Class Action Lawsuits Law

The class action lawsuit law definition is a civil claim against a single defendant or group of defendants by a large number of individuals with similar claims. Class action lawsuits provide a number of advantages, including the ability to share the costs of litigation, the ability for more people to benefit from the settlement or award, and relieving the courts of the burden of trying hundreds or even thousands of similar cases individually.

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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: Jul 27, 2021

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Overview

  • Class action lawsuits involve a large number of claimants, known as class members
  • One or more cases are selected as the class representative and those claimants will be asked to testify and agree to settlement negotiations on behalf of all class members
  • In order to file your own individual claim against the defendant instead of participating in the class action, you must officially opt-out
  • Most class action cases are resolved through a negotiated settlement, with the award being distributed through coupons, a trust fund, or based on the value of each member’s claim

Class action lawsuits are a common way of resolving a large number of cases that have substantively similar claims against the same defendant or group of defendants by joining all of the cases into one.

Instead of dozens or hundreds or thousands of individual cases being tied up in individual litigation lawsuits, they’re all handled in a single case. The cases are joined when a judge rules to certify the class.

The settlement or the award in a class action case is shared between the members of the class. Those who were impacted by the issue involved in the class action suit are given notice of the lawsuit and provided instructions for opting out. Keep reading to learn more about your options and what to do if you’re involved in a class-action lawsuit.

Have you suffered physical, psychological, or financial harm that was also suffered by many others? Do you want to know how class action lawsuit laws apply to your case? Would you be interested in filing a claim that could potentially become a class action case? Enter your ZIP code above to find an affordable class action lawyer in your area for free.

What is a class action lawsuit?

The class action lawsuit law definition is a type of civil legal claim in which several claimants with substantively similar claims against a defendant or groups of defendants join their case into one large claim. This claim seeks to establish the harms done to the members of the class and determine a resolution to the action that resolves the complaints of all members of the class. This process is known as “certification of the class”.

The Federal Rules of Civil Procedure establish the criteria for when a class action lawsuit is the necessary type of claim to make. Those criteria include:

  • The group of people with similar claims against the defendant is so large that it would be impractical to try to resolve all of the cases individually
  • There are questions of law or facts that are common in all of the cases
  • The claims or defenses of the representative parties are typical of the claims and defenses of all of the class
  • The representatives of the class will fairly and adequately represent the interest of the entire class

It should be noted that there is no precise number of members needed for a class action to be certified, though it is difficult to certify a class of fewer than 20 members.

While class action cases often involve defective products, the most common types of class action lawsuits involve labor and employment class actions. Consumer fraud and product defects round out the top three most common types of class action complaints, accounting for more than 75% of all class action spending.

No matter which kind of class action lawsuit you are involved in, learn how to find a class action lawsuit attorney near you before you opt-in or move forward with your case to guarantee that your best interests are protected.

What are the benefits of filing a class action lawsuit?

As the adage states: there’s power in numbers. Class action suit lawyers can help individuals who have experienced harm obtain compensation for that harm in certain cases where they otherwise would not have that ability.

When it comes to deciding between filing a class action lawsuit vs. private lawsuit, consider the benefits class actions offer up for all sides of the equation, including the claimants, the defendant, and the court system. Some of those benefits include:

  • Lower litigation costs: Because there are numerous claimants with substantively similar claims, the class action allows them to share the costs of the case, including the costs of attorney services, including investigating the claims, negotiating with the at-fault party in an attempt to garner a settlement, and the costs associated with the trial
  • Increased opportunity to litigate: Because civil lawsuits are so expensive, those with claims that aren’t worth much money would often be left out of the individual claims process
  • A greater degree of uniformity in the resolution of cases: If all of the cases in a class action lawsuit were to go to court as individual claims, the resolution of those claims would likely be all over the board in terms of judgments and rulings due to the differences in state laws, attorney representation, and how the judges and jurors deciding these various cases perceived the facts.
  • A higher likelihood of financial recovery: Defendants tend to take the claims of many more seriously than the claims of a few, and will likely be more motivated to work towards a settlement than risk having one individual case win big in court with dozens — or even hundreds or thousands — of cases waiting in line to be heard
  •  More experienced legal representation: The legal system is complex, and even more so when you add the regulations and requirements of a class action to the issue. The attorneys who work on class action cases are often among the most experienced attorneys you can find
  • Increased efficiency: The class action relieves the burden from a heavy-tasked court system of deciding all of these cases individually

What is the difference between class actions and mass torts?

