How do Class Action Lawsuits Work?

Many people have enough familiarity with the legal system to understand the basic structure of a typical lawsuit.

For example, in criminal actions, a governmental entity, represented by an official such as a district attorney or solicitor, brings an action against a defendant, alleging violation of a criminal statute. In the average civil action, one plaintiff sues one defendant, although it’s not unusual to have additional plaintiffs or defendants.

But what about class actions? It’s a species of legal action that most of us have heard or read about, but haven’t necessarily studied. In this article, we’ll explain the basics of what class action lawsuits are and how they work.

Keep in mind that our discussion will be very general. Entire treatises exist detailing the ins and outs of class action lawsuits, but we’ll do our best to provide an overview.

What Are Class Action Lawsuits and Why Do They Exist?

Class action lawsuits are an American creation, but have now been adopted in some other countries. In a typical class action lawsuit, either one or a small number of plaintiffs file a lawsuit on behalf of numerous people who have suffered a similar harm.

In these instances, plaintiffs can find strength in numbers. This is especially true when the damages to one person would not justify the expense of litigation against a powerful defendant.

Class actions may take on makers of dangerous drugs or other products; predatory lenders; employment issues; and environmental issues, just to name a few common examples.

Requirements for a Class (Plaintiffs or Defendants)

The requirements and mechanics of class action suits have been derived in great part from Federal Rule of Civil Procedure 32. Thus, we’ll look to that rule for guidance. (Oregon’s rules for state court class actions can be found in Oregon Rule of Civil Procedure 32.)

Typically, to bring a class action suit, one or more plaintiffs must show the following:

  1. That there are so many people in the class that it would be impractical to join them all in the lawsuit.
  2. That all the members of the class share common questions of law or fact. In other words, for efficiency, it’s important to make sure that everyone is litigation a similar issue.
  3. That the claims or defenses of the named plaintiffs or defendants are similar to the claims or defenses of the other members of the proposed class.
  4. That the representative parties will fairly and adequately protect the interests of the class.

Note that even when a class action lawsuit is filed, it must be approved by the judge before it is allowed to continue. This is referred to as certification of the class.

The Difference Between a Lead Plaintiff and Class Members

The Lead Plaintiff represents the class and will be heavily involved in the litigation, just like any other lawsuit. It will be important to confer with an attorney and meet all the requirements of class action litigation.

Members of the class, on the other hand, often don’t have to do anything unless and until a settlement is reached. Normally, class members receive a class action notice in the mail. A person can participate or choose to “opt out.”

An example of when a person may choose to opt out is when that person’s damages are greater than most other class members. The person may prefer to file his or her own lawsuit.

There are a minority of cases that require a class member to “opt in.”

What Happens if a Settlement Is Reached?

Most class action lawsuits are ultimately settled. When that happens, funds are sometimes automatically distributed to class members. In most instances however, it’s necessary to file a claim form.

Important Note

It’s important to note that the rules for pursuing mass tort cases are different and more complicated. The way settlements are handled is also different and more complicated. We’ll discuss these issues further in a future article.

If you believe you have rights related to a mass tort action, we advise that you seek legal counsel promptly.

Call with Questions

Class action lawsuits can create a number of issues about which you may have questions. They are an important tool for holding defendants accountable for wrongful action but can be complicated. The personal injury attorneys at Nelson MacNeil Rayfield are available to answer your questions.

Call us at 1.877.928.9147 For A Free Consultation!

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