Class Action Lawsuit
What is a Class Action Lawsuit?
A class action lawsuit is a lawsuit that includes one or a few plaintiffs representing many other plaintiffs not specifically named. The device is used to manage large numbers of plaintiffs harmed in the same way by the defendant.
For example, a plaintiff recently brought a class action against BMW over a potentially dangerous battery that could catch fire and cause harm. The one plaintiff represents a group of consumers with cars that have the faulty battery.[1]
Why Are Class Actions Important?
The modern court system allows for class action lawsuits to make large cases more manageable. Situations in which plaintiffs potentially number in the hundreds or thousands could take decades to litigate individually. There are other reasons for class actions:
- A class action protects the interests of those who cannot be present.
- It provides an economical way to get through multiple lawsuits, saving the court system money.
- It also spreads the cost of suing among the many plaintiffs who might not otherwise be able to afford legal action.
- A class action protects defendants too. It prevents inconsistent financial obligations to various plaintiffs.
What Are the Requirements for a Lawsuit to Be a Class Action?
The law outlines rules for class action lawsuits. A lawyer and plaintiffs can begin a class action suit, but the court must certify it before it can continue. This means the court must find certain facts, and it is the responsibility of the plaintiff to prove them:[2]
- The representative plaintiff suffered injuries as a member of the class of represented plaintiffs.
- There is a clear definition of who is and is not in the class.
- There must be enough members of the class to make individual lawsuits impractical. Typically, 40 or more is enough, while less than 21 is rarely accepted for a class action.
- The plaintiffs must all have a common set of legal questions or facts that underly their claims.
- The claims of the representative plaintiff must be similar to those of the rest of the class. This ensures the entire class is adequately represented.
- Filing a class action is the most efficient strategy for resolving the claims.
If a judge decides not to certify the case as a class action, they will dismiss it.
How to Start a Class Action Lawsuit
A class action lawsuit begins as any other civil suit. A lawyer files a complaint to outline the allegations and name defendants. With that complaint, they will request the court consider it a class action lawsuit. If the court certifies it as a class action, it then proceeds as other lawsuits do:
- Pre-trial activities. Lawyers on both sides have time to investigate, gather witnesses and evidence, hold depositions, and share information.
- Settlement negotiations. The defendants will most likely be willing to negotiate a settlement for the class. A trial can be lengthy and expensive as compared to a pre-trial settlement.
- Trial. Without a successful negotiation for a settlement, the case proceeds to trial. Lawyers on both sides argue the case and present evidence and witnesses. The jury determines if the defendants owe the class of plaintiffs damages.
- Appeals. If the class is successful, the defendants may appeal, delaying the collection of damages.
How to Join a Class Action
When a lawyer and plaintiff begin a class action lawsuit, the court makes a reasonable effort to notify all potential class members. This is required by the Federal Rules of Civil Procedure 23. Class actions may go through state courts as well, which have their own procedural rules. In general, the court makes every practical attempt to notify people of the class action.
If you receive a notice of a class action, it should outline the case’s basic details, the allegations, the defendant, and how to collect damages if the plaintiffs win a settlement or jury verdict. Collecting is usually a simple process of sending in a claim by mail or online.
The notification will also inform you that you have a right to opt out of the lawsuit. Most class actions are set up this way so that you do not have to do anything to join it, but you can opt out of it.
By opting out of a class action lawsuit, you lose the right to collect any resulting award. But it also means that you retain the right to sue the defendant individually. In most cases, it makes sense to stick with the class action.
What if I Don’t Receive a Notice to Join?
All reasonable efforts are taken to inform potential class members, but you may get overlooked. If you believe you should be part of a class action, look for notifications in the newspaper or search for them online. Contact the law firm representing the plaintiffs to discuss your inclusion in the class action.
Types of Class Action Lawsuits
Some legal situations are more suited to class actions than others. Some of the more common types of class action lawsuits include:
- Product liability.
A single defective product harms one person, but a flaw in a design or manufacturing process can produce hundreds of faulty products. For instance, in 2017, Honda agreed to pay $605 million in a class action settlement over Takata airbags that failed to inflate appropriately.[3] - Securities.
When investors suffer financial harm because of fraud and other illicit activities of a company, they may file a class action suit. Shareholders in a mine in Alaska recently filed a class action against Northern Dynasty Minerals, claiming the company misled them about a proposed mine and whether it was viable.[4] - Consumer.
A company may engage in illegal business practices that impact consumers, such as scams. Consumers can file a class action against the company. Recently, consumers began a class action against Folgers for false advertising for overstating how many cups can be made from a can of their coffee.[5] - Employment.
Groups of employees may come together to file a class action against a company for discrimination, wage issues, safety violations, and other problems that affected many individuals. Black employees of the city of San Francisco recently brought a class action against the city for discrimination.[6]
A class action lawsuit helps large victims hold companies accountable and recover damages. If you believe you have a case for a class action or want to join one, talk to a lawyer who handles these types of cases.