The Lawsuit Process: How Class Actions Work
Class action lawsuits provide legal relief to large numbers of individuals who were wronged by a corporation and only suffered relatively small monetary losses.
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How A Class Action Lawsuit Works
- The lead or named plaintiff(s)
- This is the person (or persons) filing the suit. His or her name will appear on the complaint, which is the legal document that starts a lawsuit. (For instance, in a lawsuit styled Katz v. Live Nation, Katz is the name of the lead plaintiff.)
- The class members
- While the lead plaintiff is the one filing the lawsuit, there may be hundreds or thousands of people whose legal rights are affected by the suit and its allegations. These people are known as class members. Class members will be covered by any settlement or judgment that results from the lawsuit. Because class members are not the ones filing the lawsuit, it is likely that they may not be aware of the suit until they receive a class action notice in the mail.
- The defendant
- This is the company or person being sued.
Filing a Class Action Lawsuit: A Step-by-Step Process
Determine Whether a Class Action Can Be Filed
When someone contacts a law firm about a potential class action, an attorney will evaluate the facts of the situation to determine whether a lawsuit can be filed.
In doing so, the attorney may:
Find out how many other people may have been injured in a similar way.
Find out whether a lawsuit making the same allegations has already been filed.
Determine whether the person still has time to file a claim under the applicable statute of limitations (time limit for filing lawsuits).
Research previous rulings and judicial opinions to determine if lawsuits involving similar claims were successful.
Ensure the potential defendant (the person or company being sued) is not shielded from liability because of a bankruptcy filing.
Determine if the client should file an individual lawsuit instead of a class action.
Courts will dismiss frivolous lawsuits, so it's important that the attorney properly evaluates the potential claim before filing a lawsuit. This is why many of the cases listed on our website are currently marked "under investigation." Often, attorneys will want to speak to consumers when trying to determine whether a class action can be filed. This will help them determine whether it would be worthwhile to file a case.
For Example: An attorney has reason to believe that Wessex's GreenLeaf dryers are breaking within three years of use. After hearing from several consumers who purchased the dryers and needed to replace the appliances shortly after purchase, the attorney decides to hire expert engineers to further investigate the matter. These engineers discover that the premature failure stems from a design defect present in thousands of GreenLeaf dryers sold across the country during the past three years. The attorney decides he wants to pursue a class action lawsuit against Wessex to help the thousands of consumers who purchased the dryers recover compensation for the cost of replacing their appliances.
File a Lawsuit
If the attorney believes a class action can be filed, he or she will draft a complaint, which is a legal document filed in court describing the facts of the case and the damages being sought.
The complaint will also describe the proposed "class" of individuals who may be covered by the lawsuit. The class may be defined on either a nationwide or state-wide basis. Some class actions, for example, only represent individuals who live in the same state as the person who initiated the lawsuit.
For Example: In his complaint, the attorney states why the dryer is defective, the legal reasons why Wessex should be required to pay to fix it, and the estimated amount of money needed to repair the defect. He also outlines the proposed class of people to be covered by the suit as anyone in the United States who purchased a Wessex GreenLeaf dryer in the last three years for personal use.
Certifying the Class
Although a lawsuit may be filed as a proposed class action, it does not officially become a class action until the judge presiding over the case rules that the lawsuit should be given class action status. This ruling is known as the class certification.
Before the judge rules that a case can move forward as a class action, the lawsuit may be referred to as a putative class action. A putative class action is assumed to be a class action, but does not officially become one until the judge has issued the class certification ruling. For a class action filed in federal court, the attorneys representing the class members must satisfy several requirements, including establishing that the number of people who could be covered by the class action is large enough that it would be impractical and inefficient to file numerous individual lawsuits. You can read more about these requirements.
For Example: The judge decides that the case meets the requirements and certifies the case as a class action. The case can now be referred to as a class action and the class of people represented by the suit is officially defined as anyone in the United States who purchased a Wessex GreenLeaf dryer in the last three years for personal use.
Discovery is the investigatory phase of a lawsuit where attorneys working on the case may request documents from the company being sued. The lawyers representing the class may use these documents to prove the allegations contained in the lawsuit. During the discovery process, the lawyers may also conduct depositions of individuals with knowledge of the events and circumstances that are the subject of the lawsuit.
For Example: The attorneys request the design and engineering documents from Wessex that show that the dryer was not designed properly. The lead plaintiffs are also asked questions regarding how and when their dryers broke, and the engineers who designed it are asked about whether the company chose to manufacturer it in a certain way to money.
Resolution of Claims Through Settlement or Trial
Many class actions settle before going to trial. When a class action lawsuit settles, a fund may be established by the defendant to compensate the victims. The judge presiding over the lawsuit will review the settlement to determine if it provides fair and adequate compensation to the class members. The settlement does not become final until the judge issues an order approving it. Find out what you need to do after a class action settles.
If the lawsuit does not settle, the case will be tried before a jury in a court of law. During the trial, the person who initiated the class action may be asked to testify, and other witnesses may be called to offer testimony regarding the facts that formed the basis of the lawsuit. It is still possible for the case to settle during the trial; however, if the case still does not settle, it will be handed over to the jury, who will be tasked with finding either in favor of the class members or the defendants.
For Example: After several negotiations, both parties come to a settlement agreement that allows each class member to recover $700.
Notify the Class Members
After the lawsuit has been resolved, attorneys working on the case may issue a notice to the class members informing them about the settlement or judgment and their right to opt out of the case. The notice will describe the underlying facts alleged in the lawsuit and describe the groups of people who may be able to claim part of the settlement. In some lawsuits, this notice is sent after the judge has certified the case as a class action and again after the lawsuit has been resolved.
Should some members fail to collect their compensation by the settlement deadline, one of three things may happen to the remaining money. It may be given back to the defendant, distributed among class members who claimed their awards or donated to a charity or non-profit organization whose mission falls in line with the purpose of the case.
For Example: The attorneys handling the case send out a class action notice to all those covered by the suit with instructions on how to claim part of the settlement.