What is a Class Action?

A class action lawsuit allows a single plaintiff or small group of plaintiffs to file suit on behalf of a larger group. Class actions can be filed over defective products, fraud, or any other case in which a large number of people have suffered the same or very similar injuries.

When is a Class Action Appropriate?

Class actions are most often filed in cases where individual damages are relatively small. Grouping plaintiffs together as one class is more cost-effective than pursuing individual lawsuits. However, a class action may only be filed when the following four qualifications are met:

  • Numerosity: There are enough claims to justify a class action.
  • Commonality: All of the claims are sufficiently alike
  • Typicity: The class representatives’ claims are typical of all claims
  • Adequacy: The representatives are up to the task of representing the class fairly and well

Typical Class Action Lawsuits

Class action lawsuits can be filed in a wide range of cases, including those that involve:

  • Drugs and medical devices
  • Consumer products
  • Employment, including race and gender discrimination, wage theft
  • Environmental disasters, such as oil spills
  • Securities fraud
  • Consumer fraud
  • Data breaches

What Laws Govern Class Actions?

Class action lawsuits are governed by Federal Rules of Civil Procedure Rule 23 and 28 U.S.C.A. § 1332(d). Class actions may be brought in federal court if the claim arises under federal law or if the claim falls under 28 USCA § 1332(d): Under § 1332(d) (2), federal jurisdiction applies to any civil lawsuit where the amount in controversy exceeds $5,000,000 and:

  • Any member of a class of plaintiffs is a citizen of a State different from any defendant; or
  • Any member of a class of plaintiffs is a foreign state or a citizen or subject of a foreign state and any defendant is a citizen of a State; or
  • Any member of a class of plaintiffs is a citizen of a State and any defendant is a foreign state or a citizen or subject of a foreign state.

Who is the Class Representative?

In a class action, one individual or group of individuals will be designated the “Class Representative,” and will be responsible for representing the interests of all the class members involved in the lawsuit.  The Court will appoint the representative when it certifies a lawsuit as a class action. The Class Representative will consult with plaintiffs’ attorneys regarding settlement offers, and is the only party who may object to a settlement agreement. The representative may also receive a larger percentage of any settlement, due to their level of participation in the case.

What Kind of Compensation is Usually Awarded in a Class Action?

Class action awards usually include monetary damages that are placed into a fund to benefit all members of the class. Payment to the members usually follows a “plan of distribution,” with each member receiving a percentage of the fund minus attorneys’ fees and costs.

A class action may also result in a declaratory judgment, in which the Court declares the rights and obligations of the class versus the defendant. Class action plaintiffs may also ask for injunctive relief, in which the defendant is prohibited from engaging in harmful conduct, or ordered to undertake some positive action. For example, a company may be ordered to stop discriminatory practices based on gender. The defendant may also be required to institute a monitoring program to ensure that those practices are eliminated.

How Do I Join a Class Action Lawsuit?

In most cases, an individual becomes a member of a class automatically if they meet the eligibility criteria described in the lawsuit. Prospective class members can choose to opt-out of the class action  if they would rather file an individual lawsuit.

How is a Class Action Attorney Paid?

Class action attorneys are usually paid out of the fund recovered by the class. The amount can range from 25 to 33%, but must be approved by the Court. In certain cases, the defendant may be required to pay the plaintiffs’ attorneys fees.  This is most common in cases where the defendant has been found to have broken the law, including consumer protection statutes and labor and employment laws.

How Do I Find a Class Action Lawyer?

The nationwide law firm of Bernstein Liebhard LLP has successfully represented hundreds of class action plaintiffs. If you are interested in pursuing a class action lawsuit, please contact our Firm today at (888) 994-5118.

  1. Law Information Institute (N.D.) “Class Action: An Overview” https://www.law.cornell.edu/wex/class_action
  2. Law Information Institute (N.D.) “Rule 23: Class Actions” https://www.law.cornell.edu/rules/frcp/rule_23
  3. Law Information Institute (N.D.) “28 U.S. Code § 1332 – Diversity of citizenship; amount in controversy; costs” https://www.law.cornell.edu/wex/class_action
Last Modified: June 2, 2016

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