Class actions are lawsuits where one or more plaintiffs, known as the “class representatives,” bring a lawsuit against one or more defendants on behalf of themselves and all similarly situated persons or entities, known as the “class” or the “class members.”
Although class actions are sometimes looked upon with disfavor, they are an efficient way for numerous class members with similar legal claims against the same defendants to band together and bring a lawsuit without having to incur the time and expense of thousands of separate lawsuits, and risking inconsistent decisions by different courts. In other words, there is strength in numbers.
The key to a successful class action is that the legal claims of the class representatives must be based on facts or law common to themselves and the class members. While the subject matter of a class action can vary widely, (1) defendants must have engaged in a pattern of wrongdoing, (2) the issues in dispute must be common to all class members, and (3) the class members are so numerous or so geographically dispersed that it would be impractical for all of them to individually appear before the same court.
Class actions typically seek to recover money damages for the class representatives and class members. Occasionally, class actions are filed to secure a declaratory judgment—where a judge makes an official statement, such as whether a particular activity is legal or illegal, or interprets a narrow legal issue, such as the terms of a contract. Class actions also are filed to secure injunctive relief, asking the court to order a defendant to do, or stop doing, something.
Attorneys represent class representatives on a contingent fee basis – which means they will advance the expenses to fund the litigation,and receive attorneys’ fees and reimbursement of their expenses only if the litigation is successful. Even then, the court, as the gatekeeper, must decide whether to certify a class action, approve a settlement, approve notices sent to class members regarding class certification or settlement, and determine the amount the attorneys representing the class receive as fees and expense reimbursements. The court, in its discretion, also may award special compensation to the class representatives for stepping up to the plate and bringing the lawsuit.
There are several ways in which to participate in a class action:
Class representative. Class representatives are named plaintiffs who bring the lawsuit on behalf of all similarly situated class members. Class representatives may be individuals or businesses. Depending on the case, there may be one or more class representatives.
Class member. Class members are unnamed plaintiffs in the lawsuit. Class members may be individuals or businesses. There may be hundreds, or even thousands, of class members. In most class actions, after receiving class notice, class members have the option of staying in the class and being bound by the outcome of the case—whether dismissal, judgment, or settlement—or “opting-out”of the class.
Opt-out. If a class member opts-out of the class, he or she is not bound by the outcome of the class action, but rather, is free to hire a lawyer and file a separate lawsuit.
Objector. Objectors are class members who, when presented with a proposed settlement, file a formal objection to it with the court. Class members must remain in the class in order to file an objection. By filing an objection, an Objector has the right to appeal a proposed settlement if the court approves the settlement over the Objector’s objection.
Mass actions. Certain cases involving numerous plaintiffs asserting similar—albeit larger—claims against similar defendants are best litigated in the form of a mass action, rather than a class action. Unlike a class action, a mass action is not a representative action, but a large group of individually named plaintiffs that have banded together to bring their claims.
Class actions are used as a procedural vehicle to bring a variety of cases, including antitrust cases, securities cases, data breach cases, consumer cases, employment and retirement benefits cases, and cases involving defective products—all of which we have litigated.
In re Equifax, Inc. Customer Data Security Breach Litigation; MDL No. 2800 (N.D. Ga.) (class action on behalf of the largest credit union in Florida and other similarly situated financial institutions that incurred damages due to Equifax’s failure to safeguard and protect the sensitive and confidential personal and financial information of over 143 million U.S. consumers).
In re Ford Defective Door Latch Litigation (N.D. Cal.) (class action on behalf of current and former owners and lessees of certain 2011-2016 Ford and Lincoln vehicles with defective door latch assemblies that cause unwarranted “door ajar” warnings and the doors not to lock, thereby depleting the batteries and causing them to run down).
In re The Home Depot, Inc. Customer Data Security Breach Litigation; MDL No. 2583 (N.D. Ga.) (class action on behalf of Firm’s financial institution clients to recover damages and expenses to replace payment cards compromised by a massive data breach) (case settled for over $60 million of cash and other concessions).
Experian Data Breach Litigation (D. Ct., Orange Co., California) (action on behalf of California consumers against Experian Data Corp., Court Ventures, Inc., and U.S. Infosearch.com, LLC for selling or granting access to the confidential and regulated consumer, financial, and personal records and information of hundreds of thousands of California residents to a known identity thief who re-sold them to 1300 other identity thieves in a scheme that lasted several years).
Denson v. LPL Financial, LLC; No. A-199270 (D. Ct. Jefferson County, Tex.) (class action on behalf of consumers whose investment accounts and retirement accounts were churned and mismanaged).
Byers v. Wells Fargo Advisors LLC; No. A-198927; (58th District Court, Jefferson County Texas) (class action on behalf of current and former Wells Fargo financial advisors who were underpaid under the Wells Fargo broker pay out grid, from 2011-2014).
In re Zappos.com, Inc. Customer Data Security Breach Litigation; MDL No. 2357 (D. Nev.) (Co-lead Class Counsel) (data breach litigation in which over 24 million Zappos customers’ personal and account information was disclosed without authorization).
In re TFT-LCD (Flat Panel) Antitrust Litigation; MDL No. 1827 (N.D. Cal.) (price fixing antitrust class action involving liquid crystal display flat panel televisions) (case settled for $1.1 billion).
In re Genetically Modified Rice Litigation; MDL No. 1811 (D. Missouri) (represented over 950 rice farmers in Texas, Louisiana, Mississippi, Arkansas, and Missouri in a mass action against Monsanto for tainting the United States rice crop, and causing a European Union embargo on long grain rice) (case settled for $750 million).
In re Brand-Name Prescription Drug Antitrust Litigation; MDL No. 997 (N.D. Ill.) (co-leadcounsel for 200 pharmacy and grocery companies with over 1100 retail locations that opted-out of the class action in a price fixing case involving brand-name prescription drugs) (over $40 million recovered for clients).