What is a Class Action Lawsuit and What is Its Purpose?
DEFINING CLASS ACTION LAWSUIT
Everyone can admit there are legal terms tossed around that may not be fully understood. There is personal injury, mediation, liability, wrongful death, etc.
Have you ever heard someone was involved in a “Class Action Lawsuit” and wondered exactly that meant? Maybe you asked, but likely you did not.
In today’s day and age, knowledge is power.
So let’s take a deeper look into what a Class Action is and how it is utilized in our society.
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What is a Class Action Lawsuit?
According to Findlaw’s Legal Dictionary, a Class Action is the following:
“an action in which a representative plaintiff sues or a representative defendant is sued on behalf of a class of plaintiffs or defendants who have the same interests in the litigation as their representative and whose rights or liabilities can be more efficiently determined as a group than in a series of individual suits.”
Let’s break this down in laymen’s terms.
Essentially, when a group of individuals experience the same injuries or suffer from the same symptoms due to typically one single action or product, they are able to sue as a complete group.
Therefore, for a class action lawsuit to exist, one single factor, business, company, or experience must result in many individuals having similar negative experiences.
So what qualifies as enough of a “negative experience?”
Some causes of Class Action Lawsuits include the following:
- Pharmaceutical drugs with side effects/false promises
- Medical device malfunction
- Motor vehicle malfunction
- Corporate misconduct
- Security fraud
- Consumer fraud
For more information regarding defective products and how they could lead to a class action lawsuit, please click here.
Why a Class Action Lawsuit?
Often, the injuries suffered in these types of cases are significant, yet minor enough that they these individuals may not have followed through with a lawsuit on their own.
However, as a group, the value of the lawsuit naturally increases. By suing as a group (or, in this case, a “class”), the list below would end up being consolidated:
Important note: If the volume of individuals within the class is significantly high, it becomes unlikely and impractical for individuals to file individually.
Once the class has filed the lawsuit, it is typically titled either the “lead plaintiff” or “named plaintiff.”
A class action lawsuit can either be covered by the Federal Law or the State Law.
However, Federal Law will take over if:
- The financial compensation breaches $5,000,000
- A direct plaintiff is in a different state from the defendant
- A plaintiff is a United States of America citizen, and the defendant is foreign
- A plaintiff is a citizen of a different country, and the defendant is a USA citizen
If the lead plaintiff wins the case, that means that the courts did, in fact, find the defendant guilty and the class group divides the financial compensation.
If the defendant wins and is not found guilty, then the class lawsuit is dismissed, and the individuals within the group are unable to file an individual lawsuit against the defendant.
Example of a Class Action Lawsuit
Unfortunately, there are many existing examples of lawsuits where large groups of individuals have all suffered due to a single factor.
Let’s look at a famous and historical case that qualifies as a class action lawsuit.
Brown vs. the Board of Education of Topeka, Kansas
Just a brief history lesson, Brown vs. the Board of Education ruled that it was unconstitutional for school systems to separate children based on their skin color. This 1954 racially charged lawsuit dramatically shaped the future of the Civil Rights movement in the United States.
So how is this a class action lawsuit?
Thurgood Marshall led the plaintiff group which was a consolidation of five other cases that spread across various states. Marshall argued based on a specific case in Topeka, Kansas (that encapsulated the suffering from every state) that the “separate, but equal” conditions these schools were preaching were not the case at all.
Eventually, the courts sided with Marshall, and he won the class-action lawsuit against the school systems.
How to “Join” a Class Action Lawsuit
The technical term for joining in on a class action lawsuit is titled, “opting in.”
How do you become aware that a class action lawsuit is occurring if it had not crossed your mind to initially file or if, by chance, you had not realized that you were negatively affected?
Typically, every affected individual is entitled to be noticed about the lawsuit. While this may not be completely possible, there are public strategies that can take place to encourage others to opt in.
This can include:
- Television Ads
- Internet Ads
- Newspaper Ads
- Magazine Ads
Class actions involve significant research, are timely, and if directly affected, some individuals may not have the opportunity to opt-out and must live with the outcome of the lawsuit.
Once you opt-in, you are automatically awarded the eventual financial compensation. However, you do waive your opportunity to ever file individually.
Important note: While opting-in is typically a good idea if you strongly believe that your suffering and/or sustained injuries are worse than other members of the class, it is wise to not opt-in and file your own, individual lawsuit.
For more information about opting in/out, click here.
What Are the Benefits of Class Action Lawsuits?
So, we know what Class Action Lawsuits are now, but what is their purpose? Are there any benefits?
One striking benefit is the efficiency of class action lawsuits.
Imagine the usefulness of a hospital. Now imagine if every injured person had to visit and be sent to hundreds or thousands of different locations and need doctors and nurses to constantly be spread out. Sounds fairly hectic right?
However, condensing everything into one hospital, one location makes everything more effective.
The same can be said for class action lawsuits. Having everything condensed, and compiled into one trial is more practical.
Also, each individual in the class action will receive some type of guaranteed financial compensation if the plaintiff wins. While it may not cover full expenses (should the defendant end up bankrupt, etc), there will be some monetary gain for each person within the class action.
Related Article: What You Need To Know About Fireworks In Georgia.
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