Class Action Lawsuits

What is a Class Action Lawsuit?

When you have been hurt because of the wrongful act of another person, you often have to go through a cost-benefit analysis. What’s the potential recovery, and how much will it cost you to get compensation for your losses? If the costs of hiring legal counsel, filing all appropriate documentation, and gathering evidence are more than you expect to get in return, you’ll probably choose to accept your losses and move on. There is a way, however, that you may be able to share the expenses involved in litigation with other people who have suffered similar losses—through the filing of a class action.

A class action lawsuit allows you to file and prosecute a lawsuit on behalf of a larger group, all of whom have suffered a similar injury because of the wrongful actions of the same person or company. A class action may be filed in federal court, or in state court, if state rules of civil procedure allow such a lawsuit.

Class action lawsuits, however, are about more than effective case management; the considerations that led to the development of the class action include:

• the protection of the defendant from widely varying damage awards
• the protection of individuals who might not otherwise know they have a claim
• the provision of a convenient and economical means for disposing of similar lawsuits, and
• a way of spreading litigation costs among a large number of claimants, so that defense attorneys can’t use the cost of litigation as a tactic

Moreover, class actions minimize the use of the resources of both the courts and the parties by permitting an issue potentially affecting every class member to be litigated in an economical fashion.

The Class Action Process

To certify a lawsuit as eligible for prosecution as a class action, district court must make the following findings:

• The number of class members renders it impracticable to join them in the action
• The class members’ claims share common questions of law or fact
• The claims or defenses of the proposed class representatives are typical of those for the rest of the class, and
• The proposed class representatives will adequately protect the interests of the entire class

Furthermore, the district court must make at least one of the following findings: (1) requiring separate actions by or against the class members would create the risk of inconsistent rulings, or a ruling with respect to individual class members may be dispositive of other class member claims, thereby substantially impairing or impeding their ability to protect their interests; (2) the party against whom the class seeks relief has acted or refused to act on grounds generally applicable to the class so that injunctive or declaratory relief as to the entire class would be appropriate; or (3) common questions of law or fact common predominate over class-member–specific questions, and that proceeding by way of class action would be superior to other available methods for resolving the dispute.