Any time a lawsuit involves a group of people that is represented by a single member of the group, the lawsuit can be said to be a ‘Class Action’ lawsuit.
If you’ve ever received a postcard, letter, or packet in the mail notifying you that you could have a class action lawsuit claim against a company or individual, then you already know what we’re talking about.
Consumer class action lawsuits are fairly common. They are a generally effective means of holding larger companies accountable for their practices in dealing with consumers. Some examples of famous class action lawsuits include the following:
- Price vs. Philip Morris, Inc. (2003/2006): In this landmark class action lawsuit, attorney Stephen Tillery sued Philip Morris for fraudulent advertising. Philip Morris was making claims that ‘light’ cigarettes were safer than full-flavored cigarettes, which was flatly untrue. A judgement of more than $10 billion was levied against the defendant in the case.
- Fraley vs. Facebook, Inc. (2011/2016): When Facebook decided to use members’ images and likenesses to create ‘Sponsored Stories’ for their own profits, a California court stepped in and deemed the practice to be unlawful. The result was a $20 million settlement fund used to compensate affected parties and to be distributed to non-profits for various purposes.
At its core, a class action lawsuit is a legal tool that is used to allow a large group of people to be party, as collective plaintiffs, to a suit against a company or person. Regardless of how numerous the affected people are, there needs to be at least one person who represents their interests. This person spearheads the lawsuit, files motions, and often has a legal team supporting their efforts until the wrongs of the defendant are redressed through court judgments (or until the case dissolves for other reasons).
History of Class Action Lawsuits
In the United States, class action lawsuits have been around since at least the early 19th century. The concept was essentially imported from England, where it was termed ‘Group Litigation’.
The oldest reference to modern class action lawsuits can be found in Rule 48 of the Federal Equity Rules, which were court rules that governed civil procedures in federal court.
An excerpt reads as follows:
“Where the parties on either side are very numerous, and cannot, without manifest inconvenience and oppressive delays in the suit, be all brought before it, the court in its discretion may dispense with making all of them parties, and may proceed in the suit, having sufficient parties before it to represent all the adverse interests of the plaintiffs and the defendants in the suit properly before it.
But in such cases, the decree shall be without prejudice to the rights and claims of all the absent parties.”
Today, class action lawsuits that target big businesses take a lot of time and money to orchestrate.
The Corporate Response to Class Action Lawsuits
Many larger companies have developed means of protecting themselves from these kinds of lawsuits. One of the most common methods involves requiring consumers to agree to ‘Collective Action Waivers’ before consuming a product or service.
For example, many software companies or internet websites will require users to agree to Terms of Service contracts as a condition of using their products or services. These Terms of Service will often have Collective Action Waiver clauses built into them. But, because the ToS verbiage is so lengthy and complicated, most users don’t think twice about scrolling down to the bottom, clicking ‘accept’, and effectively absolving themselves of any class action lawsuit recourse in the process.
In order for a modern class action lawsuit to be successful, there needs to be a preponderance of incriminating evidence, a motivated and well-funded legal offense, and a very well-conceived strategy for filing the suit and walking it all the way through to a final judgment.
Class Action Lawsuit Claimants
Members of the ‘class’ of individuals who have been wronged by a company or individual and who have come forward to stake their claim in the suit are known as claimants. Claimants must often go through a documentation process that qualifies them for compensation if the lawsuit ends in a judgment against the defendant.
When this happens, the court overseeing the case will often order the defendant to establish a compensation fund from which payments will be made to claimants. Sometimes, this can take months or even years to accomplish, and in many cases, the payments made to claimants are comparatively small.
If you believe you may have a claim in a class action lawsuit, contact our offices to schedule a consultation.
