What Is a Class Action Lawsuit? How They Work and How You Can Benefit

Learn why personal injury class actions can be the best, and sometimes the only way to make negligent corporations pay fair compensation to their victims.

Class actions are civil lawsuits that help stop corporations from harming large groups of people through unfair business practices or defective products.

Although class actions can be filed against the government for civil rights violations, most class actions are against large corporations.

In a class action lawsuit, people come together as one set of plaintiffs to allege they were all harmed in the same way by the same corporation.

Personal injury class action lawsuits are a powerful and effective weapon against corporate greed and negligence. Claims made by injury victims may be resolved through three different types of class actions: a standard class action lawsuit, mass tort litigation, or multidistrict litigation.

What is a Class Action Lawsuit?

A standard class action is one lawsuit filed on behalf of a group of people who all suffered the same or similar damages caused by the same at-fault party, usually a corporation.

Often an individual victim’s damages would not be enough to justify the cost of litigation. But in a class action, hundreds or thousands of individual claims get pooled together. Each person is a “member” of the class, and they’re all represented by the same attorney, usually a well-established law firm.

When a class action lawsuit is filed, one or two members of the class are named in the lawsuit, known as “representative plaintiff(s),” and the other class members are referred to as “those similarly situated.

Federal Class Action Rule 23

Congress established the modern class action litigation standards in 1966 with changes to the Federal Rules of Civil Procedure that establish when a class action is appropriate.

A class action is appropriate when:

  1. There are too many class members for individual lawsuits to be practical
  2. Every member of the class has the same issues in common
  3. The class members have the same legal claims
  4. The representatives will be able to look out for the interests of the entire class

Advantages of Class Actions

  • You don’t have to go out and find an attorney to take your case.
  • No matter how little you were harmed you get to be a part of the 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 participate in depositions, interrogatories, and other legal procedures.
  • 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.
  • You probably won’t have direct access to the attorneys representing the class.
  • You are bound by the jury’s decision or the final settlement amount.
  • You give up your right to appeal the case if the attorney loses.

Case Example: Class Action Settles for $333 Million

In this class action injury lawsuit, PG&E, the local utility company, was sued on behalf of 650 residents in Hinkley, California. The lawsuit accused PG&E of allowing toxic waste to contaminate the area water table, resulting in multiple types of cancer and other illnesses.

The lawsuit also alleged that PG&E knew the groundwater was being poisoned and failed to do anything about it for several years.

In July 1996, PG&E settled the lawsuit for $333 million, one of the highest personal injury class action settlements at that time. The company also agreed to take steps to clean up the area.

The hard-fought legal battle against the big utility company inspired the movie “Erin Brockovich.”

How to Be Part of a Personal Injury Class Action

You can be part of a class action lawsuit as a class representative or as a class member. A victim class may be statewide, meaning all the class members are or were residents of the same state, or nationwide, meaning the claimants can be from anywhere in the United States.

Becoming a Class Representative

Class actions typically begin with one or two injury victims who seek legal advice from a personal injury lawyer. When the attorney recognizes that the at-fault party probably caused the same types of damages to other victims, a class action lawsuit is filed on behalf of the injury victim and others “similarly situated,” meaning they suffered injuries caused by the same at-fault party.

The named victim is the “lead plaintiff” and the at-fault party is the defendant.

The proposed class will be “certified” by the judge when the victim’s attorneys prove the group of injured victims meet the legal standards for a class action, such as commonality and numerosity.

Class actions filed in Federal Court are certified according to the standards set forth in the Federal Rules of Civil Procedure. Class actions filed in state court must abide by the state class action laws.

After class certification, the case will proceed to a jury trial unless the parties reach a settlement agreement before the jury reaches a verdict.

Unlike other class members, class representatives must actively participate in the litigation process by attending court hearings, providing testimony, and sharing their medical records. Because of their participation, class representatives often receive a special monetary award in addition to their share of the class settlement.

Case Example: Service Awards for Class Representatives 

Dr. Steven R. Matulis, a gastroenterologist practicing at the Charleston Area Medical Center (CAMC) is accused of sexually abusing female patients while under anesthesia. Both A.H. (name abbreviated for privacy) and Adriana Fleming filed lawsuits against Dr. Matulis and CAMC on behalf of themselves and others similarly situated.

The class action was settled for the amount of $23.1 million. Because of the time and participation of class representatives A.H. and Adriana Fleming, Class Counsel asked the court to approve a $42,000 service award to each of the representatives.

Joining an Existing Class Action

You will receive a notice of eligibility for class membership if the attorneys have been able to identify potential members through the discovery process. During discovery, attorneys for the class ask the party being sued to hand over internal records and files to help identify class members.

Potential class members may also be notified through “publication,” meaning the class action is advertised on television, in newspapers and magazines, and on other media platforms available to the public. For example, ads about exposure to asbestos, talcum powders, medications like Zantac, and other class action notices have been published in recent years.

See a list of open class action lawsuits here.

If you think you might qualify, call the number provided or fill out a claim form online.

Class Action Attorney Fees

One of the major benefits of joining a personal injury class action or mass tort case is the high quality of legal services you’ll be provided.

Law firms that specialize in class action cases are usually experienced and well-financed. The stakes are high, so class action trial attorneys must be very capable and highly qualified.

Class actions are legal battles that often take years to resolve. Because jury verdicts can reach into the millions of dollars, class actions are vigorously defended by corporations. Class action attorneys invest a lot of time and money to prove the corporation was negligent.

Attorneys hired by a personal injury class work on a special type of contingency fee basis, where the attorney’s fees and costs are approved by the court. Class members never have to pay any fees or costs upfront.

What is Mass Tort Injury Litigation?

“Tort” means a wrongful act that harms another. Mass tort claims typically involve a large number of consumers with similar claims who are injured on a large scale (mass) by a dangerous drug or defective product. Victims have different types of injuries, so they have individual lawsuits.

The large group of individual lawsuits is represented by the same attorney or group of attorneys. The victims benefit by sharing the extensive research and evidence gathered by their attorney.

Case Example: Xarelto Lawsuits Settled for $775 Million

More than 25,000 Xarelto lawsuits were settled by drug companies Bayer and Johnson & Johnson with expected payments totaling $775 million. Xarelto is a blood-thinning medication marketed to help prevent blood clots.

Thousands of injury victims allege the drug caused uncontrollable and sometimes fatal bleeding, and the drug companies failed to warn patients and doctors of the bleeding risks.

The settlement cost will be split between the two companies, with some of the cost paid by liability insurance.

What is Multidistrict Litigation (MDL)?

Personal injury lawsuits are typically filed in the home district of the injury victim, or in the district where the injury occurred. Multidistrict litigation is when individual cases from different federal courts with a common element are transferred to the same Federal District Court to be handled by the same Judge.

Personal injury MDL cases can come from plane crashes, faulty medical devices, dangerous drugs, and other product liability claims. MDL cases differ from a class action suit because victims have their own attorneys and may have different types of injury claims.

Attorneys for injury victims in MDL cases often cooperate to share research and discovery efforts, for the benefit of all their clients.

Case Example: Pelvic Mesh MDL Settles for $775 Million

Endo International, through its subsidiary American Medical Systems, agreed to pay $775 million to settle roughly 22,000 defective medical device lawsuits. The lawsuits were brought on behalf of women all over the United States who allege serious injuries caused by Endo’s pelvic mesh products.

Each of the victims will receive an average of $35,000 for their injuries, pain and suffering.