What is a Class Action Lawsuit?

Thousands of millions of consumers who experience similar harm by the same defendant or defendants can file class action lawsuits in proper civil courts for redress. Class action litigation is economical because it merges many claims into one instead of resolving them independently; this saves valuable court time and legal resources.

What is a Class Interval?

Class interval relates to the time interval during which the defendants allegedly participated in unlawful conduct.  Class members affirm this information in their pleadings, and lead attorneys show class interval facts in notices published after courts certify their lawsuits.  The courts can further add or reduce time to class intervals after examining evidence during preliminary hearings.

What Are the Advantages of Suing Big Businesses?

Class action lawsuits force businesses to explain their wrongful actions. Companies must further publicly reply to initial pleadings and retort subsequent motions after the courts certify complaints. Class members can win prosperous jury awards or persuade defendants to negotiate and settle controversies before heading to court. Class action lawsuits may further sway defendants to modify their tortious acts.

What Types of Harm Do Class Members Allege in Their Arguments?

Class action injuries come in many forms, but all tort claims hold one element in common—a defendant’s invasive, universal injustice affected many individuals who sustained damages that require compensation.

Popular class action lawsuits include:

Consumer Fraud

Consumers deceived for financial gain from fraudulent business practices:

  • False or misleading advertising
  • Violations of consumer protection laws
  • Placing defective products into the marketplace (i.e. pharmaceuticals) 

Breach of Privacy Rights

Disclosure of consumer personal or financial information from insecure handling or releasing too much information in violation of consumer protection laws:

  • Negligent protection from data hacking
  • Electronic Data Act violations
  • Fair Credit Reporting Act (FCRA) breaches

Antitrust

Consumers forced to pay more for products because of unfair competition. Antitrust class actions arise when corporations produce comparable or identical products or services and collude to raise or fix prices. This unfair business practice prevents buyers from enjoying traditional supply and demand price control in the marketplace.

  • Airlines companies fixing ticket prices
  • Software makers limiting third-part access
  • Telecommunication businesses preventing competition

 Employment

Employees abused through violation of labor laws and statutes:

  • Unpaid overtime
  • Paying less than minimum wage
  • Misclassification of job duties
  • Employment discrimination based on race, age or gender

 Securities Fraud

Investors defrauded out of capital from deceit disseminated by financial institutions.

  • Securities and stock fraud
  • Stockbroker deceit
  • Ponzi schemes

 Environmental Disaster

Public environmental damage from man-made catastrophes:

  • Oil spills
  • Toxic substance release
  • Water contamination

How Much Do Class Action Lawsuits Cost?

Lead attorneys and separate law firms named in class action lawsuits pay the claim’s costs and out-of-pocket expenses. These advocates work on a contingent fee basis and can seek reimbursement for their expenditures and request attorney fees only if they prevail.

What is a Lead Plaintiff?

The lead plaintiff is commonly the individual who initiates the lawsuit. The courts appoint lead plaintiffs and assign them the duty of proceeding with legal claims in good faith on behalf of all class members. Sometimes referred to as “named plaintiff,” the lead plaintiff often bears the largest financial recovery interest in the lawsuit.

Who are Settlement Administrators?

The court appoints third-party settlement administrators to control  settlement claim processing. Administrators hold many duties that include:

  • Creating court-approved websites containing lawsuit information
  • Informing class members on how to register claims
  • Distributing settlement notices to class members
  • Managing electronic claim form submission
  • Reviewing claims and either permitting or disallowing joinder
  • Supplying class members with court documents, updates and status
  • Paying out valid claim awards

Who is Lead Counsel?

Civil procedure requires named plaintiffs to choose a court-appointed lead counsel shortly after filing their cause of action. Lead counsel may be one or two lawyers or an entire law firm. These advocates litigate class actions for lead plaintiffs but further hold fiduciary obligations to represent the class members’ best interests.

Why Do Plaintiffs Prefer Contracting Class Action Specialists as Lead Counsel?

Experience and Capital Resources—paramount considerations when choosing class action legal representation.

Class action filings impose complex legal obligations and duties on lawyers, and they cost a lot of money to litigate. These truths compel lead plaintiffs to retain attorneys because they have deep pockets to satisfy out-of-pocket expenses and they possess the expertise to win million-dollar verdicts and settle big with large corporations.

