What is a class action?
A class action lawsuit is a procedural device employed by the court systems which allows a lawsuit filed by an individual or individuals to resolve similar or identical claims on behalf of many and frequently millions of similarly situated people or entities. A class action allows an individual or a few people to change corporate practices and to bring wrongs to the attention of the court on more than a piecemeal basis. They often result in a defendant changing its conduct or way of doing business to eliminate the practices that lead to the class action. Through this mechanism society benefits in ways that are hard to quantify over and above any monetary benefit to the members of the class or disgorgement of ill gotten gains from the pocket of the wrongdoer.
Most state courts and the federal courts allow a case to proceed as a class action when certain criteria are met.
These criteria vary by state and jurisdiction, but generally consist of the following:
- Numerosity - This means that the conduct affects a substantial group of people. In some cases, especially civil rights and employment cases the number of people may be as low as about 20-40. Normally, courts require hundreds or thousands of similarly affected parties.
- Common Questions - For a case to be certified as a class action there must be a substantial similarity between the plaintiff’s claim and the other class member’s claims. This may be either similar factual settings or similar legal questions. For example, where a great number of people sign a form contract or a manufacturer sells a product which has a common design defect or when a party misrepresents a product in its advertising there are common questions of fact and law even though the transactions occurred at different times. The courts look to the ability to adjudicate a number of common claims in one action. It is important to note that not every single fact or law need be the same. It is sufficient if the common elements predominate.
- Adequacy of Representation - This means that the plaintiff’s claim is similar to those of the others and that he/she is willing to proceed with the case. The plaintiff may be required to be deposed and will have to testify if the case goes to trial. Additionally the plaintiff should not have other motives (such as a separate personal claim against the same defendant) which drive the desire to sue. The plaintiff also must employ counsel whom the court finds are adequate and experienced to litigate the claim on behalf of, not only the plaintiff, but the entire class.
- Superiority - This requires that the class procedure is a fair or superior method to handle the claims at issue. In consumer cases this often means that the claims are relatively small, a few dollars to a few hundred dollars. The larger the stake, the more likely an individual case would be filed. Class actions provide their greatest benefit when the amount of money at issue is small because it is unlikely that any individual would spend a lot of money to get back only a few dollars. Yet, it would be unfair to allow a wrongdoer to keep a few dollars from thousands or millions of people.
When a court certifies a case as a class action the action is transformed from an individual case to one which may resolve the claims of all persons or entities who are similarly affected by the complained of conduct. The result may be favorable or unfavorable to the claimant(s). The attorneys and named plaintiffs representing the plaintiff class assume special responsibilities to protect the interests of the absent class members.