Class Action

A Class Action is a type of civil litigation lawsuit. Lawsuits are normally filed by one individual who is affected by the cause of action. In a Class Action lawsuit, it is filed by more than one individual usually against a single defendant. These kinds of lawsuits are appropriate when the damages are too small for individual claims or when a lot of individuals are affected by the damage claimed. 

Generally, Class Action lawsuits are often filed against a lot of institutions. Government entities, retailers, employers, financial institutions, and manufacturers are often the subject matter of a Class Action litigation. Some Class Action lawsuits are dependent on the governing law. 

In the United States, a Class Action is a form of representative litigation. The end goal of a class lawsuit is to obtain a classwide relief for a civil wrong that the defendants allegedly committed. The claimants are represented by a lead or a representative claimant. It is the representative claimant who directs the litigation. 

Ultimately, it is the representative who files all of the necessary papers and gets the case certified by a judge, the process is referred to as a class certification. There is class certification that typically occurs after the parties have engaged in motion practice to determine the class members and the class representation. The representative claimant is also responsible for negotiating a settlement on behalf of the class. 

The principal source of law for a Class Action to prosper in the United States is Rule 23 of the Federal Rules of Civil Procedure (Fed R Civ P 23). Most of the states have enacted the standards that are analogous to Rule 23 that aim to protect the rights of the class members.

Filing a Class Action lawsuit requires following a specific course of action. It requires that the following circumstances are present:

• A Big Number of Litigants. The individuals claiming to have been damaged by the cause of action must be so numerous that joining all members is impractical.
• Commonality. The case must raise common questions of law or fact. All of the litigants must present a common question that needs to get answered through the judicial process.
• Have A Representative. This will also be discussed in the succeeding part. 

Judicially, to file a Class Action lawsuit, the following are the requirements:

• The group of plaintiffs is represented by one or more lead plaintiffs. Usually, the lead plaintiff is one or two individuals who can represent the whole class. This one main plaintiff is often the one who is most affected by the damages and one who is able to eloquently state what the lawsuit stands for. 
• The injuries suffered and the allegations must always be the same and similar to those of the other class members. This rule is to make sure that the representation is always the same. 
• Once everything is ready, the representative is ready, the class lawsuit must then get certified by a judge. The judge certifies that the class is a representation of the claim. 
• It is then the duty of the lead plaintiff to demonstrate that the plaintiffs have a valid claim against the defendant. Since he represents the group and all group members, he must be able to present his claims. 
• The plaintiffs will then get notified through mail or any other means available. 
• It is necessary to always be represented by a lawyer when doing a Class Action.

The main plaintiff has his own set of responsibilities, they are the following:

• Obtain the services of a lawyer. The individual representative needs to obtain the services of a lawyer. He is responsible to vet and pick the lawyer or counsel who will assist the group in their class suit.
• Consult with the lawyer through the whole process. Consulting with a lawyer throughout the process is the main function of the main plaintiff. 
• Settlement or Negotiate. It is important for individual representatives to also discuss how they can settle or negotiate a settlement. The settlement should fit the compensation that the individual members of the class need. It is very important for the main representative to keep in mind that a settlement is not always the best option. However, it is up to him to decide.
• He is the Public Face of the Class. Since he is the one who represents the class, the representative is considered as the public face of the class. He answers all of the concerns of the public, the questions of the media, and everything else in between. He is considered as the man who can address the concerns, internally and externally.

To get class certification, the plaintiff must prove the following:

• Number Of People Affected. The judge will determine the number of people affected. For a class suit to prosper, the plaintiff must be able to prove that he was harmed by the actions of the company that was being sued as well as a number of people. The judge may decide whether or not the number of people affected qualifies for a class suit or should find individual lawsuits. 
• The Legal Issues They Face. The judge will also determine if there is a common legal issue, as well as factual issue, that is common to all class members. The plaintiffs must share in the issues and must have suffered the same injury. 
• Application of Legal Claims. The person or people who are bringing the lawsuit shall potentially affect all potential class members. They must serve the interests of their class members as well as all of the other people. It must set a precedent.
• Adequate Representation. Just because a lawsuit is one that has a lot of people involved, it does not mean that there is already adequate representation. It is important for the plaintiff and the attorneys to represent sufficient interest in the case. In general, the attorneys must also show that they have already handled complex cases and situations.

No, an individual cannot file a Class Action suit. There are many differences between a Class Action and an individual action. As to the number of litigants, the individual lawsuit often only has one individual affected by the damages while the class lawsuit requires a class, a group of people who have been affected and damaged by the cause of action. As to the compensation, an individual lawsuit will get compensated based on a lot of factors. Usually, if members of the same class do not file a class lawsuit and decide to just push through with the fact that they can file a claim individually, those who filed first get to receive more money than those who filed later. When one files a class lawsuit, every individual gets the same amount of compensation as awarded by the courts. When a class files individual lawsuits, there are different courts that may take cognizance of the case. This means different judges, different rates of time, and different appreciation of the facts involved. Also, when a class files individual lawsuits, the results are not guaranteed to be the same.

