What is a Class Action Lawsuit?

What is a Class Action Lawsuit?

A class action lawsuit occurs when a large group of people suffer similar injuries because of a single individual or company’s negligence. In these cases, one or several people sue on behalf of the entire group. If they win, everyone wins. Maybe you’ve seen commercials on TV for asbestos and mesothelioma, or you remember the Fen-Phen diet drug. These are two examples of class action suits.

What are different types of class action lawsuits?

A class action lawsuit comes in many forms and is generally defined as a case where many people suffered similar injuries due to the negligence of one individual or company. Here are a few examples of some common types of class actions.

1. Consumer Fraud: When a company uses fraudulent business tactics to deceive customers.

Insurance Fraud

Examples include a health or auto insurance company denying a legitimate claim for benefits or a life insurance company illegally raising premiums. Transamerica Life Insurance was involved in a class action suit when they raised the cost of insurance premiums which violated state law and policies. http://www.investmentnews.com/article/20160323/FREE/160329968/transamerica-sued-for-cost-increases-on-universal-life-insurance

False Advertising

Examples include making deceptive claims on price or quality to get consumers to buy, advertising a product that they do not provide (bait and switch), and high-pressure sales tactics. Macy’s and Bloomingdales were involved in a class action lawsuit for a deceptive pricing strategy when they artificially inflated prices on items and then falsely discounted them. Plaintiffs claimed the “fake” prices were at least twice as high as the MSRP. https://topclassactions.com/lawsuit-settlements/lawsuit-news/338238-macys-bloomingdales-class-action-allges-deceptive-pricing/

Lending Fraud

Examples include foreclosure and mortgage fraud. Bank of America was involved in a class action suit after violating Federal Housing Administration (FHA) regulations by breaching promissory notes. https://topclassactions.com/lawsuit-settlements/closed-settlements/390177-bank-america-fha-insured-loan-class-action-settlement/

2. Defective Products: When a product is deemed unsafe.

Examples of defective products include recalled parts on a car or children’s toys that cause injury. Samsung was involved in a class action lawsuit over the Galaxy Note 7 that had a battery flaw causing the phone to overheat; some exploded. https://www.classaction.com/samsung-galaxy-phones/lawsuit/

3. Pharmaceutical Drugs: An FDA approved drug that turns out to be dangerous.

When a drug company is not forthright about all possible side effects or the drug causes harm. Janssen and Johnson & Johnson were involved in a class action suit because they didn’t sufficiently warn people about the risk of bleeding injuries associated with Xarelto blood thinner. https://topclassactions.com/lawsuit-settlements/prescription/530917-xarelto-blood-thinner-study-shows-heightened-risk-gi-bleeds/

Why do people file class action lawsuits?

When going up against a large corporation, an individual lawsuit may not have much chance of success. If enough people were negatively affected by the corporation, a class action is more powerful. People file a class action suit not only to be compensated for damages, but also to stop the offending company from future harmful or fraudulent practices.

How does a court determine a class action suit?

For a case to be certified as a class action it must meet certain criteria. For example, there must be a large number of plaintiffs (too many to individually sue) that all have similar issues and circumstances.

Who is the plaintiff in a class action case?

Since there are many plaintiffs in a class action lawsuit, usually one lead plaintiff acts as the representative for the group. Once a lawsuit is certified as a class action, the lead plaintiff is named.

Does the lead plaintiff get more money if the case is won?

Maybe. The lead plaintiff has the most involvement in the case. He or she consults with attorneys, agrees or objects to a settlement, and may be compensated more than other plaintiffs.

How many people do you need for a class action?

There is no exact number required for a class action suit. Generally speaking, once a plaintiff determines that many other people have suffered similar consequences as a result of the same individual or company’s negligent behavior or defective product, that person can file for a class action. Then is it up to the judge to determine if the case will move forward as a class action or be tried individually.

How much does it cost to hire a class action lawyer?

Most of the time there are no upfront attorney fees for class action cases because they are taken on a contingency basis. This means the attorneys pay all costs related to the case and then recover expenses and fees only after the case is won.

What is an injunction?

In a class action case, many plaintiffs suffered damages. It makes sense that the plaintiffs would want the defendant to stop the fraudulent conduct or act to prevent future harm to others. Plaintiffs may choose to seek an injunction when monetary compensation isn’t adequate. It is up to the court to provide injunctive relief, which can be temporary or permanent.

Class action lawsuits attempt to resolve disagreements between claimants who have similar injuries and defendants. There are pros and cons to being a plaintiff in a class action. If you have questions regarding personal injuries you’ve suffered due to the negligence of a company or defective product, contact us for a free initial consultation. Gottlieb, Johnston, Beam & Dal Ponte is Muskingum County’s largest full-service law firm.