A class action lawsuit can be used when a number of people wish to participate in a lawsuit but the class is too numerous, or it would be too expensive to try each case separately. These individuals commence a case and retain lawyers to represent them and retain a class representative to represent them and the class. An example of this is hundreds of people who suffer alleged employment discrimination, including sexual harassment and wage and hour violations are now pursuing their job rights through class action lawsuits. In addition, class action lawsuits are also available to challenge a policy or interpretation of a statute or regulation, such as in a Medicaid case.
In order for a case to proceed as a class action, the following criteria must be met:
- The class of people must be a clearly definable group.
- People in the class must have suffered similar harm.
- Most members must be identified and be able to be contacted.
- Members of the class must receive the same fair treatment they would get if they brought individual lawsuits.
When these factors are present, a judge may give the group legal status to conduct their suit as a class action. After a class action lawsuit is approved, the presiding judge will determine the most effective way to notify individuals who may be interested in joining the action. This often involves sending a letter to potential litigants, or posting details about the case in local, regional, or national newspapers. The judge will attempt to ensure that the best interests of all members of the class have been adequately represented by the parties who filed the lawsuit and their attorneys.
Both parties may seek a summary judgement on a class action lawsuit in order to avoid a trial. Defendants often seek a summary judgement before the suit is certified as a class action, in order to avoid a costly trial, but judges rarely grant these motions. The plaintiffs, or class, may also seek a summary judgement ruling after the case has been established, in order to avoid trial expenses while still obtaining class-wide remedies. Judges generally dismiss motions for summary judgements at this point in the lawsuit, preferring to wait until the discovery phase is complete (often a years long process) before approving a settlement and distributing awards. The approval process for settlements generally involves:
- Preliminary approval of the proposed settlement and plan of distribution
- Approval of the form of notice and dissemination to all class members
- A fairness hearing where class members may be heard regarding the terms of the settlement
Class members have two options after receiving notice of a class action lawsuit. They may join, meaning their claim will be treated like all members of the class and then they simply wait for the case to be resolved and are entitled to the benefits of the judgement. Or, they may opt out, which allows the individual to bring their own claim, but does not entitle them to any of the benefits of the class action lawsuit.
While class action procedures differ in state and federal courts, the reality is they often provide the only means for hundreds of claimants to effectively litigate their overtime or discrimination claims by providing for pooled litigation resources and greater settlement leverage. However, if you have incurred significant damages which the defendant has the financial means to pay, it may not be beneficial to join a class action lawsuit and be bound by the terms of the settlement or verdict. Common complaints of class action lawsuits include excessive legal fees, insufficient payouts to claimants, and settlements that limit recovery for future claims. Consult with an attorney regarding you case to evaluate whether to participate in or opt out of a class action lawsuit.
STRATEGY: If you receive notice in the mail describing a class action that might affect you, or if you see an advertisement in a magazine concerning a suit, follow the directions in the notice and investigate the matter. Usually an e-mail address or telephone number is listed. At some point you will be asked to submit proof of your claim, and a court will review it. If you fit the certified class and the group bringing the lawsuit wins, you should receive a portion of the amount awarded or benefit in some way from its success.