There are already a lot of Class Actions that have been decided in the United States. The lawsuits vary depending on the subject matter involved. Some of the more popular ones that set a precedent are the following:

• Wal-Mart Stores, Inc v Dukes, 131 S Ct 2541 (2011) – In this case, the Supreme Court overturned the grant certification because of the failure of the representative to show that the suit involved common issues on a single discriminatory policy.
• Comcast Corp v Behrend, 133 S Ct 1426 (2013) – In this case, the Court did not approve of the class certification as there was no proof of common injury or damages. 
• Dow Corning Breast Implant Litigation (1998): $3.2 Billion – one of the biggest hits that the cosmetic surgery world experienced happened in the 1990s when the implant manufacturer Dow Corning, was sued for silicone breast implants that caused health problems such as autoimmune diseases  to the patients.
• Tobacco Master Settlement Agreement (1998): $206 Billion – The case brought down the big names in smoking Philip Morris, R.J. Reynolds, Lorillard, and Brown & Williamson and caused a lot of them to pay off the debt within 30 years from the time of the issuance of the decision. The settlement money was paid to the States who filed a case and spent a lot of money on Medicaid on smoke related illnesses.
• Enron Securities Class Action (2006): $7.2 Billion –  Rampant corruption caused the company to file for bankruptcy despite being considered as one of the most profitable companies in the United States.
• Worldcom Securities Class Action (2005): $6.2 Billion – Another controversial Class Action that led to a big settlement is this case that is surrounded by corruption and financial securities manipulation.
• Exxon-Valdez Oil Spill Litigation (2001): $5 Billion – The oil spill of the century, the ruling for this class suit is a $5 billion in punitive damages to around 32,000 plaintiffs in the class.

There are different types of Class Actions. To know more about them, they are listed below:

1. Antitrust Class Actions – Antitrust Class Actions are lawsuits used to stop practices that restrain trade and the free market. It aims to compensate those who are harmed by the incident. In a world economy where the goal is to keep the market free and competitive, lawsuits are filed against individuals or companies that try to control the market. Antitrust class actions are most focused against companies but they may also be filed against a single individual. In cases of monopolies, price-fixing, bid rigging, tying, exclusive dealing, and price discrimination, antitrust class actions can be filed. Of course, this one is kind of hard to pursue since the individual is expected to have all of the documentary evidence that will aid him in prosecuting. It is harder to do when you are filing a class suit because not every individual is expected to keep documents or even know how to keep the integrity of the document.

2. Consumer Class Actions – Consumer Class Actions are those that depend primarily on the consumer experience. Individuals who have experienced damage caused by false advertising, unfair business practices, anti-competitive conduct, defective products and prescription drugs, f, and other instances of consumer fraud and violations of consumers’ rights, have a right to go after the companies. Under Consumer class actions, there are different types of actions, such as the following:

• Deceptive trade practices;
• Defective and dangerous products;
• Deceptive and false advertising;
• Deceptive warranties and promises;
• Unfair debt collection practices;
• Breach of contract;
• Automobile dealer fraud;
• Unfair business practices; and
• Mortgage fraud.

3. Employment Class Actions

4. Securities Class Actions

5. Environmental Class Actions

6. Public Health Class Actions

7. Public Safety Class Actions

Basically, whenever there is a common class with common interest, a common damage caused by a single individual or corporation, there is a Class Action that can be pursued by the individuals affected. If you have watched any crime shows or law related shows, you know that any subject matter can be made into a Class Action as long as the requirements of the rules are complied with and the Class Action is certified by a judge.

The main law that applies to Class Actions is from the Federal Rules of Civil Procedure. Rule 23 Class Actions discusses the requirements and the processes that the individuals would have to go through before they are able to get certified for a Class Action. Every State would have their own laws on Class Actions but they will still be bound within the rules of federal law.

Class Action Legislation comes with a single goal. Courts in various states have determined that there are usually three common goals when it comes to Class Actions. The following are the three common goals of Class Action, and they are the following:

• Judicial Economy. Since a Class Action involves many claimants who have the same cost of action and concern, it is more economical and if fission to handle the case as a whole and not individually. Class Actions promote a more efficient quarts system by avoiding the clogging of the dockets of the court. When you allow cases of the same courses of action, being defended by one person or being prosecuted against one person or organization, you have a more efficient court system.
• Access to Justice. Access to justice is another one of the main goals of a Class Action. Since litigation is probably one of the more costly activities in the world, not a lot of people can’t afford to pay the lawyers nor give beer time and resources to litigate. Through a Class Action, the small claims are properly dealt with and the individual claimants are able to deal and go on with their everyday lives. At the same time, litigants are able to still get access to justice without giving up so much of their time and resources. By allowing a single litigant to represent the whole class, the class gets their fair share of justice.
• Behavior Modification. Modification of behavior is another one of the main goals of a Class Action. When you file a Class Action, you are able to force the hand of the defending organization or individual to change their actions and their protocols because such existing ones have affected a lot of individuals and cost damage to them.

