What is a Class Action

A class-action lawsuit is a legal action filed by a group of people against a single defendant for the same or similar injuries caused by the same product or action. While the individual claim of one plaintiff may be small, the group’s claim makes it worthwhile for a legal team to pursue.

How to Join a Class Action

Unlike a mass tort or personal injury lawsuit, you don’t join a class action. Most are “opt-out” meaning that you are automatically included until you decline to participate. However, there are hourly and wage cases where you will need to opt-in.

If your legal rights are affected by any lawsuit, you will receive notice in the mail. Should there be a settlement, you will need to file a claim. The notice will contain the information on how to file.

If you think you may be a party to a class action, you can check websites like www.consumer-action.org to see current cases and the settlements.

What to Expect from a Class Action?

There are a number of opportunities for people and organizations to object to or appeal a settlement, and the compensation must receive the court’s final approval. Provided there are no further appeals, class members generally receive payment in about six to nine months

While the total settlement amount may be in the millions, the individual settlements can be relatively small depending on the number of people.

Bear in mind, no matter how small the amount, take it, donate it, and write it off your taxes. Any settlement you receive is taxable as income.

How to Find a Class Action Lawyer

Here are some places to help you find an attorney near you:

  • Search online using the terms “class action lawyer” + “your city or state.”
  • LawInfo.com is a website that helps people search for an attorney in their area.
  • In Canada, Consumer Law Group is a nationwide law firm specializing in class action law.

Another way is to research successful lawsuits similar to your issue, then contact the attorneys from those cases.

Frequently Asked Questions About Class Actions

    How will legal fees and disbursements be paid?

    In most cases, the legal fees are paid on a contingency fee basis. That means the legal team only gets paid if they win or there is a settlement.

    There are cases where the legal team requests contributions from class members to cover the cost of such disbursements as expert reports, transcripts, and filing fees. If it happens, the contributions are small but help the chance of success in the lawsuit.

    Must I participate in the class action?

    No, you do not. You have the choice of opting-out, pursuing an individual lawsuit, or doing nothing.

    If you don’t opt-out, you are bound by any decision the court makes in the case. If you do opt-out, and the case wins a settlement, you will not get a share of it.

    Is there a difference between a mass tort and a class action?

    A class action is a lawsuit filed on behalf of many people who have suffered a similar physical or financial harm. A mass tort or multidistrict litigation (MDL) is a group of many individual lawsuits filed in federal district courts across the country.

    A court must certify class actions before it can go to trial, but mass torts do not need certification. The plaintiffs in this type of lawsuit have the same damages. In a mass tort, the person’s injury or loss determines the amount of settlement.

Examples of Famous Class Actions

Here are just a few memorable cases.

  • BP Deepwater Horizon Oil Spill – On April 10, 2010, in the Gulf of Mexico, a fire and explosion aboard an oil platform killed 11 workers and spilled 210 million gallons of oil along miles of beaches. It destroyed fisheries, tourism, and livelihoods. The settlement was $20 billion.
  • Anderson v. Pacific Gas & Electric Co. – The utility company had illegally dumped toxic chemicals for 30 years, poisoning the groundwater of Hinkley, California. In 1996, the settlement was the largest civil award at $333 million. The movie, “Erin Brockovich” played by Sandra Bullock, chronicled the events of this famous case.
  • 1998 Tobacco Master Settlement Agreement – About 45 cigarette manufacturers agreed to pay a minimum of $206 billion, over25 years, to 46 states as compensation for tobacco-related health-care costs.
  • Enron Securities – Once considered one of the most profitable companies in the world, Enron’s false accounting ended up bankrupting the company wiping out savings for thousands of investors. Investors received the largest securities settlement in 2006 of $7.2 billion.

As long as there are unscrupulous businesses, there will always be a need for class-action lawsuits.

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