Class Action Lawsuit and Settlement Information



A class action lawsuit is generally referred to as a class action. It is a civil lawsuit, not a criminal case. A class action is when a single lawsuit is filed by hundreds or even thousands of people against a large corporation.

Although class actions can also be filed against the government for civil rights violations, the bulk of class actions are against large corporations. In a class action suit, the people come together as one set of plaintiffs to allege they were all harmed in generally the same manner by the same corporation.

Class actions date back to at least the mid-1800s. They were initially created by the federal government as a solution to the problem of multi-million dollar corporations getting away with harming large groups of people. Most people couldn't afford to individually sue a corporation if they were harmed by it. They simply didn't have sufficient financial resources to take on a corporation in court.

The modern class action was created by Congress in 1966 and is governed by the Federal Rules of Civil Procedure Rule 23 and 28 U.S.C.A. - Section 1332.

Class action lawsuits are necessary because it would be impractical to have every plaintiff file his or her own separate lawsuit against the same defendant. Can you imagine a thousand people filing a thousand separate lawsuits at one time against the same defendant in one court? The court system simply couldn't handle such a caseload. That's why class actions were created.

The most common class actions are those involving defective products and false advertising. A good example of a defective product class action is one filed against a pharmaceutical company whose drug produced serious side effects on its consumers. Another example is against an automobile manufacturer whose faulty designs resulted in unnecessary injuries and wrongful death to passengers.

An example of a false advertising class action is one where a manufacturer induced people to purchase their product by making false claims about the product's benefits. Other class actions have been filed against manufacturers that produced hazardous chemicals such as asbestos and agent orange. Class actions have also been filed against state and federal government for civil rights violations and harassment in the workplace.

Advantages of Class Actions

  • You don't have to go out and find an attorney who will take your case.

  • No matter how little you were harmed you get to be a member of the same lawsuit.

  • You don't have to pay any legal fees or the costs of preparing the case in advance.

  • Unless you are a named plaintiff, you won't have to take time off from work to participate in pre-trial discovery like depositions, interrogatories, etc.

  • You won't have to testify.

  • You get to join forces against a big corporation you couldn't otherwise go after by yourself.

  • You receive a proportionate share of the settlement or jury verdict.

Disadvantages of Class Actions

  • You give up your right to sue the defendant individually.

  • You have no input into how your case is handled.

  • Although you are an equal member of the class, you won't participate in the trial itself.

  • You probably won't have any access to the attorneys representing the class.

  • You are bound by the jury's decision or the final settlement amount.

  • You give up your individual right to appeal the case if the attorney loses.

Becoming a Class Member

Attorneys who represent plaintiffs in class action lawsuits normally place invitations to join a class action in the newspapers, on the Internet, and in other media. Here is a hypothetical example of a class action invitation:

Class Action Lawsuit Against Magic Corporation
Invitation for Participation

You may be a member of a class of individuals who purchased the product called 'Aloe Magic.' The product was sold by the Magic Corporation in your area during the years 2007 - 2012. Magic Corporation is alleged to have misrepresented the content of the product and thereby induced consumers to purchase the product. If you purchased this product during 2007 - 2012, you may be entitled to a cash payment.

If you want to opt-in to the class of individuals named in Class Action No C2876-12 in Federal Court, styled Mary and John Peters as Plaintiffs against the Magic Corporation, call this toll free number (555) 555-2599. If you don't want to be a member of the Class, you can opt-out by signing the form saying you don't want to be a member of the Class and mailing it back to us.

Class Action Attorney Fees

You don't have to pay to become a member of a class action suit. Because the attorneys representing the class do so on a special type of contingency fee basis, none of the plaintiffs will have to pay any legal fees until and unless the attorneys win the case. Class actions are courtroom battles. Because jury verdicts can sometimes reach into the millions of dollars, class actions are vigorously defended. They consume tremendous time and financial resources of both sides.

One of the major benefits of becoming a class member is the high quality of legal services you'll be provided. Plaintiffs' attorneys in class actions are normally experienced and well financed. The stakes are high. To be a worthy adversary, plaintiff's attorneys must be experienced and highly qualified.

Hiring Your Own Lawyer

You don't have to join a class action. Retaining your own attorney might be prudent if you suffered substantially greater harm than the average class member. If you're not sure, contact an attorney. Most won't charge for an initial office consultation. The attorney can contact the attorneys in the class action lawsuit and find out what the average class member's harm or damages are.

Don't try contacting the class action's attorneys yourself. The chance of one of the attorneys discussing the finer points of the case with you is remote at best. They just don't have the time. Rather, let the attorney you consult with speak for you.

If she believes your case is substantial enough to be tried separately, she'll tell you. Then she'll take over the case and begin representing you on a contingency fee basis. You won't have to pay any fees or costs in advance. If the attorney loses the case you'll owe nothing. If she wins, you both get paid.

Case Study:

Pyramid Scheme and Criminal Fraud
In this class action claim, 30 plaintiffs are seeking damages from the defendant for defrauding them in what they allege was a pyramid scheme.

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