Class actions are often confused with another type of lawsuit used to resolve a number of cases at once, known as a mass tort. Mass tort actions are often used when the group of people who have been harmed cannot meet the legal criteria necessary to certify the group as a class. This is generally the result of group size not qualifying for class action or there are big enough differences in the claims made that the cases cannot be joined.

Another difference between the two types of legal actions is that with class actions, all individuals of the class must be notified of the action and given the opportunity to opt-in or opt-out of the group, or to even find their own counsel. Such notice is not provided in a mass tort action, and the burden is on the claimant to learn about the tort and take the necessary steps to join the case.

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How do class action lawsuits work?

When an individual approaches an attorney about a case that could be the subject of a class action, the attorney must first investigate the claim and compare it to other known cases. The attorney will find out if a class action has already been filed and will learn if their client’s case meets the applicable deadline for joining the class.

The attorney will also research previous rulings to learn how successful similar claims have been in the past, and ensure that the potential defendant in the case is not shielded from liability through a bankruptcy filing. If there is not a current class that the attorney’s client can join, he or she can consider filing the case individually and seeking class certification later.

Scroll down to learn more about how class action lawsuits work and the steps attorneys take when bringing these types of cases to court.

Step One: Certifying the Class

The first step in getting a case certified as a class action lawsuit is for the attorney to draft a complaint, which is a legal filing that details the facts of the case and the compensation that is being sought. The attorney will also describe the proposed group of people (class) that the lawsuit would serve, define the scope of the class as statewide or nationwide, and establish that the number of people would be too large to efficiently handle the cases individually.

Where the members of the class reside is important as it determines whether the case is filed in state court or federal court.

At this point, the case is referred to as a putative class action. What this means is that the case has been filed and is assumed to be a class action but cannot be referred to as such until the judge officially certifies it. Certification occurs when the judge reviews the facts of the case and makes the determination that it meets the criteria for class actions.

Step Two: Opting In/Opting Out

Once a case has been certified as a class action, the attorney for the class representatives will send out a notice to anyone whose legal interests can be impacted by the suit. These individuals are prospective members of the class, and the notice will not only inform them of the details of the lawsuit that has been filed but will also provide information about how the individual can “opt out” of the lawsuit.

What do I do if I receive a class action notice? Opting into a class action is not difficult, as you are not required to do anything in order to benefit from the action. However, if you wish to opt out and not be a member of the class, you will want to follow the instructions listed in your notice on how to do so. It is important to observe the deadline for opting out if you don’t wish to be part of the class.

Reasons for Opting Out

Many people wonder if you stand to benefit from the class action, why you would choose to opt out of it? Here are a few of the reasons individuals decide not to become class members in a class action lawsuit:

  • If the action being sought by the lawsuit doesn’t satisfy your needs, such as if you are seeking compensation for injuries but the action is only seeking repair of the product that caused the injury
  • You suffered substantially more losses than the representative class member, even if your claims are substantively similar

Before you decide to opt-out, you should be aware that there are many valid reasons not to opt-out, including:

  • If you remain in the class action, you will obtain a share of the settlement or award
  • If you opt-out of the class action, you will not have the opportunity to participate in the cost-sharing benefits of this type of lawsuit
  • You will be limited by the statute of limitation in your personal case and can be barred from filing a claim individually if too much time has passed since the product defect was discovered

Consulting with a class action lawsuit law attorney can help you decide whether you should opt out or not.

Step Three: Discovery

Discovery is the point in a lawsuit in which the attorneys for the defense and the claimants can begin requesting to see documents and other evidence that the other side has in its possession. This is also the point at which the attorneys for both sides will begin deposing witnesses and others with knowledge or information that pertains to the case.

A deposition is a form of sworn testimony that occurs outside of the courtroom. The testimony provided in a deposition is generally used by either side to help inform them as to how to approach the case and is not admissible in court. However, there are some circumstances in which deposition testimony can be used in court, such as if the deposed individual offers a vastly different accounting of events in court as he or she did in deposition, or a deposed witness is unavailable to be examined in court.

Step Four: Resolution of Claims

A tort claim is a civil claim in which a party who has suffered an injury or loss seeks compensation from the liable (legally responsible) party. Class action cases are a type of tort claim, as are single personal injury or property damage cases.

