What is a Class-Action Lawsuit?

A class action lawsuit allows a civil lawsuit to be brought by numerous plaintiffs, either individuals or business entities, against one or more defendants.  The purpose of a class action lawsuit is to make the resolution of similar claims by multiple plaintiffs against defendants more efficient for both the courts and the parties.  Prior to a lawsuit becoming considered a class action, the court must certify that the plaintiffs claims meet certain standards before the court will allow plaintiffs to move forward with their class action lawsuit.

A court will look at the following characteristics of the plaintiffs that are requesting the court to make their lawsuit a class action:

  • the class of people affected must be so numerous that joining them all into the lawsuit is “impracticable”
  • the same or similar questions of law or fact must be common to the class
  • the claims (and claimed losses) of the representative parties must be typical of those of the class, and
  • the representative parties must be able to fairly and adequately protect the interests of the class.

If the court finds that all the above criteria are met, it will “certify” the class, which then means that each individual plaintiff that would be entitled to relief from the defendant, does not have to be named in the complaint.  Similarly, if the court denies class certification, then the plaintiff have to be named individually in the complaint in order to seek recovery from the defendant.

Obviously, defendants strongly oppose class action lawsuits because it raises the number of plaintiffs who can potentially recover financial compensation from the defendant without ever having to be named in the complaint.  Accordingly, the potential cost to settle the lawsuit could be substantially higher.

Class action lawsuits also benefit plaintiffs because typically the amount of recovery a plaintiff would recover in an individual lawsuit would not be worth pursuing due to the expense in pursuing a lawsuit.  However, with a class action lawsuit, this allows plaintiffs to pool their damages together making it cost effective to pursue a lawsuit and obtain a recovery.

Some common class action lawsuits include (1) employment lawsuits alleging wage, overtime violations by the defendant; (2) product liability cases where a product, such as an air bag defect, causes injury to many plaintiffs; (3) lawsuits involving shareholders suing the company; (4) consumer fraud cases, such as charging improper fees.

If you have questions about a potential business, employment or personal injury lawsuit, contact the attorneys at The Rinka Law Firm – 310-556-9653.

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