A Class Action is a case brought against a company whose actions have damaged a group of people in a similar way. A single person (class proponent) who has been injured may bring a class action on behalf of everyone who has been harmed. It is common, however, after the action has been started for many other injured people to join the class action lawsuit (become class members). If the case results in a successful recovery, (either through settlement or trial) all class members (named plaintiffs) receive their portion of the amount paid by the wrongdoers.

What are some of the reasons class actions are filed?

Typical reasons for class actions include: shareholder class actions, consumer class actions, class actions for employment discrimination. A class action can be filed any time a group of people (or even small businesses) have been similarly injured by wrongdoing.

Most class actions are filed for compensatory (money) damages. Class actions may also be filed to resolve disputes over a "limited fund," where the money available is inadequate to fully compensate all class members. Occasionally, class actions are filed to seek a declaratory judgment. Finally, a class action may seek injunctive relief. For example, a class action may be filed to request the court order the police or authorities to discontinue an unconstitutional practice.

Do class actions yield substantial recoveries?

While the result obtained ultimately depends on the strength of the case, it is a myth that class actions do not yield substantial returns for claimants. For instance, settlements in the American Continental/Lincoln Savings & Loan Securities litigation yielded approximately $250 million, over eighty percent of total damages of $288 million. More recently, Waste Management, Inc. shareholders recovered $220 million, while Informix shareholders won a settlement in excess of $100 million. Strong cases can and do yield strong recoveries.

Can I be bound by a settlement or judgment of a class action?

Yes. If the constitutional and procedural protections required for fairness are met in the underlying action, all absent class members are bound to the judgment or settlement of the case. However, if the action is primarily for compensatory damages, absent class members are entitled to notice and an opportunity to "opt-out" (exclude themselves) from the proceedings. If a person opts-out, he is not bound by any judgment or settlement of the class action. In the event a class action is for declaratory or injunctive relief, notice is not required to bind absent class members and the court may not allow you to opt-out.

Should I hire a lawyer?

Do you feel you have a claim as part of a class action? Are you wondering if you should file a class action or an individual lawsuit? An attorney specializing in class actions can advise you on whether a class action or an individual lawsuit is best for your case. The attorney will also advise you on what steps you need to take to file your class action if that's the best course of action for you. Use the State Lawyers Directory to find a lawyer who specializes in class actions to answer your questions and provide the necessary counsel to help you make an informed decision that's best for your situation.