What Is a Class Action Lawsuit?
A class action lawsuit can occur when many people have been harmed or injured by the wrongful actions or negligence of the same person, company, or other entity. If the harm or injury is similar, the individuals affected can join together to file one lawsuit, rather than each of them filing a separate suit. The individuals joining together are known as a “class” and with a trusted attorney they file what is called a “class action” lawsuit.
The class is usually represented by one named plaintiff who stands for all members of the class.
Types of Class Action Lawsuits
Class actions can stem from several different kinds of harm, injuries, or wrongful actions. Common types include:
- Defective products – Prescription drugs with harmful side effects and vehicles whose manufacture causes them to be unsafe are both examples of defective products.
- Unfair business practices – Hidden or excessive fees and misleading information in advertising or on labels are all examples of unfair business practices.
- Employment practices – Discrimination in hiring and promotion and inequities in pay or other compensation based on age, gender, or racial categories are examples of unfair employment practices.
Plaintiffs can seek compensation for damages applicable to their case, including medical bills, lost wages because of time lost from work, lost earning potential, and pain and suffering.
Certification of a Class
Before a class action can go forward, the class must be certified. According to the Federal Rules of Civil Procedure (FRCP), a class action can be certified if the following criteria are met.
- There are “common questions of law and fact” in all the cases in the suit, so that they all stem from the same issue and wrongdoing, and would be resolved under the same laws.
- The number of potential claimants is high enough that it is not practical to put them together in one standard (i.e., non-class action) lawsuit.
- The plaintiffs named as representatives of the class must have the same or substantially similar claims as all other members of the class. Any defense against the claims would be the same or extremely similar.
- The plaintiffs can provide fair and adequate protection for the class.
Class action lawsuits can be filed in either federal or state court. State courts are not bound to follow the FRCP, but many do.
Potential Benefits of a Class Action Lawsuit
A class action lawsuit can have numerous benefits.
First, the cases are more efficient for all parties, including the court system. Class actions are heard in one courtroom, with the same testimony, the same evidence, and the same presentation of the plaintiff and defense cases. This is generally a savings of time over the alternative, many different cases on substantively the same issue.
Second, class action suits eliminate the possibility of separate individual cases receiving different verdicts. The uniformity is helpful to plaintiffs, as it means both verdicts and compensation will be similar. It is also helpful to defendants, who have the opportunity to resolve multiple similar claims.
Third, the cost to plaintiffs of bringing a suit can be less, because the claims are shared among multiple plaintiffs. These lower costs may make pursuing a legal claim more feasible for many prospective plaintiffs.
Class actions are often paid for on a contingency fee basis so that plaintiffs pay only if their case is won.
Potential Drawbacks of a Class Action Lawsuit
A class action lawsuit can also have potential drawbacks.
First, the cases can be complicated and can take a long time to wind their way through the court system. Appeals may also be a higher risk in some class action cases, particularly when the defendants are companies with deep financial pockets.
Second, members of a class, once they agree to become members of it, no longer have the right to bring a suit individually. Potential members of a class have the opportunity to be excluded from the class if they want. It’s referred to as “opting out.” If you do want to opt-out, you can bring an individual suit potentially resulting in optimal compensation. People who opt-out will not be in the class action suit, so will not have any part in the verdict or any damages received.
What Should You Do if You Think You Might Be Part of a Class Action Case?
Once a class action has been certified and a lawsuit has been filed, the lawyers and the court will try to identify all people who might be included in the class. They will make every reasonable effort to notify every member of the class action suit, which includes mailing potential plaintiffs a Notice of Class Action.
The Notice of Class Action will describe the case, name the specific allegations in the suit, describing the right to opt-out of the class, and make clear that any settlement or judgment will be binding on every member of the class.
If you receive a Notice of Class Action, you don’t need to do anything in most instances. If the case is settled, you’ll receive a Notice of Settlement of Class Action. You will be provided with your part of the settlement after this.
If you didn’t receive a Notice of Class Action but wonder if you might be part of a class action, there are several steps you can take. First, search the legal notice section of a local newspaper. If you don’t see a notice, search online for the name of a person, product, or entity that might have caused the harm or injury and the words “class action.” If, for example, a vape pen exploded in your pocket, search for “vape pen” and “class action.” If a class action exists, you will likely find a website about the suit or a webpage for the attorneys in charge of the suit.
