In this hypothetical example of a class action case, you're one of 8,000 plaintiffs from around the country. The class action is against a manufacturer whose advertising promoted a new shampoo called "Aloe Magic." Its advertising stated the shampoo contained 20 percent aloe vera when it actually only contained 5 percent. The ads also emphasized the product's many health benefits due primarily to the non-existent aloe vera.
You found out about the class actions when you saw an article on the internet urging anyone who purchased Aloe Magic in the last five years to contact the Caliseri Law Firm in New York City. The article said you might be entitled to money based on the manufacturer's false advertising. You contacted the law firm, and after producing a receipt for the product, were invited to opt-in to the class action lawsuit.
Although the class includes 8,000 plaintiffs from around the country, they're not all separately named in the lawsuit. Instead, Mary and John Peters are named as the plaintiffs representing the class. Their names will be the only ones found on all the legal pleadings. The Peters are two real people who claim they were duped by the defendant Magic Manufacturing Corporation. They will testify in court on your behalf, and on the behalf of the other 7,997 plaintiffs.
Your input into the case and access to the attorneys is very limited. Many law firms specializing in class action lawsuits set up toll-free telephone numbers for plaintiffs to call and receive status reports on the lawsuit's progress. The law firms also mail notices to all plaintiffs about upcoming hearings and pleadings they've filed.
Plaintiffs rarely get to speak with the attorneys - there are just too many plaintiffs and too few attorneys. The only plaintiffs who get to speak with the attorneys are the ones actually named in the lawsuit. They will be representing your interests and those of the other class members. They'll also be the ones testifying on your behalf at depositions and at trial.
A class action usually is styled to show who is suing whom. The style of the case usually appears on the first page of the lawsuit, also called the petition. In this case it identifies Mary and John Peters as the plaintiffs in the class action representing other "similarly situated persons." Those similarly situated persons are you and the other 7,997 plaintiffs.
Can you imagine if all 8,000 plaintiffs' names had to be on the petition? Or if all 8,000 plaintiffs had to come to court to testify? It's a practical impossibility.
Example of Class Action Style (Petition)
Cause No. C2786-12
Mary and John Peters
The Magic Manufacturing Corporation
To become a legitimate class action, the court must certify the class as a legitimate group of people who have been similarly affected by the defendant's actions. This certification is mandatory and a class action can't proceed without it.
In this case, to have 8,000 plaintiffs certified as a class, the attorneys had to present enough proof to the court to persuade it those 8,000 people were affected by the same defendant's actions. They did so with independent lab results and by subpoenaing records to show how the Magic Manufacturing Corporation misled its consumers with false advertising.
The class action lawsuit was filed after Mary and John Peters consulted with the Caliseri Law Firm in New York City. Mr. and Mrs. Peters told the attorneys they were convinced that Aloe Magic shampoo didn't have 20 percent of aloe vera in it. Mr. Peters worked for a private consumer protection watch group, and the consumer group had received numerous complaints about the effectiveness of the Aloe Magic shampoo manufactured by the Magic Manufacturing Corporation.
Mr. Peters' company tested the shampoo and found the shampoo did not contain 20 percent aloe vera as the Magic Manufacturing Corporation advertised it did, but instead only had five percent. The attorneys sent a bottle of the shampoo to another independent laboratory, and it verified the five percent level of aloe vera.
After doing a substantial amount of research, the attorneys were able to assemble proof the Magic Manufacturing Corporation sold at least 8,000 bottles of this type of Aloe Magic shampoo to consumers over the last five years. The consumers all believed the shampoo contained 20 percent aloe vera.
The class action alleges the plaintiffs paid for a product which didn't exist in the form it was advertised. The suit went on to claim if the plaintiffs knew the advertising was false, they would never have purchased the product. The only reasons the plaintiffs purchased it was because they believed the 20 percent aloe vera content would be healthier for their scalp. Advertising for the product claimed that amount of aloe was beneficial to the scalp.
At the time the class action lawsuit was filed, a bottle of Aloe Magic shampoo cost $10.00. Prior to manufacturing the present shampoo, the defendant manufactured a similar product. It sold for $8.00 and was advertised as having 5 percent aloe vera.
The lawsuit contended the defendant never changed the product or its aloe vera content. Instead it just relabeled the old product containing 5 percent aloe vera with a new label stating it was the "new and improved" Aloe Magic shampoo containing 20 percent aloe vera.
After six years of arguing legal motions and pre-trial discovery, the case finally went to trial. At the completion of the class action, the jury decided the defendant was culpable (guilty) of false advertising.
Their verdict ordered the defendant Magic Manufacturing Company to pay the amount of $10.00 back to every plaintiff. The jury also awarded punitive damages against the defendant in the amount of $500 per plaintiff. The verdict broke down as $510 per plaintiff multiplied by 8,000 plaintiffs. The total verdict was $4,080,000.
As one of the plaintiffs, you expected to receive a check for $510 dollars. You didn't because of the contingency fee agreement with the attorneys who represented the plaintiffs in the case. The attorneys had to be paid for the six years of work they put into the case. During that time, they weren't paid any money for the work they were doing. They knew if they lost the case, all their work would have been wasted. Fortunately, they won.
In class actions, the attorney's fees must be approved by the judge hearing the case. In addition to their legal fees, the attorneys have a right to be reimbursed for the costs they incurred during the six years they worked on the case. In class actions those costs can include hundreds of depositions, thousands of copies of pleadings, postage, and more.
In this case, the total amount of attorney's fees and costs comes to $3,000,000, leaving $1,080,000 to be divided among 8,000 plaintiffs. As a result you would receive a check for $135. That's not a lot, but it's a good return on the $10.00 you spent on the bottle of shampoo.
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