A class action lawsuit is a legal action in which one or more “named” plaintiffs sue a defendant on behalf of a larger group of people. The group is known as a class and the named plaintiffs are referred to as representatives of the class.
These cases differ from individual plaintiff lawsuits in several significant ways. The differences include:
- Number of people represented
- Recovery even if individual damages are small
- Potential outcomes and precedent
These suits are brought on behalf of a large number of people joined together as a class, rather than just on behalf of an individual plaintiff. They also allow for recovery for smaller per person damages that would otherwise be impractical to sue for due to the cost of litigation. The outcome of a class action lawsuit can include changing the behavior of the defendant and setting precedent. For example, the cases can sometimes stop the defendant and others in the industry from unfair business practices, such as false or misleading advertising.Benefits of Class Actions
The benefits of class actions can include:
- Efficient method for handling a large number of claims
- People with relatively small damages can recover
- Injunctive relief
- Public policy benefits
As a member of a class, someone with minimal losses may be able to recover compensation where otherwise the costs of litigation may negate or even exceed the losses suffered. Successful lawsuits can also result in injunctive relief, which means that the defendant will be prohibited from continuing the actions or behaviors in dispute in the future. These suits can also allow important public policy precedents to be set that benefit all members of society, such as preventing manufacturers from not adequately warning of possible dangers of their products or stopping an illegal labor practice by an employer.Should My Case Be a Class Action?
Although many different types of cases can become class actions, the following are a list of some of the most common:
- A group of consumers who purchased a defective product or were misled by false advertising or deceptive business practices
- Employees who were subjected to illegal practices by their employer, such as wage and hour violations or age discrimination
- Landowners and community members affected by the defendant causing harm to the environment, such as air or water pollution
- Customers and investors who suffered losses due to illegal business practices such as charging of unlawful fees, predatory lending or breaches of securities laws
Successful lawsuits allow class members to recover damages. The types of damages recoverable by a class include:
- Economic/monetary losses
- Statutory penalties
- Costs of litigation, including attorney fees
Economic losses, such as lost wages or illegal/excessive fees, may be recoverable in a class action suit. Some statutes also provide for penalties, which can be awarded to class members if the case is won. Costs of litigation, including attorneys’ fees, may also be awarded in certain cases.State vs. Federal
These lawsuits can be filed in state or federal court, and each venue has its own advantages and disadvantages.
Class actions filed in federal courts are governed by the requirements outlined in Federal Rule of Civil Procedure 23. In order to be certified as a class action under Rule 23, the case must satisfy the following requirements:
· the class is so numerous that joinder of all members is impracticable;
· there are questions of law or fact common to the class;
· the claims or defenses of the representative parties are typical of the claims or defenses of the class; and
· the representative parties will fairly and adequately protect the interests of the class.
There must be at least some factual and legal questions that are common to the class members. For example, if a car manufacturer produced 100,000 vehicles with defective engines, a class could be comprised of the 100,000 owners who suffered losses due to the defective engines. However, an owner who suffered losses because the vehicle had faulty brakes would not be able to bring that claim as part of the defective engine class action because that claim involves different factual issues.
In terms of the size of the class, sometimes called “numerosity,” it would be impractical to bring 100,000 plaintiffs in front of a court separately. The courts would be overwhelmed and the redundancy of 100,000 identical claims would be extremely inefficient. Further, the representatives must provide fair and adequate protection for the class. The representatives’ claims must be typical of those of the class, and the representatives must provide fair and adequate protection for the interests of the class.
To determine whether a class action can be brought in federal court, courts will look at whether the claim arises under federal law or meets one of the criteria of 28 U.S.C Section 1332(d). Section 1332(d) gives the federal courts jurisdiction over a class action where the amount in controversy for the whole class exceeds $5,000,000 and:
- Any member of the class is a citizen of a state different than that of the defendant; or
- Any member of the class is a citizen or subject of a foreign state and the defendant is a citizen of a state; or
- Any member of the class is a citizen of a state and the defendant is the citizen or subject of a foreign state
Many states have adopted their own versions of the federal rules regarding class actions, and their requirements can vary from state to state.Get Help
Class action lawsuits can be an effective way to bring together groups of people with common legal or factual disputes against a defendant in a way that minimizes cost and forces defendants to stop the illegal or negligent activities at issue. A class action attorney can help a class representative navigate the complicated legal landscape, ensuring the best results for all members of the class and society as a whole.
Call (844) 724-9200 to obtain a free case evaluation. We've assisted hundreds of thousands of class members and have a 10.0 attorney rating on Avvo.