Class Action Lawsuits

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This subchapter focuses on the litigation of class action lawsuits. The class action suit is a form of complex litigation which is usually brought by experienced attorneys and firms who specialize in class action suits. This subchapter aims to provide an introduction to the basic concept of the class action lawsuit and the requirements for bringing a class action lawsuit.

A group of class action plaintiffs is usually composed of many individuals who are litigating a shared right or injury. For example:

Chris is a 50-year-old coal miner from West Virginia who suffers from emphysema and several other related respiratory illnesses. Dr. Lung, Chris’s long-time physician, confirmed that the cause of Chris’s respiratory illnesses was his prolonged career as a coal miner. In addition, Dr. Lung stated that Chris had a severe and accelerated case of emphysema because the company that Chris worked for, Coal Co., did not implement any of the minimal protection procedures generally used in the coal mining industry. Chris stated that none of the workers were provided with masks or protective gear by the company during his tenure working for Coal Co. When Chris spoke with his co-workers, he found that they also suffered from accelerated respiratory illnesses. Coal Co. stated that protective measures would have been too expensive to implement for its 200 workers.

In the above example, Chris and his fellow coworkers have suffered the same type of injury from a single cause – Coal Co.’s failure to provide a safe working environment by not offering protective gear to its employees. There are numerous types of injuries similar to the one above where a large group of people can be exposed to the same harm created by one party. The recent tobacco lawsuits are an example of this phenomenon. For example:

Paul is a 27-year-old male who has smoked four packs of cigarettes per day since he was 16 years old. Recently, Paul discovered that he was suffering from an advanced form of lung cancer that was attributed to his smoking habit. The cigarettes, manufactured by Big Tobacco, were found to contain additives to increase the addictive nature of product and increase a smoker’s dependency on cigarettes. Similarly, many other cigarette manufacturers had knowingly added the same chemicals to their cigarette products. Paul’s doctor had 20 other patients who had developed the same type of lung cancer attributable to cigarette consumption.

In the above example, Paul and the other smokers had developed lung cancer from a single cause – smoking cigarettes that the cigarette manufacturers produced knowing that they are addictive. There are countless other situations where groups of people are injured and may seek some type of monetary or legal relief from the courts.

Each of the parties identified in the examples above has the ability to bring a lawsuit against the party causing the harm or injury. However, the law also permits each of these parties to seek judicial relief as a member of a larger group through the type of litigation known as class action lawsuits. Class action lawsuits make it more efficient for large numbers of parties to bring a lawsuit as a group. Using the example provided earlier in this chapter, Chris and the coworkers can elect to bring individual lawsuits against Coal Co. Alternatively, they may collectively bring a class action lawsuit against Coal Co. Similarly, Paul can bring a lawsuit against Big Tobacco as an individual plaintiff, or can join with the other injured smokers and bring a class action lawsuit.

Before exploring the different aspects of a class action lawsuit, one way to understand a class action lawsuit is to think of it as a special form of joinder. Joinder, which was explored in an earlier chapter, is a device where multiple parties or claims may be combined into a single lawsuit. Typically the subject matter of the claims is similar, or the parties were involved in the same transaction or event. The basis for a class action lawsuit can also originate from one transaction, such as a plane crash. In such a case, all the victims suffering injuries from the crash may together sue whoever is legally liable for the crash. A class action lawsuit can also stem from similar claims of many parties based on a single action by a defendant, such as an adverse reaction to the ingestion of a pharmaceutical drug.

Distinct from joinder, class action lawsuits require that several factors be met before they are allowed to proceed in the courts. Rule 23 of the Federal Rules of Civil Procedure governs the rules and procedures for bringing a class action lawsuit in federal court. Rule 23 states that four requirements must be established:

1. Numerocity: First, the class must contain many members. However there is no established number. There may be several hundred or as a few as 50. Usually, there must be more than 30 members to establish an adequate class.
2. Commonality: Second, there must be common questions of law or fact among all the plaintiffs' claims. Therefore, the members of the class must be united under the same legal theory (such as negligence) or same transaction or occurrence (e.g., illness contracted from contaminated food on a cruise ship).
3. Typicality: Third, the claims alleged by the plaintiffs who are bringing the class action suit must be typical of those of the other members of the class. In other words, the specific claims made by the people who are actually bringing the suit must be a fair representation of the claims of the other members of the class. In the above example, Chris is suing based on his respiratory illness. If many other members of the class have also suffered from respiratory illnesses and are also seeking relief from Coal Co. based on those illnesses and would have similar claims to relief as does Chris, then Chris would be an appropriate plaintiff to represent the entire class. However, if Chris is alleging an illness that is greater in gravity or scope than all or most of the other members of the class, it would be more appropriate for him to file his own suit separately from that of the class.
4. Adequacy of Representation: Fourth, the class representative must adequately represent the interests of the other class members. In other words, to allow the class action suit to proceed, the court must rule that this plaintiff and the attorneys handling the class action suit are sufficiently competent and have a sufficient interest in the case to fairly represent all the members of the class. A court analyzing this factor will seek to ensure that the class is adequately represented, that the representative’s attorney is competent in handling class action lawsuits, and that there are no conflicts among the class members that would make it unsound to have them be part of the same class in this lawsuit. See Wetzel v. Liberty Mutual Insurance Co., 508 F.2d 239 (3d Cir. 1975).

