On a very general level, class action lawsuits involve a large group of people in some capacity: A collective class, even bound together over the issue of a defective product, suing a defendant, or a group of defendants, multiple negligent companies, for instance, being sued by an individual. While more class action lawsuits are filed on behalf of product liability claims, other types of cases end up in court, too, including groups of shareholders suing for corporate fraud, employees for discrimination, and residents over environmental disasters.
With a case, which may be filed in either federal or state court, class action has its benefits. Because fewer witnesses overlap, the trial process moves along more efficiently, while the cost of litigation tends to be lower than for individual plaintiffs filing alone.
On the other hand, these types of cases tend to have drawbacks. Before the lawsuit even moves forward, the collective group must be defined as a class. Federal courts, as well, may dismiss class action lawsuits if the defendants are state governments or officials or if the plaintiffs number less than 100 individuals.
Using Rule 23 of Federal Rules of Civil Procedures, cases follow the same set of initial steps:
• Certification: Before a lawsuit can begin, the plaintiffs must be verified as a class. This factor may simply be determining if filing individual lawsuits is not practical, if they all have a common complaint, or if all experienced the same injury or condition. At this stage, the defendant has the option to object if the collective plaintiffs may be grouped together as a class.
• Defining: The “class” is officially determined at this stage, with the judge notifying all plaintiffs by mail after.
• Opting Out: If individual plaintiffs don’t want to proceed with the lawsuit, they have, at this point before a case goes to trial, an opportunity to leave the collective class. From here, an individual plaintiff has the option of filing a lawsuit separately.
• Determining Counsel: A judge, then, selects the single individual to represent the entire class of plaintiffs. Often, this is the class action lawyer representing all who filed.
• Distribution: A factor of all class action lawsuits, the compensation – either from a settlement or taking the trial to court – is divided by all plaintiffs. Before a case goes to court, the judge and plaintiff’s attorney determine the division and distribution and how much the attorney will be paid.