A class action lawsuit is a legal tool that allows one or more people to sue on behalf of a larger group, called a “class“. This method helps courts handle lawsuits that would be hard to manage if every affected person had to join as a named plaintiff. The case’s outcome applies to all class members, stopping them from filing separate cases, except in rare situations. Class actions can be filed under Rule 23 of the Federal Rules of Civil Procedure or in state courts, depending on the claim’s nature.

Why Class Actions Matter

Class actions lead to decisions or agreements that bind all class members, even those who might not know about the case. Uniquely, a class action can tie someone to its result without them ever getting notice, which goes against usual fair process rules. Because of this, courts must be extra careful to ensure a case can be fairly judged as a class and follow proper steps. This can be tough and expensive, especially with hundreds or thousands of class members.

Class actions do more than just solve the problem of “too many plaintiffs” to handle a case well. They protect defendants from conflicting obligations, look after the interests of absent class members, offer an easy and cost-effective way to resolve similar lawsuits, and help spread lawsuit costs among many people with similar claims. Also, class actions save resources for both courts and parties by allowing an issue that could affect every class member to be handled efficiently.

How It Works

To move forward as a class action in federal court, Rule 23 requires the court to find:

1. There are too many class members to practically join them all in the lawsuit
2. The class members’ claims have common legal or factual questions
3. The proposed class representatives’ claims or defenses are typical of the whole class
4. The proposed class representatives will fairly protect the entire class’s interests

Besides these requirements, the court must also find at least one of these:

1. Separate actions by or against class members might lead to inconsistent rulings, or a ruling for one member could significantly affect others’ ability to protect their interests
2. The party the class is suing has acted in a way that applies to the whole class, making group-wide relief appropriate
3. Common legal or factual questions outweigh individual issues, and a class action is better than other ways to resolve the dispute

Class actions are complex and can be controversial. Critics argue they sometimes benefit lawyers more than class members and can force defendants to settle weak claims. Supporters say they level the playing field between individuals and powerful entities and help enforce laws that might otherwise be ignored.

Recent years have seen efforts to limit class actions. The Class Action Fairness Act of 2005 moved many large class actions to federal court, where rules are often stricter. Some companies now include arbitration clauses in contracts to prevent class actions.

Despite challenges, class actions remain an important part of the U.S. legal system. They have been used in cases involving civil rights, consumer protection, employment discrimination, securities violations, and environmental issues. Famous examples include Brown v. Board of Education, which ended school segregation, and the tobacco industry settlement of the 1990s.

Class actions can have far-reaching effects. A successful case might change a company’s practices, affecting not just class members but future customers too. They can also bring attention to issues, spurring public debate or new laws.