Class Actions: How They Are Created, Who Belongs in One, and Why Class Actions Exist
Posted on Monday, March 13th, 2017 at 1:04 pm
The following post is part of our Law Student Blog Writing Project, and is authored by Linda Long, a Juris Doctor student at the NKU Salmon P. Chase College of Law.
“Well, I want to sue!” Slow down, buddy. Ease up on the reigns a little, and let’s create a game plan, shall we? What is the injury? Who was injured? Is this even the proper remedy to seek? These are all questions that need to be asked before any litigation is filed.
Although most litigation is based on a single plaintiff with particular injuries, there are times when another avenue to seek justice or to make the victim whole is more effective. I’m talking, of course, about a class action lawsuit. This blog is about what a class action is (as defined by Federal Rule of Civil Procedure 23) and when it is appropriate to form a class to file a lawsuit as a single plaintiff.
If there is a group of people that were hurt in a substantially similar way, then a class action may be the appropriate avenue of relief.
What is a Class Action?
When a group of similarly-situated people are affected by a similar claim, to promote efficiency in the court system, the group files a class action. By definition, a class action is: “a legal procedure that allows many people with similar grievances to join together and file a lawsuit. The lawsuit is filed by a lead plaintiff (or lead plaintiffs) on behalf of a larger group (the “class”) against a company/ companies and/ or individuals (the defendant/defendants).” Simply put, when a group of individuals have the same problem, to promote the efficiency of the court, that group sues as a single plaintiff.
The most common type of class action that a plaintiff brings is one allowed under Federal Rule of Civil Procedure 23 (b) (3). Simply put, a court will allow a class action to proceed if the particular questions of either law or fact are common to all members of the class. Meaning, if Jennifer, Linda, and Jedidiah have Toyota Camrys, and those Toyota Camrys have defective brakes and all three women are injured in the same way, it is possible the group injured by the car can form a class and sue the manufacturer of the car.
As we dive deeper into Rule 23 (b) (3) we will discover that a class action requires a true group effort. The class must have a central problem that is the dominate one, and each member of the class must share that same problem. For example, if Jennifer and Jedidiah’s Toyota Camrys had defective brakes, and Linda’s Toyota Camry had faulty air bags, Rule 23 (b) (3) prohibits Linda from being a part of the same class as Jennifer and Jedidiah. This is because Linda was not harmed in the same way that the other members of the class were; therefore, Linda’s claim is different, and won’t be properly resolved with a class action.
The last chunk of Rule 23 (b) (3) requires a class action to be a “superior” remedy to other methods of making a plaintiff whole. A class action is neither proper, nor permitted, if there is a more efficient way for a court to settle a controversy. If Mark and Jessie are both sick because they ate bad Applebee’s on date night, that does not mean that Mark and Jessie are automatically a part of a class. A more proper remedy for Mark and Jessie would likely fall outside of the scope of Rule 23 (b) (3) and therefore outside requirements of forming a class action. Their claim is outside of the permitted ways to use the option for a class action because this is such a particular harm. There is no evidence that this harm will be done again to patrons of Applebee’s, and there is no evidence that the restaurant has a pattern of making its customers sick. Further, Mark and Jessie have a remedy they can each pursue that is superior to the class action. Each of them can file for damages (or other appropriate claims) and likely be made whole that way. In Mark and Jessie’s case, bringing a class action is an inefficient use of the court’s time and resources.
Fen-Phen: The Classic Class Action Suit
For example, if a group of people all take a certain diet drug, and that diet drug turns out to be harmful in some way (for example if that drug causes seizures or even death) then the group of affected individuals sue. That was the case in the famous (or infamous) Fen-Phen litigation. The horror story of Fen-Phen is told as a cult classic to law students since its decision. However awful the facts here are, the Fen-Phen case is a fabulous example of why having the ability to file a class action is so important.
Fen-Phen is a case about a diet drug that was in the open market for a long time. This drug was found to be the cause of many consumers’ heart problems. The problems got so bad, that some consumers ended up with permanent heart conditions, and some tragically died after developing a heart condition after using Fen-Phen. So, a class action suit resulted. Members of the affected class, who were similarly situated, filed a suit for relief.
A potential benefit of filing as a class is that it shows strength for the plaintiff’s case. Class actions are filed in tort cases. A motivation in tort decisions is to keep someone or a corporation from doing something. In cases of consumers and drug producers, when multiple consumers are harmed by the producer’s product, and a class action is filed, the message that is sent is clearer. That message is that the drug producer needs to be mindful that its actions can, and have, hurt the consumer.
When to File a Class Action Lawsuit
A class action lawsuit can be filed when at least 40 people are similarly situated. A representative must be declared. Keep in mind that a common set of facts have to exist among the members of the class. After this is complete the class must be certified. When the class is a certified class, then a class action can be filed.
It is often said that when something is right, you will know it. That same logic applies to when to file a class action. Well, basically. Remember that Rule 23 certainly has requirements, but those requirements are arguably too vague to tell anyone what elements must be met before you are able to file a class action. Here is a clearer way to determine when to file a class action that is compatible with Rule 23 (b) (3):
The court finds that the questions of law or facts common to class members predominate over any questions affecting only individual members, and that a class is superior to other available methods for fairly and efficiently adjudicating the controversy.
That all sounds very legal and technical, but let’s break that rule down into clear elements. To put it simply, Rule 23 (b) (3) of the Federal Rules of Civil Procedure requires, before a lawsuit can be filed, that:
- Legal or factual claim are shared by each member of the class asserting those claims;
- The claims asserted are only on behalf of the class, individual grievances are not permitted to be brought up in a class action suit; and
- A class action is the best remedy the class has at law.
As a Side Note, and for a Smile
You deserve a break from black and white words, so here is a little cartoon about how class actions work under Federal Rule of Civil Procedure Rule 23(b) (3):
I found videos like these helpful during my first year of law school, and having something a little lighter to see was, oh so, appreciated! Hey, class actions are very complex and convoluted. The use of class actions is certainly limited to a narrow amount of cases, as we have seen. The likelihood of getting into court with a class action claim is slim to none. However, it is such a relief that the ability to file a class action suit exists. Typically, there is strength in numbers. When I say that, I mean that when there are multiple plaintiffs, the claim that is being asserted is more believable. Because lots of individuals are able to come together and assert that they have been harmed, that class is able to stand up to large companies, and tell them that “enough is enough.” That was the situation in the Fen-Phen case. A class stood up to the large pharmaceutical company that is Fen-Phen, and because the numbers existed, consumers were able to influence the practices of a company. This made the products safer and allowed those who were harmed to hold the company responsible and get help.
So, it is very important that our justice system allows for such a remedy. Without class actions, it is very likely that we would all live in a more dangerous world where companies could take advantage of the little guy. We can’t have that!
Would you like to enter a class action, but want a law firm that provides better customer service for a more personal touch? Give us a call and schedule a free consultation! Lawrence & Associates is Working Hard for the Working Class, and we want to help you.