendants to move class action lawsuits from state to federal courts. State and federal rules govern class action requirements. Most states’ procedural rules follow the FRCP.

Class actions are generally used when too many people have been affected by the subject of the claims for each of them to file a separate lawsuit. In most states, class actions are common where the allegations usually include hundreds or thousands of consumers who the same defendant has injured in the same way. Class actions allow all class members’ claims to be solved in a single proceeding with the help of the representative plaintiff(s) and appointed class counsel. The people who begin the lawsuit are called plaintiffs or class representatives. The people intended to be represented are called the class members.

For example, class action suits are frequently used for claims of injury from hazardous products including pharmaceutical products and dangerous drugs. Successful class action cases have involved tobacco, asbestos, Agent Orange, breast implants, and a contraceptive device. Class actions are also frequently used in securities cases (such as fraudulent financial statements and practices like releasing false information about stocks and other forms of market manipulation); in employment cases (such as mass dismissals and violations of wage/hour laws); and to stop illegal or harmful practices like oil spills, manufacturing pollution, or violations of state or federal constitutional protections.

Read on to find out the class action requirements and what you can expect.

How a Class Becomes Certified

A lawsuit becomes a class action when one or more plaintiffs, often called Lead Plaintiffs , file a lawsuit claiming some kind of harm. The plaintiff(s) can then ask the court to certify the case as a class action. To have the case certified, the Lead Plaintiff and class action attorneys must show that the case meets several criteria:

  • There is a legal claim against the defendant(s).
  • There is a significantly large group of people who have been injured in a similar way and the cases of members of the class involve similar issues of fact and law as the case of the Lead Plaintiff(s). Class certification might be denied, for example, if people have suffered different kinds of side effects from a defective drug. The differences in injury would require different evidence for many class members.
  • The Lead Plaintiff is typical of the class members and has a reasonable plan and the ability to adequately represent the class. The Lead Plaintiff must also have no conflict with other class members. A Lead Plaintiff who seeks money damages for him or herself, but is willing to agree to coupons for all the rest of the class, is probably not adequately representing the class.

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How Potential Class Members Are Notified

If a lawsuit is certified as a class action, the court will order that the class of people affected be notified, which is done through direct mailings as well as through the media and Internet. Class membership is automatic in all but a very few cases. After a class is certified, lawyers and class representatives must notify as many class members as possible. If they do not have each plaintiff’s contact information, they must provide notice in newspapers, magazines, or on websites. However, it would be best to give notice personally, by mail, or email. The court will adjust the type of notice required to the particular facts of the case.

The notice must include:

  • The reason for the action
  • The class definition
  • The class claims/ issues
  • That a judgment in the case prevents them from suing on their own
  • The option to participate through lawyers
  • The right to opt out for money damages and how to opt out

Everyone affected by the action or product complained of will be part of the case unless they choose to opt out. Class members do not take part in the case directly unless they have evidence to offer, and they are not involved in the decision of whether or not to accept a settlement offer. The Lead Plaintiff consults with the class action attorneys to plan the strategy of the case and to accept or reject settlement offers. Other class members have only the option of opting out of the settlement.

How the Recovery is Divided

The court decides how to divide any recovery at the end of a class action suit. The attorneys are given costs and fees, often calculated as a percentage of the entire recovery, the Lead Plaintiff(s) receive an amount partly determined by their participation in the lawsuit, and the rest of the recovery is divided among the class members.

Is a Class Action Lawsuit Worth it?

You can file a class action lawsuit against corporations or government entities if your case meets the legal requirements. The class must be so numerous that addressing individual claims separately would be ineffective. Depending on your case, you might sue:

  • Manufacturers: Consumers have rights. And one of those rights is safety. A defective product may prove unsafe which means you can take legal action. The lawsuit gives you an opportunity to find others who also bought the defective product and seek justice.
  • Financial institutions: Banks, insurance companies, credit unions, or any other type of lender who charges unfair fees or requires undisclosed, material changes in interest rates or policy could be a defendant.
  • Government agency: Poorly maintained property, defective equipment, or civil rights violations may also be the reason for a lawsuit against a government entity.

What are the Benefits of Class Actions?

The lawsuit places thousands of claims at one time that are impossible to litigate individually, making the process much more efficient. The judges decide the basic question of who wins concerning the entire group. If the defendant wins, the class lawsuit is dismissed, and the individuals in the group are not allowed to file new or individual lawsuits over the same issue against the same defendant. If the class of plaintiffs wins, the defendant is found liable for the plaintiffs’ injuries, and the amount of recovery is later divided among the plaintiffs.

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What are Class Action Settlements?

Most cases settle before going to trial or, sometimes, during the trial. However, without court approval and notice to the class, a class action cannot be settled. If the representative parties reach a settlement agreement, they must show it to the court. The court will then decide if it’s a fair settlement. If the court approves, the class must be notified of the proposed settlement and attend a fairness hearing and oppose the settlement. After the fairness hearing, the settlement may be approved. Many class action settlements give cash or other forms of relief. However, if the court approves, the plaintiff may get a higher compensation amount for participating in the case. These are considered services or incentive awards.

Contact an experienced lawyer who will review your case and help you decide if you should file individual lawsuits or class actions. Think about how a jury would view your case. This can help you tell your story to a lawyer, and in turn, can help the lawyer evaluate your claim. To begin the lawsuit, you’ll need to work with your lawyer or other lawyers to draft and submit a complaint.

For more information about class action lawsuits, see the following articles:

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