In a world where individual voices can be drowned out, class action lawsuits can be a powerful tool for consumers trying to achieve justice. When individuals come together to challenge allegedly unfair business practices or harmful products, they can amplify their voices and try to hold corporations accountable for their actions.
Notable class action successes
The following success stories highlight the potential impact that successful class action litigation can make.
The Tobacco Master Settlement Agreement (1998): One of the most significant class action lawsuits in history, this case involved 51 states and territories that sued major tobacco companies to recover healthcare costs related to smoking, stop deceptive cigarette marketing practices, and to disclose research about smoking and nicotine addiction. The outcome led to a $204 billion settlement that fundamentally altered the tobacco industry and led to stricter regulations regarding marketing.
Enron Securities Fraud Case (2001): Following the collapse of Enron, shareholders initiated a class action lawsuit against the company’s executives for securities fraud. The case resulted in a $7.2 billion settlement, providing restitution for investors and leading to significant reform in corporate governance and financial regulations.
Volkswagen Emissions Scandal (2016): After revelations that Volkswagen had allegedly installed software to cheat emissions tests, the company faced numerous class action lawsuits. In a settlement valued at over $14 billion, affected consumers received compensation, and the automaker committed to invest in electric vehicle technology and environmental initiatives, reshaping industry standards.
The outcomes of these cases extended far beyond compensation for affected individuals. The litigation and resulting settlements served as a catalyst for change in industry practices with the corporations agreeing to adopt new policies that adhere to fair practices and ethical standards.
The class action lawsuit process
The class action lawsuit process involves multiple steps designed to address the claims of a large group of people affected by the same issue. Here’s a breakdown of the typical stages:
- Investigation and Case Evaluation. Attorneys investigate potential cases by assessing the claims and determining if a large group has been similarly affected by the defendant’s alleged actions. This often involves gathering evidence, interviewing witnesses, and analyzing the case’s viability.
- Filing the Complaint. If the case appears strong, attorneys will file a complaint in court on behalf of the lead plaintiffs, or class representatives, outlining the claims against the defendant.
- Class Certification. The court evaluates whether the case can proceed as a class action. To gain certification, plaintiffs must show each of the following:
- A large enough group of affected people (class members),
- Common issues of law or fact,
- The lead plaintiffs’ claims are typical of the class, and
- The lead plaintiffs can adequately represent the class’s interests.
In addition, plaintiffs must also prove that they meet at least one of the requirements below:
- They are at risk of inconsistent judgment. If the cases were tried separately, various courts may reach different conclusions, which could harm those that receive a less favorable outcome.
- The defendant’s actions and/or inactions impacted the entire class.
- The legal or factual issues at the heart of the case are common to all class members, so the outcome should affect everyone in the class similarly.
- Discovery. Both sides exchange information relevant to the case, including documents, emails, and other evidence. Depositions of witnesses, experts, and company representatives may occur to build each side’s case.
- Motions and Pre-Trial Proceedings. During this phase, both sides may file motions to narrow the scope of the case or dismiss certain claims. This can include a motion for summary judgment, which, if granted, could resolve the case, or at least certain parts of the case, before trial.
- Settlement Negotiations. Many class actions are settled out of court before reaching trial. Attorneys from both sides may negotiate a settlement amount to avoid the risks and costs of a trial. If they reach an agreement, the court will carefully review it to ensure it’s fair to the class members. There are several stages of settlement approval, and notice must be sent to class members regarding the settlement so they can determine if they want to be a part of it or object to it.
- Trial. If no settlement is reached, the case goes to trial. Attorneys for the class present evidence and arguments to show that the defendant’s alleged actions may have harmed the class members. If the plaintiffs win, the court may order damages or other remedies for the class.
- Appeal. Either side may appeal the court’s decision if they believe there was a legal error. The appeals process can extend the timeline of the lawsuit.
- Distribution of Settlement or Damages. If the case results in a settlement or court-awarded damages, the funds are distributed among class members. This process may involve notifying class members, verifying eligibility, and disbursing the funds according to the terms of the settlement. If the case has been resolved by the court rather than through settlement, class counsel will receive their attorneys’ fees.
- Final Approval and Closure. For settlements, the court conducts a “fairness hearing” to ensure the terms benefit the class fairly. After approval, the case is officially closed, class members receive their compensation, and class counsel will receive their attorneys’ fees.
Each class action case varies depending on the specific claims and the complexity of the litigation, but these steps outline the general process.
If you believe that you have been wronged by an organization or corporation and wish to try and hold them accountable, we want to know about it. Fill out the form on this page for a free case evaluation.
The law firm responsible for the content of this page is:
LegaFi Law LLC (an Arizona law firm)
888-4-LegaFi
www.legafi.com