Class Action Lawsuits
Although there are a vast number of reasons for class action lawsuits being filed, there are generally two similarities between them all. The first similarity is that every person who is involved has the same or similar issue because of the situation, and the second similarity is that there are so many people involved that it would be ludicrous to bring each individual into their own separate lawsuit.
Purpose of Class Action Lawsuits
Class action lawsuits are used to group together all of the injured parties so that it is more efficient for the courts to deal with. One plaintiff will take the lead role, and all others will be able to take a backseat while the verdict is determined. Another reason these can be useful is that many times the defendant is a large corporation that is able to efficiently fight off a single lawsuit. However, if the problem with their good or service is widespread, then grouping all of these people together not only creates strength in numbers but proves that there is an issue with what was provided by the defendant. This is important, as the number of plaintiffs can grow throughout the process. It can be tough for every person injured to be informed from the start so those who find out about the class action suit late can apply to have opted in if their case meets the requirements. This way the court is able to get a better idea of just how many people are negatively affected.
Types of Class Action Lawsuits
There are many different situations in which a class action lawsuit would be acceptable. Some examples could be, but are not limited to:
- Illegal or insensitive recording of conversation or action
- Employees being discriminated against by race, sexual orientation, gender, and more
- Investors losing money because of fraud committed by a publicly-traded company
- Environmental disasters affecting small owners such as an oil spill
- Fixed price scandals
- Defective product cases in large numbers
- Prescription drug injury cases in large numbers
Class-Action Lawsuit Benefits
Each plaintiff can file their own individual case, but what if the case involves more than one victim? In this case, it would make the most sense to join them all into one class-action lawsuit because it works better for the defendants, the plaintiffs, and the court.
- Class Actions Work Better for the Plaintiffs
Class actions only involve one set of witnesses, experts, documents, and issues, which makes it more efficient, less expensive, and easier for a single law firm to take one case rather than having several law firms attempt to take on multiple cases.
There often isn’t enough in damages to justify the expense and time to handle each individual case. A class-action suit offers victims a fair distribution of the damages whereas, with multiple lawsuits, only a couple of plaintiffs who win may get all of the assets or insurance proceeds from the defendant, which leaves little to no money for anyone else who wins their cases later.
- Class Actions Work Better for the Courts
It’s more expensive to file multiple lawsuits than it is to file just one. With one lawsuit, there is only one courtroom and one judge, and it also means that court schedules won’t be clogged up with multiple cases.
- Class Actions Keep the Playing Field Level
Financially, defendant corporations are better suited to defend one claim, but when claimants use The Eichholz Law Firm to file a class-action lawsuit, it becomes a fair dispute. If defendant corporations have to defend more than one claim, not only are they more likely to settle the class-action suit, but its misconduct will likely also change as well.
Class-Action Lawsuits: Steps to Take
- Hire an experienced law firm.
If a claimant has suffered damages or injuries that others have also sustained, they need to hire a class-action law firm with years of experience – preferably one with a successful track record and the resources to be able to advocate on behalf of thousands, or possibly millions, of plaintiffs.
- File a lawsuit.
Class-action lawsuits typically start by filing an initial complaint that names one class representative. That representative will file the suit on behalf of the entire class. The defendant has the right to respond to the lawsuit if they choose to do so. They may object that the requirements for a class-action lawsuit haven’t been met, or that it would be better if the lawsuits were handled individually.
- Obtain class certification from the court.
After a complaint has been filed, the class representative will ask the court to approve or certify the proposed class.
- Issue a notice to members of the class-action suit.
Most of the time, when a lawsuit becomes certified as a class-action case, a notice must be sent to the individuals who are part of the class. The notice will be sent through the media and the internet, as well as by direct mail to known plaintiffs.
- Give victims the option to opt-in or opt-out.
While memberships in a class-action lawsuit are automatic, victims have the right to either opt-in or opt-out of the suit. The right to opt-out should be in writing in the notices. Injured victims can sometimes opt-out of a lawsuit, but not always. Sometimes, victims are limited to opting out of a settlement. Injured victims who have sustained different injuries from other class members, want more control over the lawsuit or lost more money than other victims might want to opt-out of the class-action suit.
- Negotiate a settlement or try the case.
Once the notice period is complete and the class is certified, the lead litigant will continue with his or her case against the defendant(s). Unless a settlement is reached, a decision will then be made by a jury or a judge, or an appeal will be decided.
If a settlement or verdict is reached, all of the class members will be notified. Injured victims will be informed that they will be able to opt-out of the settlement if they file their notice in a proper, timely manner. After the settlements have been paid out and the opt-out period has expired, the lead litigant and the lead litigant’s counsel will arrange payments for all eligible victims.