How Does a Class Action Lawsuit Start?

Individuals or minor bodies of plaintiffs start the processes by finding class action specialists to register their complaints in specific venues. Defendants respond and most always plead motions for dismissal. The judiciary then sets up a certification hearing to examine the lawsuit’s merits.

Is There A Minimum Number of Class Members Needed To File?

No. Civil procedures do not require lead plaintiffs to show a “specific” number of class members before registering their class action lawsuits. The law nonetheless mandates classes to be diverse enough so that litigating one large lawsuit becomes feasible. Class members can conversely argue that bringing individual lawsuits before the court on the same matter would be impractical or impossible due to numerosity.

How Does One Join a Class Action Lawsuit?

Folks can join a class action in two forms.

  • Find a lawyer, file a cause of action and serve as lead plaintiff.
  • Join an existing class action as a class member.

Let’s explore the second approach. Judges certify consumer classes after lead counselors successfully prevail in their classification hearings. Class administrators and lead attorneys investigate to locate potential class members by publishing class action notices.

 

Administrators often run advertisements, TV spots, and use the Internet to educate consumers about pending litigation. Attorney websites, akin to the one you’ve landed on right now likewise post the latest class action lawsuits and settlements available for joinder. If individuals qualify as a class member, they’ll just follow the notice’s instructions for seeking permission to join.

What Is Class Certification?

Certifying the lawsuit is a critical step (if not the most important step) in class action proceedings. The process embodies lead counsel, lawyers for the defendant(s), a preliminary hearing and a judge. The courts will rule here if lead plaintiffs and potential class members meet civil procedure requisites to proceed with consolidation:

  • Did the defendant’s harm reach enough individuals to warrant proceeding with one large complaint, as opposed to hearing each claim independently?
  • Do all plaintiffs share the same questions of law and fact? Or, are the facts surrounding the dispute identical for each class member, and do all members plead the courts to read the law in the same manner?
  • Have all class members suffered equal degrees of harm, and will one award remedy all the plaintiffs’ damages?
  • Do lead plaintiffs and their attorneys commit to represent every class member, and does lead counsel own the legal expertise and the economic ability to litigate adequately?

What if the Courts Dismiss the Class Action?

Judges carry the power to dismiss class action claims when they lack merit or when lawsuits don’t follow the Rules for Civil Procedure. Lead counsels always have the opportunity to modify their complaints to address a defendants’ demur.

What Information Do Administrators Include in Certification Notices?

Courts order attorneys and administrators to perform reasonable attempts to notify all consumers about the defendant’s harm. Notices moreover must carry “opt in” or “opt out” choices. However, some certifications bereave opt out power when the courts hold every eligible class member automatically enters the lawsuit and must accept its outcome.

The law ergo requires certification notices to plainly and concisely affirm:

  • The lawsuit’s nature.
  • The consumers the courts certified.
  • Causes of action, legal issues, and defenses.
  • Class members’ right to seek independent legal representation.
  • Exclusion disclosures and methods for opting out.
  • Acknowledgement to class members that judgment is binding and final.

What Does Opt In Mean?

Most eligible claimants opt in systematically after the courts order class certification. Some employment class action lawsuits still require class members to opt in, so it’s always necessary to read certification notices carefully.

How Can I Opt Out and Why Should I do It?

Complainants who disagree with a class action’s legal issues (negligence, products liability), questions of law (legal duties or evidence), or damage awards (general damages, consequential damages) may seek action against the defendant individually by opting out of the litigation.

Selecting this option removes the person from jury awards or settlements reached by lead counsel; however, they maintain the right to pursue different remedies against the same defendant over the same harm.

Victims usually remove themselves from class action lawsuits when their damages exceed those of regular class members. Plaintiffs must opt out in writing, and notices give precise instructions on how to do so.

Which Courts Hold Personal Jurisdiction To Hear Class Action Lawsuits?

State Superior Court and federal court hear class action lawsuits, and civil procedures for filing claims are similar in every jurisdiction. Some federal courts move lawsuits to state court when they identify compelling state interests among legal issues surrounding harm.

