Published in Class Actions on June 6, 2017
How many of you have received a letter or email telling you that you are eligible to receive compensation because you purchased some product or service, but you have no idea how the postcard made its way to your mailbox? The answer is that the letter or email is generally the result of a class-action lawsuit filed somewhere in the United States. While most people have heard about class action lawsuits, there is little understanding about them. This is the first in a series of posts explaining what class actions are, why they exist, and the benefits of class action suits.
Class action suits can be filed in federal or state court and are similar to other civil lawsuits in that an individual or group of people brings claims for payment against a defendant or group of defendants. The difference is that in a class action suit, one plaintiff (or a group of plaintiffs) represents a much larger group of individuals who are not specifically named in the lawsuit. For example, if Apple sells 500,000 iPhones that have defective screens, any of the iPhone buyers could sue Apple in a class action on behalf of everyone who bought that same iPhone.
However, just because the hypothetical iPhone buyer wants to bring a class action against Apple, that does not mean that the case will move forward as a class action. To be certified as a class action, there must be enough people in the proposed class, there must be factual or legal issues that are common among the proposed class members, the class members must have similar claims (which generally means that they must have suffered similar injuries), and those representing the class must have common interests with the class and will vigorously protect those interests. Courts have to certify the case as a class action before any settlement or verdict can be reached on behalf of the proposed class. This requires the filing of a motion by the attorney representing the plaintiffs and are almost always opposed by the defendant(s).
In most cases, members of the class who receive payments under a settlement or judgment do not even know that they are members of the class until after a settlement has been reached or a judgment has been entered. The laws governing class actions require notice to the members of the class. The defendants who settle the case or against whom judgment is entered usually pays for the expense of notifying the class members of the benefits available to the class. Notice can take a variety of forms including direct mailings, web advertisements, webpage pop-ups, point of sale notices, and social media.
Class action suits have been important tools for consumers to protect themselves and for individuals to protect their civil rights. Some of the most famous class actions in history include In re Exxon Valdez Oil Spill Litigation (filed on behalf of those who suffered damages in connection with the Exxon Valdez oil spill), Dukes v. Walmart ( filed on behalf of all female Walmart employees alleging sexual discrimination), and the tobacco litigation, which was filed by each state against the top six tobacco companies. Each of these cases has provided (or in the case of Dukes may provide) compensation to individuals who were harmed by a corporation’s wrongful conduct.
In the next post about class actions, we will discuss why this type of suit exists.