How Do Class Action Lawsuits Work?

When large companies charge unlawful fees, pollute the environment, violate labor laws, or deceive consumers, victims may have the right to sue for damages. But it can be difficult and expensive for a single person to hold a whole company accountable for wrongdoing. A class action lawsuit may be the perfect tool when the same bad practices have harmed a large number of people.

Class Action Lawsuits and Named Plaintiff

A “class action” is a type of lawsuit where a person or group of people can sue on behalf of a larger group of people who have had the same or similar damages. Some examples of class action cases include breach of contract claims, consumer fraud, faulty products, data breaches, or violation of environmental regulations. Notably, the larger group of people (the “class”) does not have to appear in court and may not even know they have suffered damages. Class action suits promote justice in three ways:

  1. Provide compensation directly to victims. A lawsuit is usually the only way to hold companies directly accountable to the people they have harmed. Fines and penalties imposed by the government do not compensate victims of defective products, deceptive advertising, or environmental damage, for example.
  2. Deter corporate wrongdoing. When a company harms a single person, the damages may be minor and may not seem worth the time and expense of pursuing a lawsuit. However, when companies know that hundreds or even thousands of victims can join together in a single lawsuit, the cost and risk exposure may make the corporation think twice about their behavior.
  3. Make litigation more efficient and effective. If individuals pursue legal action against a big company, the cases can take a long time, with high costs for attorneys, experts, fees, etc. It can also mean that the legal cases are repetitive, with each side presenting similar evidence and arguments over and over for each victim. When the cases are grouped into a class action, the costs are much lower and the issue is resolved more efficiently.

Each class action lawsuit requires one person to be the lead plaintiff. This is the person who represents the entire group of victims and who actually files the lawsuit on behalf of everyone. Because their name appears on court documents, they are often called the “named plaintiff.”

While other class members may sit on the sidelines and observe the case, the named plaintiff is directly involved in the litigation. The named plaintiff may be the first person to initiate the lawsuit, or they might be chosen carefully to ensure their damages are the most representative of everyone in the class. In some class action lawsuits, there can be more than one named plaintiff. The named plaintiff will likely have to gather their documents and information relevant to the lawsuit, sit for a deposition, and attend hearings every now and then.

How Does a Class Action Start?

A class action lawsuit starts when one person decides to file a lawsuit and thinks other victims have the same damages. For example, if a person was harmed by deceptive advertising, they may suspect that others were also exposed to the same advertisement and may have the same damages. Or if a person was charged a bogus fee on their cell phone bill, it is reasonable to assume that a lot of other people were charged too. This could be the perfect set of facts for a class action.

This person then consults with a class action lawsuit attorney, who will review the factual and legal issues and determine whether a complaint can be filed and whether the case is suitable for a class action.

When the class action complaint is filed, it will state that the suit is on behalf of the first person — the lead plaintiff — and on behalf of all the other people who had the same damages.

A judge then reviews the complaint and determines whether the case can proceed as a class action. Generally speaking, a case is appropriate for class action when all the affected people will have similar cases, with similar legal and factual considerations and similar damages. However, cases involving bodily injury to a large number of people are rarely suitable for a class action. This is because in bodily injury cases, each person is affected very differently by the harmful product or event such that their claims are not similar enough. In that situation, the injured person should file an individual action or join in a mass action.

Which Courts Hear Class Action Suits?

Class action lawsuits can be heard in state or federal courts. If the defendant company has broken a federal law, the case should always be filed in federal court, even if the damages are minor. Most large class action lawsuits are filed in federal court because the people involved reside in different states. Class action cases are often moved from state to federal courts depending on specific factors in the case. When reviewing a class action lawsuit, an attorney considers which court will be the most appropriate and files the complaint accordingly.

How Can Nix Patterson Help?

If you think you may have a class action complaint and want to know more about how class action lawsuits work, contact the experienced class action attorneys at Nix Patterson today.

We understand a wide range of complex litigation issues, have recovered billions for victims of corporate wrongdoing, and work on a contingency basis so you pay nothing unless we win your case. Call us at 512-382-5333 or reach us online to schedule a free consultation.

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