What Is a Class Action Lawsuit?
New Orleans Class Action Lawsuits
Class action lawsuits can be confusing. We’ve put together this brief guide to help explain how class action lawsuits happen in New Orleans.
What Is a Class Action Lawsuit?
A class action lawsuit occurs when a certain number of people who have suffered similar injuries from a product or as a result of an action as a group sue the maker of that product or the individual company or companies whose actions led to their injuries. Class action lawsuit examples include defective products, harmful medications, employment practices and many others.
The group of people who alleged the defendant’s products or actions have harmed them in some way is known as the “class.”
Another name for these kinds of lawsuits is “mass tort litigation” or “multi-district litigation” (MDL).
Why Do Class Action Lawsuits Happen?
A lot of times, the harm suffered by plaintiffs in a class action lawsuit is relatively minor. As a result, it wouldn’t be worth it for each person to take legal action on his or her own. But when the people who have been harmed join together, that can substantially increase the value of their collective claim. A class action occurs when a large group of people has been injured in similar ways. The injuries do not have to be major or life-threatening. However when the number of people affected by this product or action begins to grow, and the value of their claims also grows, using a class action lawsuit consolidates lawyers, evidence, witnesses and other important elements of the litigation.
What Is the Difference Between a Civil Lawsuit and a Class Action Lawsuit?
A civil lawsuit normally involves one plaintiff who makes a personal injury claim against a defendant. A class-action lawsuit, as we noted above, involves a group of people who have suffered similar injuries as a result of a defective product made by the defendant or as a result of an action taken by the defendant.
What Is an Example of a Class-Action Lawsuit
There are a lot of class action lawsuit examples, of course. Here are just a few of them:
- Residents of a housing development suffer property damage due to a toxic spill caused by a negligent company.
- Customers are hurt because of a defective product.
- Corporate investors lose money due to fraud perpetrated by a securities company.
- Patients suffer injury because of a dangerous drug.
- Employees feel they’ve been discriminated against or haven’t been properly paid the overtime wages to which they’re entitled.
These are just a few examples of why people may group together to file a class-action lawsuit. Rather than filing individual lawsuits in these above cases, people group together to take action. This often saves time and money and results in less frustration and delays in pursuing individual lawsuits.
How Many People Do You Need for Class Action Lawsuit?
While there is technically no specific number of people needed to file a class-action lawsuit, most states, like Louisiana, use the same numbers as the federal courts. You need at least 40 people. If you have fewer than 40 people it’s difficult to get the class action certified by a judge, which we will explain below. If you have fewer than 20 people, it is impossible to file a class-action lawsuit as the case would likely be dismissed. All all of those 40 people must have suffered similar injuries caused by the same defendant.
How Do You File a Class-Action Lawsuit?
The first thing to do is to hire an experienced class-action lawsuit attorney in New Orleans because class-action lawsuits can be complex and confusing. The next move is the initial complaint. The initial complaint describes the plaintiff’s case against the defendant. It is a document that identifies all the relevant parties. It may at first only identify one or two other plaintiffs, but this will grow to include others in order to be eligible for certification as a class-action. It identifies the complaints against the defendant and the basis for the complaint in the law. It will also include a request by the plaintiff or plaintiffs for the defendant to pay the appropriate damages.
Class-action lawsuits can be filed under either state or federal law. If the amount of damages being sought is over $5 million, federal courts will have automatic jurisdiction over the case.
The federal courts will also have jurisdiction if any of the following situations are met:
- If one of the plaintiffs in the class action lawsuit is from a different state than any one of the defendants. So if the defendant is from Louisiana but one of the plaintiffs is from Texas, the lawsuit moves to the federal courts.
- If any plaintiff is from a different country, like Mexico or Canada, and any one of the defendants is an American citizen.
- The opposite is also true. If any plaintiff is an American citizen but a defendant is from a different country, the case is moved to federal court.
Certification is actually one of the most important steps during the process of a class-action lawsuit. After the group’s complaint has been filed and the defendant has been served with notice of the filing, a court — either on the state or the federal level — needs to certify the class. In Louisiana, the plaintiff will file the motion for the court to certify the case as a class action lawsuit.
Louisiana uses the following requirements for a judge to certify a case:
- The person or persons known as the representative plaintiff or plaintiffs have suffered the same kind of alleged injuries as the rest of the proposed class.
- It is possible to clearly define the class so that the court will know who is and who is not a member of the class action.
- It is impractical to individually name every person who wishes to join the class action lawsuit — this is where the 40 to 20 rule enters.
- The facts about the proposed class’s alleged injuries are similar in nature.
- The representative plaintiffs’ injuries are so similar to the proposed class’s alleged injuries that only trying the representative plaintiff’s case will cover everybody.
- A class-action lawsuit is the best way for either the plaintiff or the defendant to deal with the allegations that have been made.
In most cases, judges are given a fair amount of discretion to decide whether or not the class should be certified. The proceedings can often be complex and drawn out. This is why it is necessary to use experienced New Orleans class action attorneys if you are considering initiating a class-action lawsuit.
