- What is a class action?
- What are some types of class action lawsuits?
- What are the public policy reasons supporting class action suits?
- Why are class action lawsuits controversial?
A class action is a type of lawsuit in which one or several persons sue on behalf of a larger group of persons.
While the subject matter of class action lawsuits can vary widely, two factors are almost always present for every class action:
- the issues in dispute are common to all members of the class, and
- the persons affected are so numerous as to make it impracticable to bring them all before the court.
Depending upon the type of class action, resolution of the lawsuit binds all members of the class certified by the Court. Under federal law, the rules governing class actions are found in Federal Rule of Civil Procedure 23.
Many of our cases started as the result of complaints by one or a handful of persons. If you have been harmed by a fraud, defective product, illegal conduct, or a deceptive practice, please feel free to contact us.
What are some types of class action lawsuits?
Examples of class actions include claims by:
- employees subjected to a pattern or practice of racial, age or gender discrimination by their corporate employer;
- homeowners and residents affected by a toxic spill in their neighborhood;
- consumers who purchased the same defective product or were harmed by unfair business practices committed by a corporation;
- patients prescribed a medicine with undisclosed, dangerous side effects;
- merchants and consumers who pay inflated prices for products caused by the anti-competitive activities of large corporations; and
- investors who are victimized by fraud committed in connection with the purchase or sale of stocks and other securities.
What are the public policy reasons supporting class action suits?
Class action lawsuits are designed to advance several important public policy goals. A class action is often the sole means of enabling persons, even those with serious injuries, to remedy injustices committed by powerful, multi-million dollar corporations and institutions. As stated by former United States Supreme Court Justice William O. Douglas, "The class action is one of the few legal remedies the small claimant has against those who command the status quo."
In other situations, each person within a large group may have suffered only limited damages and the cost of individual lawsuits would be far greater than the value of each claim. The total damages, however, to the class could be quite large. The wrongdoer would have the incentive to continue its fraudulent conduct but for a class action.
"In the age of mass production and mass marketing, class actions are necessary to allow individuals to take on multi-national corporations, where expenses of litigating would be otherwise prohibitive. The class becomes a de facto corporation for the purposes of suit, allowing individuals to band together and be equally matched against corporate defendants," Lieff Cabraser partner and class action attorney Elizabeth Cabraser has observed.
Finally, where the defendant has engaged in a pattern of wrongdoing, a class action can provide an effective remedy for the group without incurring the costs of thousands of separate lawsuits and risking inconsistent decisions by the courts.
Why are class action lawsuits controversial?
Increasingly the public sees the class action lawyers, both defense counsel who work for hourly fees regardless of the outcome of the case and plaintiffs' counsel who only receive a recovery if the class prevails, as the only winners in such a system.
This image of class actions, however, is often advanced by organizations and large corporations seeking to undermine the ability of consumers and small and mid-sized business owners who would otherwise be unprotected against corporate misconduct. Without private enforcement of our rights through the civil justice system, we would be dependent upon government regulation to prevent and remedy corporate misconduct.
The ability of corporations to prevent effective government regulation has been demonstrated repeatedly. A recent example is Toyota's "success" in stopping federal regulators from ordering recalls of its vehicles that suddenly accelerated after the problem first came to the attention of the National Highway Traffic Safety Association.
Before any class action settlements may occur, the judge presiding over the case must give notice of the settlement to the class, allow all who wish to be heard to state their positions and/or objections, and approve the settlement, including the attorneys' fees, only if the settlement and fees are fair and reasonable.
This summary of class actions is intended to give lay persons a basic overview to class actions. It is for informational purposes only and does not constitute specific legal advice. Nor is this summary intended to create, and receipt does not create, an attorney-client relationship. Please read our disclaimer.