Information on Class Action Lawsuits
In a class action lawsuit, a representative plaintiff sues on behalf of numerous plaintiffs claiming the same injury. Most legal standards for class actions emanate from the Federal Rules of Civil Procedure; however, note that state courts have their own procedural rules for class actions, and they may vary widely. Therefore, any party considering filing a class action lawsuit should seek local legal counsel.
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History
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The concept of the class action lawsuit evolved in English law. In England, when cases related to each other via a common transaction, the law found it inefficient to decide them all separately. English law created an equitable legal device known as a "bill of peace." This device allowed all parties to resolve their disputes in a single legal proceeding by forcing joinder of all parties. The bill of peace effectively consolidated all claims based on a certain set of facts into one case.
Class Action
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In a class action, a representative plaintiff brings the action on behalf of the other plaintiffs. The representative must give notice to all prospective plaintiffs and give them an opportunity to "opt out" of the lawsuit (thus allowing them to bring their own suits later if they like). If the parties settle or plaintiffs receive an award, all of the plaintiffs divide the amount (minus any attorney fees). Class actions are advantageous in creating efficiency; consolidation also allows continuation of the suit by numerous plaintiffs who might not otherwise have the resources to continue. However, class actions do create fertile ground for more litigation (thus burdening courts), and a possible unjust result, since many defendants have an incentive to settle the lawsuit rather than go through a protracted legal battle in the courts.
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Filing and Certification
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As a first step in filing a class action lawsuit, the representative of the class makes a motion for class certification (that is, recognition as a class by the applicable court). The class complaint must contain language to the effect that the representative is suing on behalf of a similarly situated class. If the court grants the certification, the court must approve class counsel. If the court denies certification, the representative plaintiff may still continue his individual suit, but will no longer represent the class of plaintiffs.
Certification Requirements
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Under Federal Rule of Civil Procedure 23, there are four requirements for a court to certify a representative of a class: numerosity (there are too many parties to join them all to the lawsuit); commonality (the class shares common questions of law or fact); typicality of the representative (the representative has suffered each harm claimed by the class as a whole); and the representative must "fairly and adequately protect the rest of the class." The latter requirement includes assessment of the representative's lawyer, who must be not only competent, but also properly motivated to protect the rest of the class as well as his client.
Class Action Fairness Act
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In 2005, Congress passed the Class Action Fairness Act. The act reduces the requirements for federal subject matter jurisdiction for some interstate class actions. This effectively made it easier for defendants to remove the case from state to federal court. The act reduced the effects of a practice known as "hometowning"--by bringing interstate class action suits in local courts (and trying the case in front of a local jury) the plaintiffs increased their chances of winning the suit. By making it easier for the defendant to remove the case to federal court (which is theoretically more impartial), the Class Action Fairness Act reduced the disadvantage to out-of-state defendants.
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