Settling a Class Action is not easy. It is going to be challenging because there are a lot of interests at stake as well as a lot of individuals who want to protect their own self interest. In order to properly set an a Class Action there is also a very specific set of rules that has to be followed and complied with by the main litigant, the counselor, and the members of the class.

The first thing that one should know about settling a Class Action is the fact that it should be approved by the courts. All Class Action settlements are expected to be approved by the courts so that there is a proper determination of the obligations of the parties and to ensure that the Class Action settlements are fair, reasonable, and adequate to pay off all of the interests of the individuals involved.

Getting the court’s approval is another thing that you should keep in mind when settling a Class Action. There are a few steps that the counselor and the main litigant should take. The first one is to seek the preliminary approval of the settlement. During this stage, the parties must show that the proposed settlement will likely get the final approval and that the court will also likely certify the class. In this stage, there are a few things that the court will look at:

• That the class representatives and the counsel have provided adequate representation for the members of the class;
• That the negotiations conducted were conducted at arm’s length;
• That the relief provided for the class is adequate; and
• That the proposal treats class members equitably relative to each other.

The adequacy of the relief provided for the class is determined after taking into account the different factors involved in the case such as the costs, risks and delay of trial and appeal, the effectiveness of any proposed method of distributing relief to the class, the terms of the proposed attorneys’ fee award, any side agreements to the settlement; and parties should also identify for the court the proposed allocation of the settlement funds, settlement administrator, the methods of notice to absent class members, and content of the notice.

It is also required that the parties should provide class notice of the proposed settlement to the absent class members. Rule 23 is very clear that the court must provide direct notice to every member of the class in a reasonable manner. The parties should know how to coordinate with the claims administrator and ensure that the proper notice is given to all members of the class, including the ones that are considered as absent.

There is also the requirement that within 10 days after filing a proposed settlement with a federal court that exceeds an amount in controversy of $5 million, every defendant involved must provide notice to the “appropriate federal official” and to the “appropriate state official” in every state where a class member resides. This is provided for in the Class Action Fairness Act of 2005 (CAFA) where government officials have ninety days to review the settlement prior to final approval by the court.

The notice should also include the fact absent class members have a deadline to file objections with the court prior to the hearing on final settlement approval. The parties should also file a response to the objections prior to the hearing.

Of course, when you settle a case, you should also anticipate those who will opt-out and object to the case. The defendants should provide for a “blow provision” in the agreement wherein the defendants are given an option to terminate the settlement agreement if a specified threshold of absent class members elect to opt out of the settlement.

Finally, after all of the things have been settled and the requirements have been submitted, the parties are expected to  move the court for final approval of the Class Action settlement and seek a final approval hearing following expiration of the ninety-day CAFA notice period. The court must determine whether the settlement is “fair, reasonable, and adequate” to the class members. Compliance with the other requirements of the law is also necessary so it is important to check that. 

For example, the Private Securities Litigation Reform Act of 1995 requires parties settling Class Action claims file under the Securities Exchange Act to ensure the final approval order includes “specific findings regarding compliance by each party and each attorney representing any party with each requirement of Rule 11(b) of the Federal Rules of Civil Procedure as to any complaint, responsive pleading, or dispositive motion.” If you have a case to settle and you think that you are also subject to a special law, you may try to look at the specific applications of special laws.

An appeal to a Class Action decision by the court may be had by the main counsel and the main party litigant, especially in cases where the case had been dismissed or they are not happy with the decision. The more common question, however, that some individuals have is more focused on whether or not an individual who is not the named individual in the trial or in the Class Action, can appeal the same.

The answer is: it depends. There are three schools of thought that have been making rounds in the legal world as to the right of the unnamed individual to appeal a decision. First, there is the most permissive position which allows unnamed class members to appeal a settlement unconditionally. Under a second, slightly more restrictive, approach, unnamed class members may appeal as long as they have objected to the settlement in the court below. Third, some jurisdictions shift the focus of this question by requiring unnamed class members to intervene in the action-thus actually becoming named parties-before appealing to case.

The American Bar Association predicts that there will be a lot of Class Actions that should be expected after the pandemic. This would range from the deceptions and consumer Class Actions, event cancellations, flight cancellations, and school trip cancellations. There should also be an expected spike in cases related to delivery applications, overpricing of materials, university refunds, and many others.