What Is A Class Action Lawsuit?

At some point in your life, you have probably received in the mail a notice from the courts stating that you are a member of a class action lawsuit and now you want to know what that all means. What should you do? What are the pros and cons to taking action? Where can you learn more about the process to make a better decision? If you are like most people, if you don't know what to do you simply file the notice in the trash can and forget about it. This may not be the best solution however. In this article, I will share with you the various options that you have and the things that you should consider.

The whole idea behind class action lawsuits is to provide a pathway for the normal person to be able to stand up to the largest corporate or private businesses who have legal associates galore, so that you can have an opportunity to correct the wrongs that have been done to you by the big conglomerates. It is important to remember that even though the actual damage or cost to you specifically is small, the illegitimate increase to the corporate entity can be enormous if done to hundreds or even hundreds of thousands of people or class members. With this in mind, you should think twice before tossing that notice the next time, while it probably won't make you rich, it may make a difference in how corporations treat people in general.

How A Class Action Suit Works (Thanks to Diamond McCarthy LLP for their input)

You come home from a long day at work and check your bills, investments, property, etc and discover that something isn't quite right. You pickup the phone and call the business where the error was made and inquire about when they can correct the matter. You get nothing but flack. They refuse to take ownership of the problem. After hours on the phone you get nowhere. You're not only frustrated, but angry, and you share your plight with friends, at the office, everywhere you go and it doesn't take you long to discover that you aren't the first person to face this problem and most likely, won't be the last.

You decide to hire an attorney, take legal action to get the company to correct the problem. But there is no response. Your attorney does a little research of his own, he finds more people who have been wronged, and files suit for everyone with the court. Your attorney now starts taking depositions, recording grievances, and asks that the court certify the case as a class action so that everyone in the same predicament can resolve their issue. The court agrees and certifies the case. And low and behold, you now have a class action lawsuit.

The court then states that each person involved needs to be sent a letter or notified that they have a right to file action at the same time as everyone else. Each person needs to be notified so that they can have their say and receive the same resolution as everyone else involved in the case. This is the place where everyone, rich and poor alike, including the person or persons who bring the claim, are treated equally. What this means, is that everyone, all class members, are supposed to have equal input, rights to any money or resolution ordered by the court, and so forth.

Mailed Notices

In most cases, there are several notices mailed to class members over the course of the case. The first notice is to inform you of what is going on as well as providing you with an option to opt-out or choose not to be a participant in the case and not be represented by the party who established this case and is sending you the notice.

If you choose to opt out, then you have no further rights in the case. You have two choices before you then, either let the matter go entirely or bring your own case before the court. However, neither of those choices will give you claim to any money that is garnered from the original case.

If you do not opt out, you are considered part of the case, are stuck with the settlement that is allotted, and prohibited in taking any further action on the matter. If for some reason you don't receive a notice, you have no idea what is going on, well, it sucks to be you, because the court just has to make "the best notice practical under the circumstances', if the opt-out date passes, you are considered in and bound by the courts decision. The case proceeds, sometimes for years. If you never received notice, you will probably never know about any money or other resolutions that you could have received.

At some point in time, all parties will either reach a settlement, which is presented to the court for its approval as to fairness, etc..., or the case is tried and the judge makes the decision.

In most circumstances, cases are resolved or settled by agreement by the parties and approved as being fair and equitable by the court. Both sides do a little give-and-take before resolving.

If the judge decision is in favor of the business or corporation, then, it's over and you and all of the class members are stopped from pursuing any further action on the same complaint.

However, if you win and the class members win, then the judge decides the damages, orders the company to make restitution, and orders notice is given where claim to the "pot" can be made. The "pot" can also be split according to a formula, which the court decides.

In either event, it's over and justice is done. Either the company is proven blameless, the wrong is corrected, restitution made, and errors on the part of the company are never committed again.

Brenda Segna