If an individual could be a member of the class (i.e., he or she suffered the same injuries from the same causes as did the members of the class), but does not want to join the class, that party may elect to "opt out" of (i.e., decide not to participate in) the class action litigation. This individual can proceed against the opposing party in separate litigation. That party does not share in whatever benefit or relief the class is awarded during the course of the litigation, but is also not bound by any settlement or outcome that may occur in the course of the class action litigation. Note that if a party does not opt out of the class action suit, that party will be bound by the outcome of the suit and cannot later bring a separate action against the defendant.

If the class is able to meet the four requirements stated above, then the court may recognize the class and the lawsuit may proceed. If the case is brought in federal court, the general requirements regarding jurisdiction apply. If the class action lawsuit's jurisdiction is based on the diversity of citizenship, the same requirements must be found as in any other federal litigation. Diversity of citizenship must exist between the class representative and the defendant. (Although, there does not need to be diversity of citizenship between the defendant and every person that belongs to the class; only between the defendant and the representative plaintiff.) Therefore, it may be the attorney’s strategy to select the class representative that will preserve diversity of citizenship between the class and the defendant. For example,

Carl, a resident of Canton, Ohio, was properly prescribed an FDA approved prescription drug called Up-Pill, an anti-depressant, by his treating physician. Up-Pill was a brand new pill manufactured by Pill Factories, a company based in Cincinnati, Ohio. Carl had been taking Up-Pill for three months, when he began suffering from dizzy spells and seizures. Carl contacted Larry Lawyer, who researched Up-Pill and Pill Factories in greater depth. Larry discovered that Pill Factories knew of this side effect and failed to disclose it to the federal authorities. Larry also discovered that Bill, a resident of Trenton, New Jersey, Martha, a resident of Lansing, Michigan, and Cynthia, a resident of Cleveland, Ohio, along with countless others, were similarly affected by Up-Pill. Larry wants to file a class action lawsuit in federal court, and to join Carl, Bill, Martha, Cynthia, and 300 other affected individuals in the suit. Larry must decide which of these parties should be selected as the class representative. Whom should Larry select?

In order to bring the class action lawsuit into federal court, Larry must preserve diversity of citizenship between the class and defendant Pill Factories, a company based in Ohio. Diversity of citizenship under federal law exists if the plaintiff and defendant are residents of different states. Under Rule 23, this means that the class representative must be a resident of a different state than the opposing party. In this case, Larry should select either Bill or Martha, neither of whom are from Ohio, to preserve federal jurisdiction. See Supreme Tribe of Ben-Hur v. Cauble, 255 U.S. 356 (1921).

After jurisdiction and class requirements are determined and met, the court must determine the best method of notifying the members of the class about developments relating to the lawsuit. Typically, notification is required by first-class mail to all the known members of the class. There may be more “unknown” members, who may have the same grievances as the class members, and may wish to join the class. Notice is typically published, often in a newspaper or other widely circulated publication, to allow all potential members of the class to be informed of the existence of the class action suit. See Johnson v. General Motors Corp., 598 F.2d 432 (5th Cir. 1979).

The rules regarding settlements involving a class action lawsuit are slightly different from those found in typical civil lawsuits. Traditionally, parties are permitted to settle or end a lawsuit as that party finds appropriate to its needs. In a class action lawsuit, however, there are multiple parties involved, all of whom have a stake in the outcome of the lawsuit. Rule 23 and Constitutional due process requirements mandate that proper notice must be given to all members of the class of the settlement proposal and that the proposal be met with court approval. The court must determine that the settlement is fair and reasonable for all members of the class. This evaluation includes making a determination of what percentage of the class favors accepting the settlement.

As stated earlier, class action lawsuits are complex and highly specialized. The brief overview provided in this chapter is not a complete explanation of class action lawsuits, but is meant to provide an introductory understanding to the topic. As with all other topics in civil procedure, the local rules of the applicable jurisdiction must be consulted.

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