What is a Class Action lawsuit? 

A class action is a special type of lawsuit in which one or more plaintiffs file suit on their own behalf and on behalf of all other persons who have a similar claim against the defendant.

How does a Class Action lawsuit work? 

A class action is a special type of lawsuit in which one or more plaintiffs file suit on their own behalf and on behalf of all other persons who have a similar claim against the defendant. 

The individuals represented by the lead plaintiff(s) are known as a class of plaintiffs. This type of lawsuit is popular when many individuals suffer the same type of harm by the defendant's conduct. 

Frequently, it involves matters in which no one member of the class has suffered a sufficient loss or harm to justify bringing the lawsuit alone. 

Basically, the damage suffered by one person is not enough to support the expense of litigation. 

Class status allows plaintiffs to aggregate their claims into one trial. It also avoids multiple legal actions involving the same issue. 

It provides advantages to the class of plaintiffs when the cost of litigation high and the issues are complex. 

What are the requirements for a Class Action?

The requirements for a plaintiff to bring a class action against a defendant are as follows: 

What does it mean to Certify the Class? 

The primary hurdle for the plaintiff is to certify all potential plaintiffs as a class. To certify a class, the plaintiff(s) must present evidence of the following:

• Numerosity - The class is so numerous that joinder of class members in a trial outside of a class action is impracticable;
• Commonality - There must be questions of law or fact common to the class;
• Typicality - The claims (harms suffered) or defenses of the class representatives are typical of those of the class;

Other Requirements to Certify the Class?

The class representatives will "Fairly and Adequately Protect the Interests of the Class"; and

Any of the following:

• Risk of Inconsistency - Hearing separate actions risks either inconsistent adjudications and standards or any one action would be dispositive of cases by other parties;
• Defendants Obstinance - The defendant fails to act on any grounds or causes of actions by the defendants.

Example: One example is Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541 (2011)). In this case the nationwide class of 1.5 million women alleging discrimination in pay and promotions by the largest private employer. The plaintiff failed to satisfy commonality prerequisite for class action certification.

• Note: Denying the class does not give rise to immediate appeal. The case must be tried to a result first. This procedural requirement places a significant hurdle in the way of individuals trying to get certified as a class.

What is the Notice to Opt-Out? 

 Once certified, the lead plaintiff must give notice of the litigation to all prospective members of the class who can be found through reasonable efforts. 

Once identified, the prospective members are then given the option of opting out of the litigation. 

Opting out means that they will not be included in the class of plaintiffs. 

In most cases, this reserves the ability of the potential class member to bring her own legal action against the defendant. 

What pays the Cost of Litigation in a Class Action? 

The lead plaintiffs in the class action must generally pay all of the costs associated with bringing the suit. 

This includes the heavy fee associated with notifying all potential class members. 

This makes it prohibitively expensive for one individual or a small group of plaintiffs to serve as plaintiffs for the class. 

Aggregating the claims among a group of lead plaintiffs, however, makes the action more affordable. 

Further, if the class action is successful, the plaintiffs paying the cost of litigation may recoup those expenses from any judgment rendered. 

What are Class Actions in State or Federal Court? 

Plaintiffs may be able to bring a class action in state or federal court. 

State class-action suits must demonstrate the court's subject-matter jurisdiction over the case and personal jurisdiction over the defendants. 

For the court to have subject-matter jurisdiction over the class action, a cause of action claimed against the defendants (such as fraud) must arise under state law. 

The court has personal jurisdiction over all defendants when they all have minimum contacts with the state. 

Issues arise when there are multiple defendants from different states and they have very little contact with the state of litigation. 

A class action in federal court avoids the issue of personal jurisdiction, but the plaintiffs must still demonstrate that the court has subject-matter jurisdiction. 

If the parties are not suing the defendant based upon a federal law, then there must be diversity between the plaintiffs and defendants. 

Generally, two federal statutes allow for class actions involving complete diversity and minimum diversity. 

What is Complete Diversity in a Class Action? 

This requires that all plaintiffs be from different states than all defendants. 

This is difficult to achieve when the plaintiff class is very large and some class members are located in the same state as the defendant. 

What is Minimum Diversity in a Class Action? 

This allows for the diversity action in federal court when only one plaintiff is diverse from one defendant. 

In both complete and minimum diversity situations, the amount in controversy must be at least $75K. 

In some situations, all claims can be aggregated to meet the $75K amount. 

In other situations, a single plaintiff must have a claim of $75K in order to meet the statutory amount in controversy requirement. 

Related Topics

• Civil Litigation Procedure (Intro)
• What is a civil lawsuit or civil action?
• Who are the parties to a lawsuit?
• What is standing to sue?
• Venue
• What is personal jurisdiction?
• What is a class action?
• What are the pleadings?
• What is discovery?
• What is the scope of discovery?
• What are motions and how are they used?
• What are frivolous cases?
• Barratry
• What is the process of selecting a jury?
• What are the steps involved in a civil trial?
• What is the burden of proof in a civil trial?
• How is a civil trial decided?
• Adjudication
• Default Judgment
• Stipulated Judgment
• Equitable Defenses
• Equitable Relief
• Doctrine of Clean Hands
• Compensatory Damages
• Punitive Damages
• Replevin
• What is joint and several liability?
• Judgment Proof
• What is the process for appeal?
• Amicus Curiae Brief
• How do parties enforce a civil judgment?
• Levy
• Garnishment
• Writ of Attachment
• Writ of Execution
• Writ of Seizure and Sale
• Sheriff's Sale
• What is res judicata