Class Action Claim Information Home
Attorneys New Securities Cases Links
A class action is a representative action wherein one or more plaintiffs actually named in the complaint, along with their counsel pursue a case for themselves and the defined class against one or more defendants. The claims of the "class representatives" must arise from facts or law common to the class members. Most class actions are called "plaintiff class actions;" however, in limited circumstances a class action can be filed against one or more defendants representing a group of defendants, i.e., a "defendant class" action.
In federal court, the procedures for certifying a class and the requisite elements for certification are governed by Rule 23, Federal Rules of Civil Procedure.
Most class actions are filed for compensatory (money) damages. Class actions may also be filed to resolve disputes over a "limited fund," where the money available is inadequate to fully compensate all class members. Occasionally, class actions are filed to seek a declaratory judgment. Finally, a class action may seek injunctive relief. For example, a class action may be filed to request the court order the police or authorities to discontinue an unconstitutional practice.
Yes. If the constitutional and procedural protections required for fairness are met in the underlying action, all absent class members are bound to the judgment or settlement of the case. However, if the action is primarily for compensatory damages, absent class members are entitled to notice and an opportunity to "opt-out" (exclude themselves) from the proceedings. If a person opts-out, he is not bound by any judgment or settlement of the class action. In the event a class action is for declaratory or injunctive relief, notice is not required to bind absent class members.
Generally, before a court certifies a class action, it must conclude that there are too many class members for them all to be named as parties in the lawsuit. Technically, class members do not "join" into the litigation, but decide to participate by not "opting-out." It is only in rare instances when a suit is filed as an "opt-in" class action. In those rare instances, a claim form or request to join form may be necessary. Ordinarily, the notice issued to class members in the usual suit for compensatory damages will tell the class if they need to take any action to participate. In a suit for compensatory damages, any class member who does not "opt-out" may be bound by the results of the litigation if it proceeds as a class action. If a class member should determine, however, that he wants to participate in the suit as a named party, he may hire his own lawyer and seek to intervene (participate) in the lawsuit.
The answer depends on the nature of the suit and individual circumstances. Some class actions seek recovery for a large group of people; however, individual damages may be small. For instance, if a mortgage company was improperly charging interest, and as a result every class member paid $100 more than should have been charged, it may not be practical because of the cost of litigation to pursue such a case individually. On the other hand, if a person has substantial damages and a serious claim, a lawyer should be consulted to assist in making the decision.
In a class action for money damages, lawyers who represent the class are generally paid out of the recovery, i.e., "common fund" they create for the plaintiff class. In class actions involving declaratory judgments or injunctive relief, lawyers may be paid by the plaintiffs that hired them, or in some cases, by the defendants if the plaintiffs win.
Attorney fee awards are subject to court review and approval. Ordinarily, if an award is made in a common fund case, it will be awarded as a percentage of the fund created for the class. A benchmark award generally accepted by the courts is approximately 25%, although the award may be adjusted higher or lower depending on the specific facts of a case.
Step 1: The first step is the drafting and filing of a complaint against the defendants. This document is then filed in court and delivered or "served" on the defendants by the U.S. mail or a process server.
Step 3: After the answers are filed and any motions ruled on, a period of "discovery" will usually take place. Discovery involves the lawyers demanding documents from the other side, asking written questions, and taking depositions. Often, courts will hold a conference with the lawyers and set a timetable for preliminary discovery needed for certification to be completed.
Step 2: After the complaint is filed, the defendants will usually file an answer denying the allegations. Alternatively, they may elect to challenge the complaint by filing certain motions challenging the lawsuit. If motions are filed, an answer will be required after the judge rules on the motions unless the case is dismissed.Step 4: During the discovery phase, the defendants may file motions to challenge the legal sufficiency or underlying factual basis for the action. These are usually called motions for summary judgment. If a defendant wins, some or all of the claims of plaintiffs may be dismissed.
Step 5: After all preliminary discovery is completed, the plaintiff will file a motion to certify a class action. The defendants will file objections to certification. The Court will have a hearing. If plaintiffs win, the case proceeds to be certified.
Step 6: Notice. If the lawsuit is one for money, the court will order that notice go to the class. Notice is published in the newspaper or sent through the mail. This notice advises class members of their rights, and sets deadlines for objecting, "opting out," or entering an appearance through a lawyer.
Step 7: Trial or Settlement. After final certification is granted, additional discovery may be needed before the case is tried. After that discovery is completed, the case is set for trial unless it settles. The trial of a class action procedurally is the same as for any other civil lawsuit.
Links:
ClaimsCompensation.com - Experts in researching and filing class action claims on behalf of investors. Includes latest information on class action cases that have settled.
- Contains helpful links to a variety of class action sites.
Swiss Bank Litigation - Official Site for the $1.25 billion Settlement against Swiss banks.
Much of the above information was printed with the permission of www.classactionlitigation.com © 2002, 2004 Timothy E. Eble. This web site is a very valuable resource for additional information on class action cases.