Class Action Suits

Table of Contents

An Introduction to Class Actions

A class action lawsuit is one that is brought on behalf of a collective of people having comparable legal claims, or “class,” of people. A plaintiff or a small handful of identified plaintiffs (plaintiffs whose names are on the surface of the court documents) files a complaint on behalf of a larger group of nameless plaintiffs, the number of whom might potentially reach several thousand. Because the anonymous plaintiffs and the named plaintiff(s) have a common legal grievance, they are recognized as members of a class. For instance, if a plaintiff believes that everyone who worked for a certain company in a comparable situation throughout the relevant period has a claim that is identical to theirs, they may initiate a class action on behalf of all such workers. Before a class action may move forward once a plaintiff files it, the court must “certify,” or approve, the class.

The class need not include the anonymous plaintiffs. They may decide to take their legal claims to court on their own, or not at all. Notification of the litigation and the option to opt out of the class are delivered to the unidentified plaintiffs following the certification of the class. If someone so chooses, they are not included in the class and their legal rights will not be impacted by the class action lawsuit. As a result, those who choose to opt out of the class are not bound by the class action’s eventual resolution, whether it comes from a settlement or judgment. Similarly, non-class members are not eligible to receive any reimbursement that could be granted to the class; yet, they are free to file independent cases based solely on their own legal claims.

Federal or state courts are the venues for class action lawsuits. The conditions for filing a class action in federal court are outlined in Federal Rule of Civil Procedure 23. State-specific regulations govern class actions.

The Benefits and Drawbacks of Class Actions

Plaintiffs can file minor lawsuits through class actions if they would be too expensive to pursue individually. Class actions can also balance the power differential between powerful entities and low-resource individuals. Individuals increase their capacity to litigate, negotiate, and resolve conflicts collectively.

A judge in federal court must authorize the settlement of a class action.

Although a class’s size gives its members strength, it also restricts their options. The plaintiffs without a name—those who declined to opt out—have the least influence on the lawsuit. For example, the named plaintiffs may agree to a settlement that binds all class members, even if some members wish for a jury trial and verdict to decide the issue. Ultimately, class action lawsuits are costly and challenging to litigate due to their complexity, requiring more time and resources from the court and the lawyers.