What is a Class Action?

What is a Class Action?

What is a Class Action?

The phrase “class action” is thrown around by many of our potential clients and throughout the media. Throughout my career as an attorney, I have had the opportunity to represent clients in several types of class actions, and discuss potential class cases with many prospective clients. So what exactly is a class action and what types of cases should be filed as classes? A class action occurs when one or more people, often referred to as the class representatives, sue on behalf of a larger group or “class” of individuals. While each state has its own rule governing class actions, many of the state laws are similar to Rule 23 of the Federal Rules of Civil Procedure. While there are several types of class actions, all class actions have several common characteristics known as numerosity, commonality, typicality and adequacy of representation. First, the class must be so numerous that joining all of the members is impracticable. There is no magic minimum number that creates a class and knowledge of the specific number of people affected is not necessary. Instead, an attorney must only demonstrate that it would be impracticable to join all of the members. The second prong is known as the commonality requirement, which forces the party seeking to create the class to demonstrate that there are questions of law or fact common to the class. The threshold for commonality is not high, and requires only that a resolution of common questions would affect all or a substantial number of the class members. Not every issue in the case must be common to all class members, but the class members must share at least one common issue. The typicality requirement demands that the claims or defenses of the class representatives be typical of the claims or defenses of the class. A party’s claim or defense is typical if it arises from the same event or course of conduct that gave rise to the claims of the other class members. Importantly, Rule 23 only requires that the claims be typical of the other class members, not identical. Furthermore, the adequacy of representation requirement states that a party seeking class action status must demonstrate that the representative parties will fairly and adequately protect the interests of the class. This inquiry tests the qualifications of the proposed attorneys. Moreover, it serves to uncover any conflicts that could exist between the class representatives and proposed class members. The attorneys’ competence and experience will be examined, in addition to focusing on whether the attorneys have the resources to properly investigate and represent the class members. Once these four prongs have been met, the party seeking class action status must still demonstrate that the claims can be classified as one of the three types of class actions set forth in Rule 23(b). Class actions can arise in many different areas of law and from a variety of events, such as investors who have been harmed by fraudulent activities, defective products that damage the individuals who purchase them and dangerous pharmaceutical drugs and devices that cause harm to patients. Permitting claims to be brought as class actions allows individuals who may have only suffered limited damages to take on large companies with far greater resources. Additionally, class actions allow the judicial system to reach one decision, instead of creating the potential for several judges to reach inconsistent results.