- Pay and dispense the damages.
The law firm that represents the plaintiff typically gets a percentage of the agreed upon settlement first. The lead litigant gets paid next and receives a higher share than the other class members because of the additional work they put in to handle the class-action case. Finally, the class members get paid. The presiding judge over the case approves the settlements.
Lead Plaintiff/Class Representative Responsibilities
The lead plaintiff, or class representative, is the leader as well as the voice of the group. They are appointed by the court and play a more active role than the other members of the case. The rest of the class members will wait to see what the outcome of the case is.
Because the named party in the claim is the class representative, they have important responsibilities including:
- Hiring a lawyer
- Consulting with the lawyer throughout the entire legal process
- Representing the class fairly
- Serving as the face of the class-action lawsuit
- Deciding whether to take a settlement
The class representative, in return, is the only class member who may receive additional compensation after the trial concludes. The additional compensation he or she receives is determined by the court.
Opting In or Out of a Class Action Suit
If you receive a notification in the mail regarding a class-action case that applies to you, you need to decide whether you want to participate in the case or not. You are not required to opt-in in most cases. Instead, you will receive a letter or an e-mail notification regarding the class-action lawsuit and you will be included in the class automatically. No additional action is required from you except in rare circumstances. If you decide to be included in the class-action lawsuit, you agree to waive your right to file an individual case against the defendant and you will receive any compensation that’s awarded to you.
You may, however, choose to opt-out of a class-action lawsuit. If the class wins the case, you will not receive compensation, but you will be able to file your own charges against the defendant. If you think that the injuries you sustained are significantly worse than the rest of the class, you may be better off opting out so you can pursue these damages individually.
Class-action lawsuits must be “certified” in order for them to proceed in a court of law. The certification procedure has slight differences between different states’ rules and the federal system, but most states follow the guidelines outlined in the Federal Rules of Civil Procedure (FRCP) which state:
- If there are numerous potential plaintiffs, it is unrealistic to include them all in one lawsuit.
- Common questions of fact or law must be apparent across all cases (they are based on the same wrongdoing or problem).
- The named claimants, or class representatives, have the same claims as all of the other class members, and any defenses to them would either be the same or comparable.
- Each class representative will protect the class adequately and fairly. The law firm that’s representing the class will be placed under a microscope, especially with regard to how the attorneys will be paid.
Claimants who were affected by the defendant’s actions likely only suffered minor damage to their finances and they are often unaware of what happened. This is why a Notice of Class-Action is always mailed out to anyone who may have been impacted by the suit.
The notice identifies you as being part of the class of individuals who are involved in the lawsuit. You will also be bound by the resolution, no matter what it might be.
The Contents of a Class-Action Lawsuit
After the lawsuit has been filed, the court and the parties will attempt to identify anyone who is eligible to be included in the “class,” and will notify each class member about the case.
The specifics of the notice will depend on where the case is being filed. Procedural guidelines for class-action suits and settlements differ slightly among different states and the federal government. Most state procedural rules largely represent what is laid out in the federal procedural rules. In the context of the Federal Rules of Civil Procedure, we will discuss the “notice of class-action.”
For most types of class-action suits, Federal Rule of Civil Procedure 23 states that the court must guarantee that members of the class receive an effective, practicable notice, including notices to members who can easily be identified.
FRCP 23 also says that the notice must be stated concisely and clearly in language that is easy to understand, including key information such as the specific claims against the defendant, the nature of the case, the right to opt-out of the class-action suit, and the obligatory effect that any judgment or settlement might have on each individual class member.
Class Action Verdicts
Although grouping cases together can be beneficial for both parties, it can also be detrimental. This is because every person that is included in the lawsuit is bound by the final decision of the court, regardless of the specific situation and any small differences between each individual case. Another negative aspect is that the final settlement is split between each individual party in the case, and a system is used to determine the percentage of the settlement that each person will receive based on their individual case. This could potentially mean that the person will receive less out of the settlement than if they were to file their lawsuit individually. However, each class action lawsuit will be different in its own way and this is by no means guaranteed.
Class action lawsuits are complicated and can take a long time to reach a verdict, however, they can be largely beneficial to the courts and the plaintiffs involved. Many people do not understand the intricacies of class action lawsuits, and may not even know if they qualify to opt into one that is already ongoing.
Contact Our Law Firm
If you believe that you have a case that may qualify as a class action lawsuit, contacting our team at The Eichholz Law Firm would be a good next step. We understand all parts of a class action lawsuit and can advise you on what to do next.
Contact us today or fill out our online application for a case evaluation.
Please seek the advice of a medical professional before making health care decisions.
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Our objective is to provide expert legal services in an effort to maximize results for clients who have been injured through the negligence of others.