While litigation is one way of resolving these cases, the vast majority of tort claims are resolved before they ever see the inside of a courtroom. One common way for this type of case to be resolved is through a negotiated settlement.

Settlements in Class Action Cases

Settlement negotiations between the at-fault party’s insurance provider and legal counsel for the injured parties can begin as soon as a demand for compensation is received. This demand is typically in the form of a third-party claim against the at-fault party’s insurance policy before a legal claim has ever been filed in court. These negotiations can continue all the way up to the trial, and even after the trial has begun but before a verdict is reached.

One of the duties of the class representatives whose cases are presented to the court is to determine, with the guidance of their attorneys, whether to accept a settlement offer. The offer must fairly represent all of the members of the class and must be approved by a judge before it is final.

There are a few ways in which a settlement can be distributed to all of the members of the class, including:

  • Coupon settlements: all members of the class receive a discount on a product by the defendant
  • A common fund or trust: the defendant deposits a pool of money to be equally divided between class members
  • Claims-made: the defendant paying the value of each valid claim that is submitted

The appropriateness of these settlement distribution methods depends on the details of your case.

Litigation

If the two sides of the case are unable to agree on a settlement in the class action, litigation will take place. In court, the judge and/or jury will hear testimony from the class representative as well as from other witnesses and individuals with expertise or information to offer that can further help reveal the facts of the case.

If a settlement agreement still is not reached by the time all evidence has been presented and all witnesses have been examined, then the judge or jury will make a determination on liability and damages.

Step Five: Notifying Class Members

Just as they were required to notify the potential members of the class when the class action was certified, the plaintiff’s attorneys are also required to notify class members when there has been a settlement or award. This notice must contain much of the information that was in the initial notice, such as the right to opt out, as well as information as to how valid class members can obtain their share of the settlement.

If some members of the class fail to opt-out or collect their share of the settlement by the deadline printed on the notice, the unclaimed settlement can either be:

  • Given back to the defendant
  • Distributed equally among class members who claimed their awards
  • Donated to a charity whose mission reflects an aspect of the case

If you are a victim in a class action lawsuit, don’t miss out on your chance for compensation by letting your settlement go unclaimed.

Why do I need to hire a class action lawsuit law attorney?

Federal laws require a plaintiff’s attorney in a class action lawsuit to show that they are able to provide adequate representation for the entire class of affected individuals.

It is very unlikely that an individual who is not an attorney with ample experience in class action cases would be approved to provide legal representation. Because of this, a class action case always has an attorney who is highly experienced in this type of case.

Class action law attorneys generally work on a contingent fee basis, meaning that they are not paid for their services until there is a successful outcome in the case.

Some of the tasks a class action lawyer will provide include:

  • Determining a value to the case based on the estimated value of losses incurred by members of the class
  • Preparation of the draft in which the putative class action is justified
  • Filing the lawsuit on behalf of the class representative and providing legal representation for the class
  • Providing adequate notice of the class action certification to prospective class members
  • Managing identification of individuals wishing to opt-out of the class
  • Negotiating with the at-fault party’s insurance provider in an attempt to garner a fair settlement offer
  • Collecting the evidence, witness, and expert testimony needed to prove your case in court, should a settlement not be reached in advance of the trial
  • Providing litigation services for the class, including the delivery of opening and closing arguments, the examination of witnesses, and the presentation of evidence
  • Working with the defendant to establish a practical method of distributing settlement or award shares to all class members

One of the first jobs of class action lawsuits lawyers is to determine if your case is a good candidate for a class action or if your needs would be better served through a different legal avenue. If you’re involved in a class action lawsuit, hire a class action lawsuit lawyer to plan your next steps forward.

When should I hire a class action attorney?

You might need a class action attorney if:

  • You have suffered an injury or loss and you think that there are at least two dozen other people in your area or in the nation who have suffered the same injury or loss as a result of the actions of the same at-fault party
  • Your case involves one of the common subjects of a class action claim, such as discrimination in a workplace or organization; fraudulent collection practices; fair pay or other workplace disputes; a defective product; environmental issues, such as a corporation polluting air quality or soil; or, defective medical practices or devices
  • You are more interested in justice for people who have experienced harm as a result of the defendant’s actions than you are in obtaining a maximum dollar amount on your own claim, and are willing to share the settlement obtained with a group of people

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