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What is a Class Action Lawsuit?
Every year, consumers miss out on countless dollars and unscrupulous corporations sell defective and mispresented products without consequence, all because of misconceptions about class action lawsuits. While some of these misconceptions are driven by deliberate misinformation campaigns, others stem from understandable misunderstandings of this more complex (but vastly more efficient) litigation process. This article explains the mechanics of class actions and outlines some matters to consider when deciding between individual or class action litigation.
How Do You Know if You Are Part of a Class-Action Lawsuit?
Many of us have been part of a class covered by a class-action lawsuit, whether or not we knew it. Class members not involved in the actual litigation may be unaware of the case until they receive a postcard or a seemingly random email notifying them that they might be eligible for compensation. Often, the available reward is money, but it might also be a gift card, store credit, a rebate or another economic benefit. Depending on the case, the value of the award may range from a few dollars to thousands.
Are Class-Action Lawsuits Worth It?
Class-action litigation is an invaluable tool for protecting the rights of consumers in circumstances where bringing their cases individually would be cost-prohibitive. By aggregating the claims of multiple injured consumers, class actions provide a means to right wrongs that would otherwise slip through the cracks.
Furthermore, class-action lawsuits play a vital role in holding careless or unscrupulous companies responsible for causing financial injuries to or violating the rights of a large group of individuals. Even if an individual consumer is out only a few dollars because of a defective or misrepresented product, the company that sold the product might reap millions in extra profits while thousands of other consumers are subjected to the same wrong. But a class action allows injured consumers to benefit and obtain reimbursement. In a class action, the few dollars spent by each consumer add up to a massive liability threat and thus a true incentive for the company to change its unfair practices. In this manner, class actions not only remedy injuries but also prevent them from occurring in the future. And by dishing out punishment for deception and product defects, class actions prevent unscrupulous companies from gaining an advantage over honest competitors.
Yet, like any case, a class action must begin with one or a small group of injured consumers. Someone has to initiate the lawsuit, and the person who does so is probably someone just like you.
How Many People Are Needed for a Class-Action Suit?
There is no specific number of plaintiffs required for a class-action suit to be filed. However, the plaintiffs have the most chance of a success if the group consists of more than 20 individuals. If there are more than 50 plaintiffs, the odds get even better.
What Is the Difference Between a Lawsuit and a Class-Action Lawsuit?
The class-action suit definition does not differ much from the definition of a traditional lawsuit, especially in the initial stages. The case typically begins like any other civil lawsuit, with a plaintiff and a defendant that the plaintiff claims is responsible for damages. The plaintiff begins the lawsuit by a filing a complaint and requests specific remedies from the court. Unlike a conventional action, however, the plaintiff in a proposed class-action asserts these claims not just on their own behalf but also on behalf of a class of similarly situated individuals. In other words, the plaintiff bringing suit indicates to the court that there are many other people who were similarly damaged and thus have similar claims against the defendant.
The mere allegation that many others were similarly damaged does not, however, create a class action automatically. The plaintiff also must prove that the case satisfies certain requirements, and because the information needed to establish compliance with these requirements is often in the sole possession of the defendant, plaintiffs rarely have enough proof at the outset of their case. Some amount of court-ordered exchange of documents and information, taking of depositions, and inspections of facilities will usually be necessary to obtain the evidence needed to show that the requirements have been met.
What Are the Requirements for a Class-Action Lawsuit?
Rule 23 of the Federal Rules of Civil Procedure establishes the criteria for certification of a class action in federal cases, and it’s largely mirrored by analogous rules in most states. Under Rule 23, a class action is appropriate where four universal requirements are met and the case falls into one of three categories. First, the case must fulfill the following four conditions:
- Numerosity: The proposed class includes so many people (class members) that adding all of them to the lawsuit as additional plaintiffs would not be practical.
- Commonality: There are at least some legal or factual issues common to the entire class’s claims.
- Typicality: The claims or defenses of the named plaintiff (who now seeks to be named the official representative of the class) are typical of the claims or defenses of the class members.
- Adequacy: The named plaintiff and their attorney(s) will fairly and adequately protect the interests of the class.
While all class actions must meet these four fundamental requirements, this is not the end of the court’s inquiry. A class action must also fall into one of the three categories described by Rule 23(b):
- Requiring each case to be litigated individually rather than as a class action would risk inconsistent verdicts and rulings, which might result in conflicting claims among class members and/or conflicting standards of conduct for the defendant going forward.