Federal courts hold personal jurisdiction when:

  • Parties are citizens of different states;
  • the harm violates federal law; or,
  • when the amount in controversy exceeds $5,000,000.

What if The Lawsuit Goes to Trial?

Class action trials work the same as traditional civil proceedings; lead counsel, defendants and named plaintiffs appear before the court to present their disputes. Judge and jury hear augments from both sides, and a jury verdict determines the outcome. The same is true for class actions that seek only equitable remedies (injunctions, specific performance), except chancery courts omit juries when resolving controversies.

What is a Mass Tort?

Mass tort is like a class action; it involves many plaintiffs suing the same defendant(s), but the process evolves from numerous individual claim filings. The courts merge these actions into one lawsuit heard by a single judge for creating efficiency, reducing legal costs, and deciding disputes quickly.

How Do Class Actions Differ from Mass Tort Lawsuits?

Class action lawsuits require plaintiffs to band together and share one claim with one remedy motion; in mass tort, plaintiffs consolidate their lawsuits, but maintain their individual lawsuit arguments and remedies. Mass torts likewise have many attorneys representing multiple injured parties, contrary to having just one lead counsel representing an entire class.  

What are Damage Awards?

Juries redress harm by awarding damages. These are usually money awards applied as a substitution mean to place class members in positions they occupied before the harm existed.

What are Compensatory Damages?

Compensatory damages are cash awards that pay class members for their loss or injury.

Compensatory (actual) damages come in two forms:

General Damages: arise naturally from the wrong. Plaintiffs normally aren’t expected to plea these damages because the courts presume the purported harm puts defendants on notice that class members will pursue such remedies.

  • Pain and suffering
  • Emotional distress
  • Loss of enjoyment of land, limb or life

Special Damages: losses or expenses unique to the class. Conversely, lead counsel must assert and prove special damages because defendants cannot infer or estimate them from the wrong:

  • Wage losses
  • Medical expenses
  • Property damage 

What are Punitive Damages?

Juries may award class members punitive damages above compensatory damages to punish a defendant’s willful, wanton, or malicious conduct or to restrain the defendant or others from engaging in such behavior.

What If Damages Are Minute?

Minor harm in class action claims may lead to serious consequences when the harm affects class members as an entity.

For example: The courts may hold a business unjustly enriched itself after making millions of dollars from slightly overcharging thousands of shoppers or from deceiving buyers by not disclosing minute product details during a purchase.

What is a Class Action Settlement?

Both parties may stop legal proceedings and settle by offering class members monetary awards before trial. Defendants don’t assume culpability when settling but rather resolve class actions to spare them court costs or to lower risk of overpaying damages that could arise from relaxed jury verdicts.

Some companies further wait to settle until after judges certify the lawsuit while other businesses pay to avert negative exposure that would stem from litigating the action in public.

Settlements frequently develop during mediation; and the law compels the judiciary to conduct fairness hearings after both parties notify the courts they’ve come to an agreement. If settlement terms stand, administrators notify class members about their award and instruct plaintiffs on how to receive compensation.

What Is a Fairness Hearing, and Can Class Members Attend?

The law requires courts to hold fairness hearings for scrutinizing proposed awards after parties reach settlements. Class administrators give plaintiffs notice of such proceeding. Class members may likewise attend fairness hearings and object if they oppose the settlement. Judges will either confirm or strike down the award after hearing arguments and opposition testimony.

What Is an Open Settlement?

Open settlements accept claims from eligible class members. Class action authority’s comb through open class action settlements and publish them online to advise millions of potential plaintiffs about the consumer awards available for claiming.

What Is a Closed Settlement?

Class action settlements contain deadlines for registering claims, and once the target date passes, the settlement closes.

Can People Submit Claims After Settlements Close?

Probably not, but occasionally, yes; most courts don’t allow victims to submit claims after settlement deadlines pass. Yet, some jurisdictions provide reasonable extensions when circumstances warrant.

What Happens After Plaintiffs Receive Their Awards?

Class members who settle and receive compensation generally cannot file lawsuits against the same defendant over the same legal issues presented in the settled class action.

This means award acceptance binds plaintiffs to settlement terms, unless, of course, class members affirmatively reject awards by opting out of the claim.