The United States courts have settled 2405 class action lawsuits since 1996. As a citizen, you might’ve heard about famous class action lawsuits. An example is a case filed by industry workers against Silicon Valley top players.
Yet, these cases may not work the same. Believe it or not, the latest supreme court decisions may change all future collective lawsuits. Don’t know what we’re talking about?
We’ve got you covered. We’ll tell you all you need to know about these cases. Here are 7 must-know facts about collective lawsuits.
1. Collective Action Lawsuits Are Civil Cases.
These type of cases are civil lawsuits. Attorneys file class action claims at the state or federal courts. If you’re contacted about joining a class lawsuit, you should consider consulting an experienced lawyer.
A collective lawsuit may not be your best option. An example is how certain plaintiffs chose to file individual cases to receive compensation for the Equifax Data Breach instead of joining a class lawsuit.
2. Class Action Lawsuits Help a Group of Parties Receive Compensation.
If it’s the first time you hear about these lawsuits, you might’ve asked yourself how class action lawsuits work? While it may sound more complicated than you think, these cases are lawsuits filed to help a group of plaintiffs receive compensation for their damages.
Attorneys file most class action claims after they learn about damages that affect a certain class of individuals. After filing the case, the law firm contacts the plaintiffs that may meet the class requirements. Attorneys may contact them via mail, phone calls or even advertisements on tv.
When a law firm files a collective lawsuit, it may be years until they get paid for their work. Funding for lawyers helps them represent the class members and obtain the best outcome for the plaintiffs.
3. Your Collective Lawsuit May Not Qualify for Filing in Your State.
As a rule of thumb, attorneys may file most class action claims in state or federal courts. Yet, Supreme Court decisions from 2017 may change the applicable jurisdiction.
The case Bristol-Myers Squibb Co. v. Superior Court from 2017 decided whether out of state plaintiffs could consolidate their claims with Californians in the case. The Supreme Court expressed that the specific jurisdiction concept from the California Courts was too flexible.
This decision deemed out of state plaintiffs ineligible to consolidate their claims. This Supreme Court decision may influence cases where specific jurisdiction determines the plaintiffs’ eligibility. Yet, your state court may not even apply this decision in local cases.
Attorneys say the decision may not influence that many cases. Because plaintiffs file most class action claims in federal courts. Jurisdiction requirements may vary depending on the type of claim and damages.
4. Typical Class Actions Allegations Range from False Advertising to Unlawful Employment Practices.
You might’ve heard about class action claims related to defective products and drugs. Yet, that’s only the tip of the iceberg when it comes to these cases.
Some examples of class actions filed are false advertising, discrimination, defective products or drugs, and employer violation to wages laws.
5. Certifying the Class Is the Most Important Step in a Class Action Lawsuit.
After the plaintiffs file and serve the claim to the defendant, the courts certify the class. Believe it or not, it’s the most important step in a class action claim. The requirements and process may vary on a state and court basis.
For the courts to certify a class, the plaintiffs may have to prove the following facts about the group.
- The representative plaintiff suffered the same damages as the class.
- Define the class to distinguish its members.
- Prove that joining all the class members to the case is impractical. If the class has 21 or fewer members, it may not be enough for the courts.
- The class members share legal interests or facts related to their injuries.
- Litigating the representative plaintiff’s claim is enough to decide the absent class members’ claims.
- The class action is the more efficient way for the defendants or plaintiffs to solve the claim.
It will come down to the evidence and the judge’s criteria. If the class isn’t certified, the courts will dismiss the collective case.
Keep in mind that the federal courts may follow different criteria. Under the Class Action Fairness Act of 2005, a federal judge may decline to hear a case if the class has less than 100 members. Also, the judge may decide against hearing a case where the defendants are government officials.
6. Arbitration Clauses Can Prevent You from Filing a Collective Lawsuit.
If it’s the first time you hear about arbitration clauses, you should get familiar and learn as most as you can about them. You might not read all the small letters from the contracts you sign but, most of them include arbitration clauses. These clauses limit your rights when it comes to the lawsuits you may file.
A typical arbitration clause mandates any issue that arises from a contract to go to arbitration. If you sign a contract with an arbitration clause, you may not join a class action claim even when you meet the class eligibility criteria. These clauses may apply in contracts from financial institutions to employment offers.
If you have any questions about any contract, you should consult an attorney. Asking the other party to explain the conditions or clauses isn’t the best approach. You want to make sure you get the best deal without limiting your rights.
7. Collective Lawsuits Prevent Plaintiffs from Filing Individual Lawsuits.
While collective lawsuits can help you receive compensation for your damages. If your class loses the case, you may not file an individual lawsuit. As a class action plaintiff, the justice system bans you from filing because your case has been heard by the courts.
You forfeit your right to file your individual case the moment you join the class. Before deciding to join a class action, it’s recommended that you consult an attorney to learn more about your options.
The Bottom Line
Class action lawsuits can help you receive just compensation for your damages. Yet, there’s more to these cases than you think. Before joining a collective lawsuit, you should consider consulting an experienced attorney.
An attorney can tell you more about your options and potential compensation. Some plaintiffs may be better off filing an individual lawsuit. Remember that class plaintiffs lose control over the settlement negotiation and ultimate case result.
Did you hear about the class action lawsuit against the Chinese drywall company? Read our article to learn all the details about the case.