If the class is certified, the lawsuit then progresses to pretrial actions. If the class is not certified, then the entire case will be dismissed. It is important to note that even if the class is certified, this does not mean the judge thinks the defendant is guilty or that a judge or jury in the future will find the defendant liable. It just means that the judge feels there is enough evidence for the case to proceed.
Certifying the class is also important because legitimate settlement talks between the plaintiffs’ attorneys and the defendant will not start until this point has been reached.
How Do You Participate in a Class-Action Lawsuit?
Many times, a law firm that’s handling a class action lawsuit will contact prospective members of the “class,” or the people who may have been harmed by a person or company that is the target of the suit. The court overseeing the case will order that the attorneys representing the “class representative,” or the person who initiated the lawsuit, make a reasonable attempt to notify other potential class members.
If you receive such a notification, you will have two options. You can “opt in” and join the lawsuit or you can “opt out” and not take action. There are, however, some relatively rare instances where an individual won’t be able to opt out.
The majority of class action lawsuits never get to the trial stage because they’re settled out of court. When this happens, the settlement goes to the judge presiding over the case, who will then deny it or approve it. If the settlement is approved, the members of the class will be notified regarding how to make their claim for compensation.
When plaintiffs win, they usually don’t have to pay any lawyers’ fees or other litigation costs. The reason is that the defendant usually has to pay those costs.
What Is the Benefit of Joining a Class-Action Lawsuit?
There are several potential advantages to taking part in a class action lawsuit. Class actions are a lot less expensive than filing individual suits and they are typically initiated by lawyers who have a great deal of experience in this complex type of litigation. If the plaintiffs win, they are all guaranteed to receive some sort of compensation. Otherwise, plaintiffs would only obtain compensation on a first come, first served basis. If they’re at the end of the line, they might not get anything.
So the key benefits of joining a class action lawsuit include:
- Lower legal costs: For the group of 40 or more plaintiffs who launch the lawsuit, the large number of members automatically reduces the legal costs. For the other members of the class who are covered by the lawsuit but not actively participating in it, there are no legal costs whatsoever.
- It makes it easier to seek compensation for relatively small amounts of money: Rather than launching a personal injury lawsuit for a small amount of money, which can be complex, time-consuming and expensive, by joining a class action lawsuit there is a greater chance that a member of the class will receive some form of compensation that no personal cost.
- Safety in numbers: If the defendant had to deal with multiple individual lawsuits, they may not have the financial ability to pay each individual plaintiff if the case is decided against them. This is especially true if you did not file a lawsuit until relatively late in the process. Most of those who file early receive the largest compensation. But in a class action lawsuit, this scenario is not relevant. Each member of the class receives the award at the same time and will be compensated in proportion to their injuries.
- Greater chance to receive compensation for all plaintiffs: Since there is only one judge or jury deciding on just one settlement, rather than a multitude of personal injury cases, the amount awarded to the plaintiffs will be consistent.
- Class-action also benefits the defendant: If plaintiffs file many personal injury lawsuits and there are a multitude of different decisions by numerous judges against the defendant, it’s difficult for the defendant to know how to deal with all the different results. When there is only one judge and one decision, the defendant knows how they must respond and can do so much more quickly.
- Benefits the courts: Since a class-action lawsuit is, once again, decided by a single judge or jury in one court this means less court time overall is used to resolve the issue and frees up other judges to try other cases.
How Are Class Action Settlements Divided?
Once a class action lawsuit has been decided and, if the plaintiffs win, the court will decide how to divide the recovery or award. Attorneys are awarded costs and fees, normally calculated as a percentage of the entire award. The lead plaintiffs receive an amount frequently determined by their participation in the actual trial, while the awarded funds are divided among the remaining class members.
In some cases, the determination of the fees between the lawyer and the lead plaintiffs is decided before the trial begins, but some states have statutory limits on how much the lawyers can be awarded. The court must approve the reasonableness of any fees in a final settlement.
In most cases, a class action administrator is appointed who will work with both the plaintiff and the defendant to ensure proper disposal of any funds awarded in the lawsuit.
To Find out More About Initiating or Joining a Class-Action Lawsuit Contact Irpino, Avin & Hawkins
If you are looking for an independent team of accident and injury lawyers in Louisiana who will work hard to make sure that you receive the compensation you deserve, you should contact Irpino, Avin & Hawkins. We’ve been working since 1996 to protect the rights of those physically injured or financially damaged by the negligent actions of others.
We are also New Orleans’ leading office for class-action lawsuits. Our class action attorneys in New Orleans frequently take part in steering committees of class-action lawsuits. This means that we have a solid reputation for fairness and integrity with our peers. We have the experience to deal with complex MDL class action suits and get the best results for our clients.
Class-action lawsuits can be complicated and time-consuming. It’s important to work with the legal team who knows what it’s doing and has a record of success that you can count on. We have the resources and experience needed to make sure companies that harm people are held accountable for their actions. Come in for a free consultation, visit our contact page or call 800-7500-LAW to learn more.