A class action is a lawsuit brought by one or more persons on behalf of a larger group.
In federal court, a class action is governed by Rule 23 of the Federal Rules of Civil Procedure. It is a mass-joinder action, in which a "class" of multiple plaintiffs sues a defendant (or vice versa).
For a class to be certified, the moving party must meet ALL four requirements under Rule 23(a), and at least one of the three requirements under Rule 23(b).
Rule 23(a) Requirements
The four rules which must be met under this section are:
- Numerosity: The number of potential litigants must be sufficient that simply adding them to a single case is not practical.
- Commonality: There is "a common question of law or fact" such that a determination on that question (its truth or falsity) is central to the validity of the claims in one stroke.
- Typicality: This requires that the claims or defenses of the named plaintiff are typical of those of the class.
- Adequacy: This requires that the named plaintiff must fairly and adequately represent the interests of the class members.
Rule 23(b) Requirements
The three rules, of which one must be met, under this section are:
- Prosecuting separate actions by or against individual class members might cause the risk of either 1) inconsistent or varying adjudications with respect to individual class members that would establish inconsistent standards of conduct for the party opposing the class, or 2) adjudications with respect to individual members that would, as a practical matter, would dispose of the interests of other members not party to the suit, or would substantially impair or impede their ability to protect their interests, or
- The party opposing the class has acted, or refused to act, on grounds general to the class as a whole, so that relief is appropriate respecting the class as a whole, or
- The court finds that questions of law or fact common to class members predominate over questions involving individual members (this commonly affects the amount of a settlement to an individual class member), and that a class action is superior to other methods.
Classes are generally very large (often hundreds, if not thousands, of parties are in a class). As such, a plaintiff's class action can result in exceedingly high damages, if the class is victorious. Unscrupulous lawyers often actively seek out a harm so that they can create a "class," and carry it to victory, just to reap a large windfall. This profiteering motive is aided by the fact that defendants, when faced with a class action, have a massive incentive to settle, since the damages coming from a loss can be so high.
Liberal lawyers push for class actions against corporate America, in an effort to push their social agenda, in employment discrimination cases, or the like, often with the ACLU as counsel. However, class action suits are also brought for legitimate reasons.
To ensure that class actions are not abused, before it can begin, a judge must "certify" a class, as a predicate to pretrial motions. Courts are, in varying degrees, recalcitrant and cautious when certifying a class.
Since class actions are so prone to abuse, the Fifth Circuit has paved the way in cutting back on certifying classes.