What Is a Class Action Lawsuit and Who Can Join One?

Somewhere in the pile of mail you’ve been meaning to deal with, there’s a postcard telling you that you’re part of a lawsuit. You never even called a lawyer.

This is how most people meet a class action. Not by signing up, not by hiring an attorney, but by simply getting a notice about a case somebody else filed over a product you bought, a fee you were charged, or a faulty part in your car. The little post runs four pages of small type and asks you to make a decision.

A class action operates on different rules than an ordinary injury case and knowing which one you’re in is important. Here’s what a class action lawsuit actually is, what a judge has to find before one exists, and what to do when that postcard shows up.

One Lawsuit, Thousands of Plaintiffs

The federal courts define a class action as a lawsuit in which one or more members of a large group sue on behalf of the entire class. That’s accurate, but it undersells how different it all is.

In an ordinary case, you’re the plaintiff. In a class action, someone you’ve probably never met is the plaintiff, and you’re a class member. That person is the lead plaintiff, or class representative, and their case becomes everyone’s case.

Why build it that way? Because most of these claims are worth a nominal amount by themselves. If a bank charged four million customers an improper $32 fee, few people are likely willing to sue them over that. The math just wouldn’t add up for the customer, but it works beautifully for the bank.

But if you multiply $32 by four million, that’s a whole new kettle of fish. That’s the real function of a class action. It takes injuries often too small to litigate and places them into a case too big for the defendant to ignore.

What Are the Requirements for Class Certification?

Nothing becomes a class action just because the lawyers say so. A judge must certify (meaning: designate) a case as a class action. To achieve that label, the case must meet the requirements from Rule 23. Four things must be true:

• Numerosity: The class is so large that suing individually would be impractical.
• Commonality: There are questions of law or fact common to everyone in it.
• Typicality: The lead plaintiff’s claim looks like everybody else’s.
• Adequacy: That plaintiff and their lawyers will fairly protect the class.

For a class seeking money, there’s more. The common questions must predominate over the individual ones, and a class action has to be the better method available.

The word “predominate” does most of the work in practice. If proving each person’s claim would take its own small trial about what they were told and what it cost, certification usually fails. The class certification process may make or break these cases long before anyone talks about settlement.

Class Action or Mass Tort?

You’ll often hear these terms used interchangeably, but they are different.

A class action treats the class as one unit in one case. For a mass tort, each plaintiff has an individual case with individual damages, consolidated for pretrial purposes but resolved on its own facts. This is the structure used for defective medical devices and pharmaceutical injuries, where one person had a rash, another needed three surgeries. Mass tort vs. class action comes down to whether your injuries look like everyone else’s.

Class actions commonly involve the following:

• Consumer fraud
• Defective products
• Wage disputes
• Data breaches
• Environmental contamination

What Should You Do If You Receive a Class Action Notice?

People search for how to join a class action lawsuit, but most often you usually don’t actively join. You either fall inside the class definition, or you don’t.

If a notice reaches you, you’re probably in it. Rule 23 requires the best notice practicable, including individual notice to everyone reasonably identifiable. Also, the notice must tell you how to get out or object, if either are your preference.

Read it for three pieces of information:

• The class definition: Does it describe you, and are the dates accurate?
• The deadlines: There is typically one deadline to opt out (meaning: to take yourself out of the class), another one to object, and sometimes a separate one to file a claim for your share of the award.
• What you release: Staying in the class action usually means giving up your right to sue individually over the same conduct.

Doing nothing is a choice. In most damage classes it means you stay in and you’re bound by whatever happens. In some cases, you collect nothing unless you also return your claim form. In other cases, you still get the relief if you do nothing, without the need to complete a claim form.

Opting out may make sense when your losses are much larger or stranger than those of the average class member and a settlement formula won’t suffice. This decision is usually very fact-dependent and calls for weighing your likely recovery against the time and costs to pursue that recovery.  It is worth running past an attorney before the deadline.

What Should You Know Before Joining or Opting Out of a Class Action?

A class action notice may look like junk mail at first glance and reads like a form. It is neither. It’s the one document that tells you what a case filed on your behalf will do to your rights, and the date on it is real.

Troutman & Judge, LLC handles class action and mass tort work. Our partners have served as lead counsel in nationwide and state class actions, including a vehicle defect case covering roughly 50,000 owners, and other class actions against more than 75 financial institutions. Our firm also handles mediation, where a large number of these disputes end up.

If you have received a notice and you can’t tell whether staying in the case serves you, speak with an attorney before the opt-out date. Ten minutes today beats a lifetime of wondering whether you made the correct decision. And if something has happened to you and others that you think can qualify as a class action, call us.  We can help.