If you have ever spent time watching TV news or reading the newspaper, chances are you have heard about class action lawsuits. These are large cases involving numerous plaintiffs, and often substantial settlements or awards as well.
For example, in 1998, well-known tobacco companies Philip Morris, R.J. Reynolds, and others agreed to a $206 billion settlement to cover the costs of smoking-related illnesses. In 2016, the oil company BP was ordered to pay $20 billion in a settlement over environmental damage caused by an oil spill in the Gulf of Mexico.
What exactly is a class-action lawsuit, however? How is one filed? Read on for more information about class action lawsuits.
What Is a Class Action Lawsuit?
Many types of personal injury claims have more than just one victim. Often, these cases involve a product or medication on the market that has caused injuries to many people, while others, like the BP oil spill, involve negligence at the worksite that results in injuries, death, and significant environmental damage that impacts not only individuals, but also local communities and governments in the area.
A class action is a procedural device designed to relieve the burden on the court of hundreds or thousands of claims involving the same circumstance. Through the class action procedural advice, one plaintiff and his or her attorney will file the lawsuit on behalf of a group of affected people, known as a class.
To join a class, individuals must have claims that are similar to others in the class. A judge must certify the class before the case can proceed, and this certification requires the lead plaintiff to show that the claimants have a valid case against the defendant(s) and that all class members have similar claims.
Once the class has been certified, all plaintiffs are notified by mail. If a plaintiff wishes to opt out of the class, he or she must follow a specific procedure to do so. Either state or federal court can hear these cases, but federal court cases require damages of at least $5 million and at least 100 plaintiffs to join the class.
The vast majority of class action cases resolve by settlement. Each plaintiff receives a portion of the settlement, which can consist of cash, a refund or replacement, or even services.
The Steps to Filing a Class Action Lawsuit
Filing a class action lawsuit is quite a bit more complex than the process of filing a single lawsuit.
Plaintiffs file class-action cases by completing these steps:
- Determining whether the case qualifies for class action certification. Your attorney will consider many factors, including how many people were injured in the same way, by the same product or circumstance; whether a lawsuit making the same allegations was filed; whether the plaintiff has time to file a claim under the applicable state’s statute of limitations; research into the historical success of similar claims and cases that were already resolved in court; and ensuring that a bankruptcy filing does not shield the defendant. Because your attorney’s main interest is protecting your right to file a claim and pursue the maximum amount of compensation available to you, he or she will also consider whether the class action best serves your interests, or if you have a better chance at a successful resolution through an individual personal injury claim.
- Filing the lawsuit. Your attorney will draft your complaint, outlining a proposed class of individuals who could join the claim, and determining if the class is all in one state or if affected parties live throughout the nation.
- Getting the class certified. Until a judge evaluates the proposed class and opts to certify the classification, your claim is filed as an individual case that is often called a putative class action. To determine if a class action is appropriate for the case, the judge will consider how many people the case potentially affects and whether hearing all the cases as a class instead of as individual claims would aid the court. The judge will also consider whether the individual cases the claim would represent all pose common questions of law and fact and if the lead plaintiff’s claims are typical of all class members.
- Discovery. In the discovery phase, the lawyer begins gathering evidence, including documents from the defendant company and deposing witnesses.
- Resolution of claims through settlement or trial. Most class actions will resolve through a negotiated settlement between the defendant company and the lead plaintiff. Often, a defendant will establish a fund to compensate victims. All class action settlements must be evaluated and approved by a judge who looks over the settlement provisions to ensure it is fair to all members of the class. If the defendant and the class cannot settle, the case may go to court. In court, the lead plaintiff and others may need to testify. It is still possible for the case to settle during the trial, as long as the jury has not yet rendered a decision.
- Notifying the class members. After a case resolves, the lead plaintiff’s attorney will notify other members of the class. This notification will include details of the settlement, the procedure for opting out of the case, and a description of the group of individuals may claim part of the settlement.
Joining a Class Action
Most class actions are opt-out lawsuits, meaning that you do not have to do anything to join the lawsuit. To obtain a portion of the settlement or judgment, you will need to submit a claim either online or through the mail by following the instructions listed in your notification. It generally does not cost anything to join a class action, as the lawyers representing plaintiffs work on a contingent-fee basis. This means that their clients do not have to pay for the attorney’s services until a case resolves.
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FAQs About Filing a Class Action Lawsuit
Class action cases have an additional layer of complexity due to the number of individuals in the case and the need to ensure that all cases in the class are factually similar. Here are some of the questions our clients ask us most frequently about filing a class-action lawsuit.
What types of cases are generally certified as class actions?
The class action process is not appropriate for all cases, only those with many affected parties with similar claims.
The cases most often involved in class actions include:
- Cases against an employer regarding wages, working hours, sexual harassment, discriminatory hiring practices, hostile workplaces, or other matters that violate state or federal employment laws.
- Environmental issues affecting entire communities, such as sources of water, air, or soil pollution.
- Cases against banks and other financial institutions for predatory lending practices, financial securities fraud, and other financial misconduct.
- Cases affecting the civil rights of a group of individuals, including police misconduct, sex discrimination policies in major corporations, and unfair treatment of people with disabilities.
- Product liability. Everyone in the manufacturing chain must ensure that consumers can safely use products according to labeling instructions. Product liability continues to be the largest source of class action claims, with cases involving items such as defective drugs, auto parts, appliances, or even children’s toys.
What are the benefits of class action cases?
- Relieve some of the court burdens that would ensue plaintiffs filed hundreds of factually similar cases against the same defendant in courtrooms across a region or the nation.
- Provide restitution to individuals who otherwise would not obtain relief for the harm caused by the error or omission that gave rise to the action.
- Ensure that all plaintiffs who the defendant harmed in similar ways are treated the same as others.
- Motivate defendants to offer a fair settlement since there are so many plaintiffs who have been affected.
When is a separate case preferable to a class action?
In some circumstances, it is more beneficial for a claimant to file a separate case. Those circumstances include:
- The plaintiff will receive a significantly smaller award through the class action process because of the number of affected parties than he or she would in an individual case.
- The plaintiff needs the case to resolve quickly and cannot wait for the case to go through the complex certification and discovery processes.
- The plaintiff and/or his or her attorney dislike the representation the lead plaintiff’s attorney provides.
- The settlement would result in coupons or rebates rather than cash that the plaintiff needs to cover expenses resulting from the harm committed against him or her.
How is a class action different from MDL?
While multidistrict litigation (MDL) provides some of the same time and effort savings as a class action, there are distinct differences between the two procedural formats.
- MDLs, like class actions, involve joining many cases into one. However, unlike the class action, MDLs only remain joined for the pre-trial phases of the case. After discovery, the cases return to their individual jurisdictions, where defendants can negotiate settlements individually.
- Once a case is certified as a class-action lawsuit, the individual cases that the claim represents remain joined, with a settlement all claimants share.
How can an attorney help with my class action case?
If you believe that your situation can result in a class-action case, an attorney can provide you with more information about how to file these cases and can discuss with you whether a class action is appropriate. They can also talk about more beneficial legal options.