Class action lawsuits that involve personal
injury are usually are usually brought forward in large-scale
product liability cases.
Other class action lawsuits have been brought against companies
for certain business practices such as "after hours trading"
by mutual funds companies that involve financial loss and fraud.
A large number of individual, yet similar
lawsuits brought against the same defendant will most often be
grouped into a single class action lawsuit in an effort to find
a singular remedy for multiple parties.
One of the advantages of class action lawsuits over
hundreds, thousands or millions of individual lawsuits is that
a singular class action lawsuit will unclog the courts that may
be overwhelmed by individual cases. Another advantage is that
a singular cohesive verdict may be given rather than many dissimilar
verdicts that vary because of dissimilarity of laws between states.
Commonly, class action lawsuits are initiated in one state and
then move into the federal court system at the request of the
defendant. This is an advantage to the defendant since state courts
are seen to favor plaintiffs while federal courts are more often
seen to favor the defendants.
Because of the Class Action Fairness Act of 2005, pushed through
by the Republican majority as a part of tort
reform, large-scale class actions in excess of $5 million
are generally moved to the federal courts as long as more than
1/3 of the plaintiffs reside in a state outside the state in which
the lawsuit was initiated. The aim of the Class Action Fairness
Act of 2005 was to reduce excessive verdicts and reduce attorneys'
fees that were also seen as excessive, in light of the services
offered in the class action cases.
According to the Federal Rules of Civil Procedure, a class action
must have six components:
1. The class must be large enough and separate lawsuits would
2. The class has factual or legal claims in common
3. The claims are common among the group
4. The representative attorney must protect the interests of the
5. The issues common to the plaintiffs and defendant/s will dominate
6. The class action as presented will be a superior vehicle to
any other legal avenue for all involved
When a class action lawsuit is filed, it is submitted on behalf
of the named plaintiffs including a putative class. The term "putative"
simply means the known or reported group or class. This class
must be a large group who has suffered a common wrong from a common
source. Once the complaint is filed, the plaintiff needs to have
the class certified by the courts.
The defendant may argue that the class is not representative
or cohesive, the law firm handling the case is not well suited
to represent the class or that the case should not be handled
as a class action at all. As part of due process the court will
have notices of the class action sent out to an expanded list
of potential class action members. These notices usually give
the potential members of the class an opportunity to opt out of
the class action within a limited time-frame. Those who are thinking
of bringing forth their own individual lawsuits may wish to opt-out
in favor of an individual court proceeding. Settlement offers
may also be sent out to members of the class outlining the terms
of the settlement and the plaintiff's attorneys' fees.
High-Profile Class Action Lawsuits
The Exxon Valdez disaster of 1989, in which 11 million gallons
of crude oil was spilled into Prince William Sound in Alaska resulted
in 1,300 miles of beaches being fouled and tens of thousands of
coastal animals being killed. In 1994, a class action jury awarded
the plaintiff class $5 billion in punitive damages. The class
was made up of 32,000 fishermen, landowners and Alaska natives
who livelihoods were adversely affected by the disaster.
In August 2000, Firestone / Bridgestone recalled 6.5 million
tires that were related to rollover crashes of Ford Explorer SUVs
and other vehicles. In March 2004 a Texas judge approved a class
action settlement of $149 million covering the estimated 10 -
15 million in the class. The verdict did not, however, cover those
who were bringing individual lawsuits for damages in rollover
In May 1994, the Engle v. Philip Morris tobacco lawsuit was filed
on behalf of a class of smokers in Florida who had been adversely
affected by cigarettes with tobacco-related diseases (approximately
500,000 class members). In July 2000, the jury award $145 billion
in punitive damages. In July 2006, the verdict was struck down
by the Florida Supreme Court.