Class Action Lawsuit Information
 

OVERVIEW

Class action lawsuits are lawsuits in which one or two people, called lead plaintiffs, sue on behalf of a much larger group of people called class members. They happen when the courts see that many people are filing similar lawsuits against the same defendant. If a judge believes that there are many people with the same problem, and all are pursuing basically the same case, he or she can choose to consolidate them into a class action.

This benefits the court by lightening its workload, but it also benefits the class members by combining their efforts. In many cases, this allows people who suffered a relatively small loss to pursue a lawsuit, even though the claim wouldn’t be worth pursuing on its own. A few lawyers can represent all of the class members, allowing them to collect enough legal fees to make the case worth their time. These are class action lawyers.

 

“WHAT TYPES OF LAWSUITS CAN BECOME A CLASS ACTION LAWSUIT?”

Any lawsuit could be a class action, if there are enough people who have similar complaints who are willing to join the class. However, some types of disputes naturally tend to become class actions, because they affect many people at the same time. These can include:

Lawsuits over defective consumer products, such as dangerous toys and tainted food.
Unsafe prescription drug lawsuits.
Consumer lawsuits against a service provider with illegal billing practices.
Employment lawsuits against large employers who have allegedly violated labor laws.
Securities lawsuits, in which investors allege that someone mishandled their money and caused them to lose value in their investment.
Lawsuits against an insurance company that consistently denies valid claims, misrepresents its coverage or doesn’t pay claims on time.


 

“COULD I BE PART OF A CLASS ACTION AND NOT KNOW ABOUT IT?”

Most adults are part of a class at some point in their lives, although few end up as lead plaintiffs. Usually, you’ll get a notice in the mail or in other ways letting you know you’re in the class and what to do about it. You may also be contacted directly in other ways, such as a note included with your paycheck.

But if you hear about a class action that you think applies to you, and you don’t get the notice, there are a few things you can do. If you know the name of the class action lawyer handling the case, you can contact him or her directly. Ask the class action lawyer to put your name in the class registry. You may have to give the lawyer some information showing that you’re part of the class. If you don’t know the name of the class action lawyer in your case, you can also check online. Usually, lawyers will put up Web pages about their class action cases for exactly this reason. In federal cases, the court will often put up a Web page explaining the case as well.

 

 

“HOW DO I JOIN A CLASS ACTION LAWSUIT?”

Most people are surprised to find out for the first time that they’re part of a class action by opening a piece of mail. In addition to describing the lawsuit and the proposed settlement, this piece of mail should give you the chance to join or not join the lawsuit. If you choose to join, you will usually have to do nothing at all, because class membership is usually automatic. Sometimes, you’ll have to fill out a short form and mail it back. Then, all you have to do is wait for a check to arrive in the mail. If you do not wish to join a class action lawsuit, you can fill out a form that lets you “opt out” instead. Then, you’re free to pursue an individual claim or do nothing at all.

The amount you stand to win in a class action lawsuit varies, but will generally be under $1,000. That’s because class actions excel at helping individuals who have lost a relatively small amount of money. For example, let’s say you work for a large, multi-state employer that consistently doesn’t pay overtime to people who are legally entitled to it. The unpaid overtime may add up to $200 or so over the course of a year, making it too small to be worth pursuing in court. But if there are lots of employees like you, they can get together and file a class action that forces the employer to pay the overtime. The larger fees generated by the larger lawsuit will enable class action lawyers to take the case.

 

“CAN I FILE MY OWN CLASS ACTION LAWSUIT?”

Yes and no. No lawsuit starts out as a class action, because the judge must agree that it should be a class-action matter. Class action lawyers must file a proposed class action at first. Then, in order to get the judge to agree that it should be a class action, they must show that:

There are so many people with the same complaint that it’s impractical not to combine them.
They all are seeking to decide the same legal questions.
The lead plaintiffs’ complaints are typical for the members of the proposed class. That doesn’t necessarily mean they have to have the same complaint as everyone else, but they shouldn’t be far from average.
The lead plaintiffs must be able to fairly represent everyone in the class, not just their own interests.

Those are the steps if you want to file a new class action. There are advantages to being a lead plaintiff; you may be able to get more money, and you will certainly have a little more control over the lawsuit.

It’s not usually possible to start a class action that competes with an existing one, unless there are substantial differences between the legal questions or facts of the cases.

 

“WHAT IF I DON’T AGREE WITH SOMETHING ABOUT THE LAWSUIT?”

There are a few things you can do, depending on the situation. If you get a notice saying you’re part of a class action lawsuit, but you don’t want to be part of the lawsuit or disagree with the settlement, you can opt out. You do this by filling out a form and mailing it in. If you want to pursue your own claim after that, you’ll have to hire your own lawyer and sue as an individual. This is best when you have a strong case and the money you could gain from an individual lawsuit is much higher than the money you stand to gain from the class action.

If you have already opted in, or done nothing, and later realize that you don’t like the case, you may not have any recourse. Unless you were misled by the class action notice, joining the lawsuit amounts to agreeing to be bound by its terms.

If you feel that a proposed settlement is unfair to you and other class members, you may be able to rely on the judge in the case. Judges must approve any settlement that the class lawyers and the defendants reach. If the judge feels that the settlement isn’t fair, he or she can reject it. This might happen if:
 

  • The settlement doesn’t compensate the class members well enough for their losses.
  • The lawsuit was filed for money, but the settlement includes only non-monetary benefits like repairs or inspections.
  • The defendants are asking to be released from liability for claims not covered by the lawsuit. That is, if you sue claiming that your employer did not pay overtime, the employer can’t ask to be protected from claims for sexual harassment as well as overtime claims.
  • The lawyers didn’t do enough work to know whether the settlement is fair.
  • The class action lawyer didn’t tell class members how much he or she is getting in fees.
  • The class action lawyer’s fees are excessive.

     

PAYMENT

Class action lawyers are usually paid out of the winnings of the lawsuit, called a “common fund.” This is similar to a contingency fee that you might see an individual personal injury case, because earning the fee is contingent on winning the case. However, unlike with most individual contingency cases, class-action lawyers’ fees are generally subject to review by the court, which acts as a watchdog on behalf of absent class members.

In certain cases, the lead plaintiff, who hired the class action lawyer, will pay him or her. This might happen if the case is dismissed early in the process, for example. But most class members will never be asked to pay a class action lawyer.