How a Class Action Litigation Works
In a class action lawsuit, one or a small group of individual persons or businesses serve as representative plaintiffs for approximately 40 or more other individual persons or businesses who have suffered a similar legal wrong. These class representatives typically seek to remedy legal wrongs against a group of similarly situated individuals known as the class. The common types of legal wrongs that are the subject of class action lawsuits include those that concern similar monetary losses, breach of similar contracts, fraud, false advertising, defective products and property damage. Mass torts, that are similar to class actions, are typically used to address cases that involve physical and emotional injuries. In mass tort cases, the courts address common issues as a group and individual issues on a case-by-case basis.
Class actions exist because courts recognize that everyone who suffers harm deserves justice and compensation even if the amounts involved are too small to make the filing of separate legal claims financially feasible. A common complaint about class actions is that class members only receive a few dollars from a class action settlement. However, one reason that the amount class members receive from a class action settlement is sometimes low is because class actions are particularly useful for addressing losses that are to small to make individual lawsuits economically feasible. Of course this does not mean that class members will always receive a low settlement amount. The dollar amount of a loss sufficient to warrant a class action varies with the nature of the case. In some cases, class members have lost a hundred thousand dollars or more but due to the nature and complexity of the case it would cost hundreds of thousands of dollars to litigate an individual case. In those cases, a class action may be useful even though individual losses are substantial. For example, class members in some of the life insurance churning class action settlements received checks for over $100,000 but the cases cost over $500,000 to litigate. In those cases, even though the losses were substantial, the cost to litigate the case made an individual case economically unwise.
Class actions also exist to allow citizens to serve as private attorneys general. Although state attorney general offices are to protect the public from misconduct similar to that often addressed in class actions, often their limited resources preclude going after every instance of misconduct. Class actions allow private citizens to join together to seek remedies for the misconduct that cannot be addressed by state attorneys general. A good example of a class action performing this function is when millions of consumers are wrongfully overcharged some small amount such as a $10 or less. Although the amount is small, if the wrongdoer is not held accountable, they may be tempted to continue overcharging consumers. Worse yet, competitors of the wrongdoer may engage in overcharging to be able to compete with the wrongdoer. A class action allows private citizens to band together and hold the wrongdoer accountable for this small, but nevertheless wrong, overcharging of consumers.
Below is a brief overview of how class actions work. However, class actions can be complex. Although brief discussions of topics, such as class actions, appear here and elsewhere on the Leist Warner website, the only way to get all of your questions answered about a potential or ongoing class action lawsuit is to consult with a Columbus class action lawyer at Leist Warner.
How do Class Actions Proceed?
Every class action starts with a complaint. The complaint is usually against a wrongdoer that is large enough to have impacted many individuals. A good complaint is the key to a successful class action. An experienced class action attorney who knows how to win a class action concerning a defective product, improper action, dishonest service, false advertising, fraud, breach of contract or other misconduct will thoroughly research the statements of numerous individuals who have experienced similar misconduct, the product, the defect, the documents, the law, and every aspect of a potential class action case prior to filing a complaint. If necessary, a good class action attorney will engage experts to help with the investigation prior to determining whether to file a class action complaint. At Leist Warner we put many hours into the research and investigation relative to a case before determining whether to file a class action complaint. If we determine it is a good class action, we put many additional hours into the drafting of the class action complaint. The complaint is the key to successfully telling the court why your class action deserves to be certified as a class action and presented to a jury. The complaint is the foundation of a class action. No stone is left unturned in the investigation and preparation of a class action complaint. A case that should not have been filed as a class action or has a poorly drafted complaint can be costly and result in little or no recovery for class members. Leist Warner thoroughly investigates our class actions and prepares comprehensive complaints to make sure that does not happen.
Once the complaint is filed class actions use special procedures to ensure that proving the claims of the class representatives will prove the claims of all class members and that the rights of absent class members will be sufficiently represented. The case for all class members is proven by proving the case of the representative plaintiffs. While many procedures such as the collection of evidence and the right to reach settlements before waiting for a jury decision are the same for class actions as they are for other civil lawsuits, class actions have additional rules and procedures to ensure that the class is sufficiently cohesive such that proving the case of the individual representative plaintiffs will in effect prove the case of the entire class and protect the interests of absent class members. The primary procedure used to determine that the class is sufficiently cohesive is class certification. In class certification, the plaintiffs must show that:
- The class is so numerous as to make a class action necessary;
- The claims of class members have common legal and factual issues;
- The claims of the representative plaintiffs are typical of the claims of other class members;
- The class representatives are adequate representatives of the class, and (in most cases);
- The common issues are predominate, or the key to resolving the case; and
- The class action procedure is superior to any other procedure for resolving the claims of class members.
It may sound simple, but as the attorneys at Leist Warner, with over 20 years experience litigating class actions will tell you, it can be quite complex and require an experienced class action lawyer to be successful at getting a class certified.
Using the complaint that is the foundation of the lawsuit, class counsel will ask the court to certify a class of similar individuals whose claims share a common identity. It is not necessary that every issue be identical. Only the key legal and factual issues must be sufficiently similar. For example, a case may be one in which documents demonstrate that every class member was overcharged some amount for a service. Class counsel will use these documents and other evidence to show the court that all class members were overcharged some amount for the service. Thus, if counsel proves that the overcharges to the class representatives were illegal, it will effectively prove that all class members were illegally overcharged for the service. The amount by which each class member was overcharged may vary but the fact that the overcharges were illegal can be proven on a class basis.
Once the case is certified, it will proceed to trial. At trial, class counsel will seek to prove the cases of the representative plaintiffs. If successful, it will prove the case for all class members.
How Do You Know if You Qualify as a Class Representative or Class Member?
A “class representative” is an individual who represents the class. These representatives help secure money and other relief for all of the class members by essentially standing for the rest of the class in court and through the litigation. Many individuals can be a good class representative if they are willing to put the interests of the class first and they have a claim that is sufficiently similar to the other class members. The best way to determine whether you could be a good class representative is to contact the experience class action litigators at Leist Warner. They will thoroughly investigate your case and determine whether you will make a good class representative.
A class member is anyone who falls within the definition of the class that is certified. Using the example of the service overcharge above, anyone who was overcharged for the service would be a class member in that class. In a settlement class, the class may be defined as all persons who were part of a particular group and how much you were harmed may be determined through a claim submission process.
What Happens When a Class Action Lawsuit Ends?
If the class prevails at trial or the case is settled, class members are typically compensated on some basis relative to the amount recovered and the amount of harm that the particular class member suffered. Class action lawsuit attorneys such as those in the Columbus offices of Leist Warner work on a contingency basis, meaning they do not receive a fee unless the case is won at trial or settled. Additionally, in a class action lawsuit, the fees of class counsel must be approved and awarded by the court.
Before the court gives final approval to a settlement, the court will order that notice be given to all class members. This notice is important. Among other things, the class notice tells class members:
- How and when to file a claim if it is a claims based settlement
- How and when to object to the settlement
- How and when to opt out of the class if they desire not to participate in the settlement.
It is wise to read this notice carefully and, if necessary file a claim. Many class actions do result in substantial relief and class members should take advantage of the relief provided by the settlement. Claims forms are typically made as simple as the facts of the case permit and often claim forms can be filled out online.
If you are wondering whether you may be entitled to relief from a class action, check the Leist Warner website and Facebook page for news of settlements that may provide relief to you.
Ask a Columbus Class Action Lawyer
You no doubt have many more questions about class action lawsuits. We welcome those, and we always provide free consultations. Ask away online or give us a call at (614) 222-1000.
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