- The defendant has acted or refused to act in a way that affects the entire class, so that the class as a whole would benefit an official declaration of certain rights or facts or from an injunction requiring or prohibiting some action by the defendant.
- Questions of law or fact common to class members predominate over questions unique to each class member’s specific circumstances, and a class action is superior to other available methods for fairly and efficiently resolving the controversy.
If the four prerequisites are met and the case falls into one of these three categories, it will be certified as a class action, officially covering not just the named plaintiff but also the class of unnamed individuals who meet certain criteria. The specific scope of the covered class, often defined in terms of timeframes or types of injuries incurred, will be set forth in the court’s accompanying ruling.
What Is the Benefit of Class-Action Lawsuits?
On the individual level, class actions enable consumers to obtain compensation without the substantial time, effort, and expense involved in individual litigation. In some cases, the cost of prosecuting an individual lawsuit can exceed the money a plaintiff might expect to recover. Class actions remedy this problem by aggregating the claims of all similarly situated individuals. On this large scale, the case makes financial sense.
The advantages of class-action litigation are not limited to small-scale cases. Class actions just as frequently involve large purchases such as vehicles, HVAC units, shingles, flooring, and windows. While such cases involve far greater damages to each class member, they may also entail far greater litigation expenses, as the technical matters involved may require expensive expert testing and testimony. In cases involving more significant and more varying individual expenditures, each class member will receive differing compensation, determined based on a formula or claims process, but these cases are no less suited to take advantage of the benefits of a class action.
How Do I Find a Class-Action Lawsuit, and How Do I Know if I’m Qualified?
Many times, you will receive a physical letter or email telling you that you may be eligible to join a class-action lawsuit. If this is the case, the notification will typically outline the conditions you must meet to join the suit. You can also search online for class actions open to claims.
How Do I Join a Class-Action Lawsuit?
If a currently pending class action covers your situation, you may not need to do anything. Some class-action suits are opt-out lawsuits, meaning that you’re automatically part of the class unless you choose not to be. However, this can vary from case to case, so it’s a good idea to contact a lawyer for advice. At this point, you’ll probably be searching for “class-action lawsuit attorneys near me,” but you needn’t bother. Our nationwide law firm would be glad to give you a free consultation and walk you through the next steps of joining a class-action lawsuit.
How Do I Know if I Should File My Own Class-Action Lawsuit?
The top class-action lawyers at Parker Waichman can help you decide whether your situation meets the requirements for a class-action lawsuit or whether it would be best pursued as an individual action. For instance, some legal actions, like ones involving car accidents or consumer claims against a small business like a used car dealership, would be inappropriate for a class action, even if there are numerous plaintiffs. The cases are likely to be significantly different from each other, and the number of plaintiffs in those types of cases, even if there are several of them, is not likely to be so numerous that a class action is warranted.
If those cases are inappropriate for a class-action lawsuit, are there cases that are more likely the subject of a class-action suit? The short answer is yes. Here are some examples:
- Financial loss from the sale of defective consumer goods, such as defective medication or a case similar to a Takata airbag class-action suit
- Medical devices
- Securities fraud
- Widespread consumer fraud
- Unfair or discriminatory employment practices
- Corporate wrongdoing
- Mass-tort cases like an airplane crash
Even if your claim falls within the scope of an existing class action, this does not mean you cannot pursue it individually. Any potential class member whose rights might be affected by a class action has the right to opt out and retain the ability to proceed individually. When a class is certified, notice is sent to all potential class members explaining the nature of the case, the issues involved, and opt-out rights and procedures. The notice requirements for a class-action lawsuit are fundamental: the court will order the plaintiffs’ attorney to diligently search for and notify every person they can about the pending lawsuit.
Can the Court Refuse to Certify a Class Action?
Yes. The judge can refuse to certify the class and order that each injured party must join the lawsuit as additional named plaintiffs or pursue relief independently. Additionally, some statutes will prevent the filing of a class-action lawsuit, depending on the specifics of your case.
How Are Class-Action Suits Resolved?
In this respect, a class action is like any other case. Both sides have the right to a trial and may have the right to a jury trial, depending on the nature of the claim. If there is no right to a jury trial, then a judge will decide the case. The parties always have the option to resolve the matter before trial.
