The Phases of a Class Action Lawsuit
By: LawInfo
Published: 04/2010
Class action lawsuits are different than individual lawsuits. One of the key differentiating factors is that class action lawsuits involve many plaintiffs. In order to protect the rights of all parties to a class action case, additional procedural steps and safeguards apply to class action lawsuits that do not apply to other kinds of cases.
The following phases, or steps, of a class action lawsuit are in addition to the common procedures that apply to all civil lawsuits:
· Parties ask for the complaint to be certified as class action: after a complaint has been filed, the plaintiffs must petition the court and ask that the case be certified as a class action lawsuit. In order to be certified as a class action case, there must be enough plaintiffs to make joinder of individual cases impractical and there must be common issues among the plaintiffs. Federal Rules of Civil Procedure and the Class Action Fairness Act of 2005 provide specific details about when a case qualifies for class action designation.
The defendant(s) may object to the request for class action certification. If an objection is raised then the court will hold a hearing to determine whether the lawsuit qualifies as a class action and issue an order. The order must define the class, the issues, the defenses, and appoint class counsel. An order will include:
o The names of the representative plaintiffs: the plaintiffs who originally filed the lawsuit will be named as the class representatives.
o The names of the lead plaintiff counsel: it is impractical for all class members to have their individual attorneys represent them in court. Therefore, the court will require that lead plaintiff’s attorneys be specifically named when a class action is certified.
o The definition of class members: the people who will be included as class members must be defined to ensure that class members have similar issues and a class action lawsuit will be appropriate to satisfy potential claims.
· Members of the class are notified: Once a class action has been certified, the potential members of the class must be notified. Most courts require that notification be provided in writing if the addresses of potential class members are ascertainable. For example, if the class action is against a drug manufacturer then it could be possible to gather addresses from pharmaceutical records. Additionally, many class action lawsuits are publicized online, in newspapers, and via other forms of media to ensure that all appropriate class members have the opportunity to be included.
· Class actions typically settle: most class action lawsuits settle before going to trial. However, before a settlement can be reached notice must be provided to class members, and if the proposed settlement would be binding on class members, the court must have a hearing to determine if the settlement is fair, reasonable and adequate. A settlement must describe how the compensation provided by the defendant(s) is going to be distributed among the class members. Compensation may include monetary compensation, rebates, or free products and services. Each class member must be notified of the settlement and of what he or she must do to receive his or her part of the settlement.
· The payout must be administered: the court will oversee the payout administration. Often not all class members take advantage of the settlement that is offered. If not all of the class members exercise their rights then unused funds may remain with the defendant(s).
The procedures described above have been created to protect the unique rights of class members who may be bound by a court’s decision without ever taking part in litigation and to ensure that fair compensation is provided to all class members.
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