How All Three Kinds of Class Actions Work

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Class actions can also be known as class suits or representative actions. These are lawsuits in which one of the sides involved is represented by a member of that same group. Typically, when a plaintiff sues the defendant on behalf of an absent party it will differ from a traditional case. Traditionally, a party sues another party for a wrong and everyone must be present in court. Class actions usually involve a large number of people that have been wronged or injured by the accused party. Instead of making every one of those people appear in court, the class actions clause allows it all to be resolved in one single proceeding instead of hundreds or possibly thousands of smaller ones.

For example, if a large corporation has been charging fees to their clients, it may turn out that those fees were illegal. Depending on how long the company has been charging those fees, the hundreds and thousands of customers that were charged can all be apart of the class action and receive in the settlement without having to appear in court.

The federal court governs any kind of class action as long as the court has the jurisdiction of the case. Federal courts are typically thought of as being more favorable towards the defendants while state courts seem to favor the plaintiffs. Many class actions are first filed in state court but defendants will usually try to move the case into a federal court because of this ‘favor’ issue. They have the ability to remove state cases to federal court if there are damages higher than 5,000,000 dollars in interests and costs.

In order for a class action to legally meet in a court, the lawsuit must meet four different areas of criteria. These are as follow:

  • Numerosity – this means that the size of the class is too big to join the plaintiffs individually.
  • Commonality – The claims are being presenting with common legal and factual issues.
  • Typicality – The claims of the plaintiff are the same as the rest of the class.
  • Adequacy – The plaintiff that has been named can represent all other class members fairly and can advocate on behalf of their best interests.

Once a case has been determined to be a class action, it can then be split into three sub categories. The following findings are what certifies which class the case falls into.

  • If separate lawsuits are filed it could end up with inconsistent rulings or even a ruling that could affect other class member’s capability of pursing their own cases if wanted. This is known as a (b)(1) class.
  • The defendant has acted in such a way that affects everyone else in the class. Because of this, the court could declare relief for the entire group. This is known as a (b)(2) class.
  • The common questions of law make the class action the preferable means of resolving the disagreement or dispute. This one is known as a (b)(3) class.

In order for a class action to be settled past mediation services, the court must give their approval. Notice must be provided to all of the members in the class in order to give them the ability to object if they so desire. In some cases, there needs to be a majority of members that opt out if the proposed settlement doesn’t provide a reasonable recovery. In this case, the court can reject the settlement proposal.

A business can include provisions to their contract with a consumer, it requires them to use the certain procedures like arbitration services to resolve a dispute instead of filing an actual lawsuit against them. However, some states do not allow consumer’s rights to be take away when it comes to filing class actions. They can be prevented from filing a lawsuit or class action if they deem fit.

The way that the common person usually finds out that they are involved in a class action is that the courts will order a notification to be mailed out to the person letting them know the nature of the case. There is usually a website or a mailing address on the notification that the person can fill out if they want to join.

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