CLASS ACTIONS

Class actions are a procedure which permit individuals who have similar claims to be joined together to prosecute their claims in a more efficient manner. This is accomplished by permitting a representative or representatives to sue on behalf of a class of persons when the issues in dispute are common to all members of the class and the persons affected are so numerous as to make it impracticable to bring them all before the court.

Class actions are intended to promote two main goals. First, they allow individuals who have been injured by large, well funded corporations or institutions to seek judicial remedies by spreading the cost of complex and time-consuming litigation over the members of the class. Second, they protect consumers by deterring dangerous and deceptive business practices in the future.

ABOUT CLASS ACTIONS

A class action is a procedure within the rules of procedure for civil lawsuits, e.g., non-criminal disputes. A class action permits a representative or representatives to sue for a class of persons when the issues in dispute are common to all members of the class and the persons affected are so numerous as to make it impracticable to bring them all before the court.

Depending upon the type of class action, resolution of the lawsuit binds all members of the class certified by the Court. Thus, a class action is an exception to the general rule of law that lawsuits can only be prosecuted by and bind the persons named as parties to the litigation. Within Federal law, the rules governing class actions are found in Federal Rule of Civil Procedure 23.

Class actions are designed to advance several important public policy goals. First, a class action is often the sole means of enabling persons, even those with serious injuries, to remedy injustices committed by powerful, multi-million dollar corporations and institutions. As stated by former United States Supreme Court Justice William 0. Douglas, “The class action is one of the few legal remedies the small claimant has against those who command the status quo.”

In other situations, each person within a large group may have suffered only limited damages and the cost of individual lawsuits would be far greater than the value of each claim. The total damages, however, to the class could be quite large. The wrongdoer would have the incentive to continue its fraudulent conduct but for a class action. Joan Claybrook, President of Public Citizen, a consumer advocacy organization, has observed, “[class actions] deter dangerous business conduct where individual consumers, acting alone, would not have the means to sue, or the clout to force product recalls and compensation for all those harmed.”

Finally, where the defendant has engaged in a pattern of wrongdoing, a class action can provide an effective remedy for the group without incurring the costs of thousands of separate lawsuits and risking inconsistent decisions by the courts.

Examples of class actions include claims by:

• Homeowners and residents of a neighborhood affected by the pollution from an industrial plant
• Large groups of employees for age, gender or race discrimination
• Consumers who purchased defective products, ranging from automobiles to contact lenses
• Patients prescribed medicines with harmful side-effects
• Merchants and consumers who pay inflated prices for goods caused by the unfair business practices and anti-trust activities of large corporations
• Doctors who receive slow or no payments from insurance companies
• Investors who are victimized by fraud committed in connection with the sale of stocks and other securities

There can be attempted abuses of class actions. In testimony before Congress, Elizabeth J. Cabraser noted that, “An increasingly cynical public sees the lawyers on both sides, who either work for hourly fees regardless of the outcome, or stand to win huge contingency fees if they prevail, as the only winners in such a system.” This image of class actions, however, is often advanced by interests seeking to undermine the ability of consumers who would otherwise be unprotected against corporate misconduct.

Class actions provide access to the courts for average citizens to ensure that all of us, from the humblest citizen to the largest multinational corporation, will remain accountable to each other, retain our rights and freedoms, and obtain justice for our grievances. Furthermore, before any class action settlements may occur, the judge presiding over the case must give notice of the settlement to the class, allow all who wish to be heard to state their positions and/or objections, and approve the settlement only if it is fair and reasonable to all members of the class.

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