What is a Class Action Lawsuit?

What is a Class Action Lawsuit

If you are like most people, you have probably heard about class action lawsuits. Many people are not certain what a class action lawsuit involves or what people make up a class. The experienced lawyers at Swartz Swidler handle class action lawsuits on behalf of their clients and might be able to answer your questions.

What is a class action lawsuit?

Class action lawsuits are filed when a number of people have legal claims that are connected to an entity but who do not find that filing individual actions is practical for them. They might have limited losses on an individual basis, making the time involved in pursuing a claim a poor investment. However, when there are others who have also experienced similar losses that may number in the hundreds or thousands, they might be able to group together to file a single class-action lawsuit so that they can hold the company liable for its wrongs. In order to form a class, the lawsuit must meet specific procedural requirements.

You are able to opt out of a class action lawsuit. If you do, you won’t receive an agreed-upon portion of a settlement. However, you will be able to file your own individual lawsuit against the defendant if you choose to do so.

Common class action types

Many different problems may affect large numbers of people and lead to class actions, including the following:

  • Defective products
  • Fraudulent or unfair business practices
  • Securities fraud
  • Employment law claims

Requirements for class action certification

Before a group can proceed as a class action, the class must first be certified by the court. Class actions may fall under state or federal law, which may have different procedural requirements. The federal class action certification rules are found in Rule 23(a) of the Federal Rules of Civil Procedure and include the following:

  • It must be impractical to join all of the individual plaintiffs into one lawsuit because of their number
  • All claims must have common questions of fact or of law
  • The named plaintiffs must have identical claims as the other class members
  • The named plaintiffs will offer reasonable and fair protection for the remaining class members

Class-action notices and opt-outs

Once a case has been certified as a class action, all of the potential class members must be notified. The notices will normally include information about the option to opt out of the class. You will be given the option to opt out in a case that consists entirely of monetary damages. By contrast, you may not be allowed to opt out if:

  • Your individual claim would be unfair to the other parties; or
  • The class action is seeking injunctive relief.

If you opt out of the class action, you will not be a part of it and will not receive any portion of a settlement that may be reached. You will be able to file your own lawsuit and won’t be bound by a resolution of the class action lawsuit.

Court approval of the settlement

Any settlement agreement that may be reached by the class representatives and the defendant must be approved by the court. The class members must also be notified of a settlement. The notice will include details about the settlement and your right to object to it.

Contact Swartz Swidler

If you have a legal problem with a company that you believe might also affect a large number of other people, you might want to start by researching whether or not there’s a pending class action related to your issue. You may also talk about your potential case with the experienced team at Swartz Swidler. Call us today to schedule your consultation.