Cases frequently settle before trial. Since class-action lawsuits involve the rights of people who are not immediately involved in the litigation, the judge must take extra precautions to prevent those people from suffering an injustice. How much money a class member receives depends on the nature of the claim. The lawyers and the judge work out a distribution plan from settlement funds provided by the defendant. The lawyers and judge then determine whether each class member should receive an equal sum or whether some deserve more because their damages are more significant. In the latter case, each class member’s compensation will be determined based on a formula or claims process.
After the distribution plan is established, the court and lawyers then determine the costs of the litigation and the appropriate amount of attorneys’ fees. The individual plaintiffs have no responsibility to pay attorneys’ fees out of their pockets.
What Is the Statute of Limitations on Consumer Fraud Cases?
The statute of limitations for any case will vary from state to state. In New York state, the statute of limitations for fraud is six years. However, this time limit may be affected by specific rules particular to the circumstances of your case, which is why it’s important to trust class-action lawsuits for consumer fraud to a skilled law firm.
Well-Known Class-Action Lawsuit Examples
Some class-action lawsuits are so significant that they become lodged in the public consciousness and can even change the world. Here are a few well-known examples of cases you may not have realized were class-action lawsuits:
- Brown v. Board of Education
- In re Oil Spill by the Oil Rig “Deepwater Horizon”
- In re Target Corp. Customer Data Security Breach Litigation
- Lane v. Facebook
- In re Agent Orange Product Liability Litigation
- In re: Volkswagen “Clean Diesel” Marketing, Sales Practices, and Products Liability Litigation
- Pigford v. Glickman (USDA racial discrimination)
Types of Class-Action Lawsuits
Many class-action lawsuits involve the following types of issues:
How Much Money Do You Get from a Class-Action Lawsuit?
Like with many other types of lawsuits, the amount of a jury verdict or settlement will vary greatly depending on the specifics of the case and your losses. For large class-action suits, it’s not unreasonable to expect around $1,000 in settlements, and you’re probably unlikely to receive much more than $2,000. For example, plaintiffs involved in the Target credit breach lawsuit received settlements up to $1,200.
Are Class-Action Settlements Public Record?
Yes. If your lawsuit was settled in court, the settlement amount will be a part of public record. The only time this information is kept private is if the lawsuit is settled out of court. You’ll find that many class-action settlements go to court and are resolved there, meaning the results are public record.
What Is a Class Representative in a Class-Action Lawsuit?
The class representative is chosen to represent the plaintiffs. This person is chosen by the court when the lawsuit is classified as a class action and must be able to represent the interests of any plaintiffs involved in the case.
How Long Does it Take to Get a Class-Action Settlement Check?
Once a class-action settlement is approved and there are no further appeals, most plaintiffs receive their checks within six to nine months. Your attorney may hold your check until it clears, which should take seven to ten business days.
What Happens to Unclaimed Class-Action Money?
There are three options for unclaimed money from class-action suits. The remaining money can be split evenly among class members who filed claims. The unclaimed funds can be donated to a nonprofit organization dedicated to furthering public policies that pertain to the settlement. Or in some cases, the funds can be returned to the defendant. If you think that unclaimed funds were distributed unfairly, you can file a complaint with the court.
Why Choose Parker Waichman
for Your Class Action?
At Parker Waichman, we have ample experience assembling and pursuing class-action lawsuits. Our lawyers are dedicated to superior advocacy, and we are proud to have received numerous honors from the legal community that have helped to give us a reputation as one of the top class-action law firms, including a 9.8 out of 10 rating from AVVO and a listing in Best Lawyers, based on peer review.
Class-action lawsuits are incredibly complicated to litigate. Courts require the plaintiff to assemble the action correctly and fulfill a range of requirements both before and after the suit is filed. Having a class-action lawyer who is part of a national law firm like Parker Waichman will ensure that your rights are protected.
Speak to One of Our
Class-Action Attorneys Today
If you and others suffer an injury under the same set of circumstances, you could be eligible to bring a class-action lawsuit against the perpetrator of those wrongful actions. All it takes is one person willing to come forward and pursue compensation for themselves and similarly injured consumers. Contact our law firm today by filling out our online form or by calling 1-800-YOUR-LAWYER (1-800-968-7529) to get a free consultation with one of our experienced attorneys. We can help you determine the best way to defend your legal rights.
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