The Diefenbach firm and its lawyers continually investigate and research, at their own expense, potential class actions against corporations. A class action lawsuit occurs when a large number of individuals brings a lawsuit over the same issue, some of which arise in the context of consumer fraud class actions, federal securities class actions, or antitrust class actions. Turning what would be many separate lawsuits into one case greatly expedites the litigation process.
Class actions fall under Rule 23 of the Federal Rules of Civil Procedure, which governs federal class actions in the United States. Our lawyers investigate class action potential lawsuits, which involve numerous plaintiffs entitled to compensation. As multiple parties emerge in a class action lawsuit, for example over 15 million claimants in the bank fraud case against Bank of America, total settlement amounts and verdict amounts tend to be very large.
Class actions are a powerful mechanism that can help a large group of people affected by a common problem obtain legal redress. For many class actions plaintiffs, filing a lawsuit on their own would be more expensive than the amount of compensation they hope to recover. Thus, class actions can help consumers hold large corporations accountable for unfair or illegal practices.
Sometimes, a class action must include all plaintiffs who may have possibly been affected by a defective product or an unfair practice. These are usually referred to as mandatory class actions. The plaintiffs (or their attorneys) who initiate this type of class action are responsible for notifying as many potential plaintiffs as possible and giving them the opportunity to “opt out” of the class. Unless a plaintiff opts out of a mandatory class action, she cannot bring her own separate lawsuit for the same injury. Mandatory class actions often involve a limited pot of money that has been set aside by the defendant company to compensate plaintiffs for their injuries.
Class actions can arise from a single events that injure many people or from general, ongoing practices that harm many people. A class action can even involve multiple defendants; for example, all of the corporations in an industry could be held jointly liable.
For a group of plaintiffs to be certified as a class in a class action lawsuit, they must meet the following criteria set out in Rule 23:
• Numerous parties
• Common factual and legal issue
• Similar legal claims
• Adequate representation of the class as a whole
The requirements set out in rule 23 have been given a more stringent reading by the Supreme Court in recent years, and the Court’s 2011 decision in Wal-Mart v. Dukes has made it more challenging for plaintiffs to obtain class certification. Wal-Mart v. Dukes was a lawsuit brought by Wal-Mart employees which alleged discriminatory promotional practices within the company. The plaintiffs complained that these practices had a disproportionate negative impact on women.
In its majority opinion, the Court stressed that the plaintiffs did not have the same injuries – that is, each member of the class was affected differently, and their damages would likely be different as well. In addition, the opinion pointed out that the discriminatory decisions were based on decentralized decisions by Wal-Mart managers. That is, there was no one uniform set of policies or decisions that led to the unfair outcomes the plaintiffs faced. The court’s majority opinion has been criticized for looking at the merits of the case, that is, trying to decide the actual case ahead of time. However, Wal-Mart v. Dukes reflects the Supreme Court’s current requirements for the certification of a case.