Q: WHAT IS A CLASS ACTION?
A: A class action is a lawsuit filed in state or federal court by a person, business, or small group who share a similar legal claim with a large number of other people, businesses, or groups. An example of a class would be all individuals who purchased a defective product and were similarly harmed by the product. If a court determines that the person or group who filed the lawsuit adequately represents the interests of the entire class of people injured by the wrongful conduct or negligence of the defendant (such as the manufacturer of a defective product), they can be “certified” as a “class” allowing the lawsuit to proceed as a class action. Once the lawsuit has been resolved by way of a settlement or verdict, all the members included in the class are bound by the outcome unless they affirmatively opt-out of the settlement.
Q: WHAT TYPES OF CLAIMS MAY BE BROUGHT AS CLASS ACTION LAWSUITS?
A: In general, many claims involving product defects, antitrust violations, violations of consumer protection (false advertising and deceptive sales practices) laws, wage and overtime violations, illegal background checks, ERISA and insurance disputes, mass torts, securities fraud, and shareholder oppression are best pursued as class actions. Both state and federal courts hear class actions, and the procedures are generally the same. In some cases involving violations of certain federal statutes, the class action can only be brought in federal court.
Q: WHAT IS THE ADVANTAGE OF A CLASS ACTION OVER AN INDIVIDUAL LAWSUIT?
A: Quite simply, a class action is often a more efficient form of litigation, both for the litigants and for the courts. Further, a person’s individual claim may be too small to pursue cost-effectively, so combining several people’s similar smaller claims into a larger pool of plaintiffs can justify the expense of litigation – especially against large corporations – and improve the chances of a successful outcome.
Q: WHAT IS MULTIDISTRICT LITIGATION?
A: When several individual lawsuits arising out of the same basic facts are filed in multiple federal courts, the cases can be coordinated into one district court. This process is known as multidistrict litigation, and the coordinated action is referred to as an MDL.
The judge in an MDL oversees all pretrial activities, just like a class action, and achieves many of the same efficiencies. Unlike a class action, however, an MDL preserves the individual’s claim separately – there is no class or class representative, just hundreds or even thousands of individual lawsuits assigned to one judge for pretrial proceedings.
Q: WHY DO COURTS USE CLASS ACTIONS AND MDLS?
A: Class action lawsuits and MDL litigation are both effective in leveling the playing field when individuals or small businesses sue powerful organizations. Like most of us, courts have limited resources, and class actions and MDLs provide a method to process the same legal and factual issues together. This efficiency extends to the defendants, too, who are saved from having hundreds of people answer questions hundreds of times by hundreds of different lawyers in several courts in multiple states.
Class actions and MDLs avoid that chaos, reducing the cost of expensive litigation for everyone and allowing courts to attend to other cases. They are valuable tools for seeking compensation, implementing an injunction, or determining the legal rights of a large group of people all at one time and in one court.
Q: WHAT DOES IT MEAN TO “OPT IN” OR “OPT OUT” OF A CLASS ACTION SETTLEMENT?
A: In certain types of class actions, a member of the plaintiff class (those bringing the lawsuit) may decide to participate (opt in) or not participate (opt out) in a negotiated settlement. A class member may choose to opt out in favor of bringing an individual lawsuit. Unless the class action notice indicates otherwise, class members who do not opt out are bound by the terms of the settlement.
Q: ARE THERE SPECIAL CLASS ACTION LAWYERS?
A: Any lawyer licensed to practice can file a class action lawsuit on behalf of his or her client. But class action lawsuits and multidistrict litigation are complex and require attorneys with specialized skills and firms with tremendous resources. Thus, it is wise to retain an experienced class action lawyer.
The attorneys in Sommers Schwartz’ Class Action group have the background and skills to pursue class actions and MDL litigation across the country. We have successfully brought and resolved class actions in unpaid wage and overtime cases, complicated insurance matters, consumer cases, RICO and antitrust actions, securities cases, and pharmaceutical drug and medical device cases. Whether you are a consumer, business or municipality with an issue worthy of class action or MDL consideration, we would be happy to discuss your case.