What is a Class Action?
- “A lawsuit in which the court authorizes a single person or a small group of people to represent the interests of a larger group”(Black’s Law Dictionary 8th ed.)
Why Are Class Actions Useful?
- “Class Actions are often the only way to hold corporations accountable when they break the law and harm their consumers.” (Gupta, 2010).
- Class actions are “a device for vindicating claims which, taken individually, are too small to justify legal action but which are of significant size if taken as a group.” Leardi v. Brown, 394 Mass. 151, 164, H. Newberg, Class Actions Section 1010.5(c), 1977.
What is a Class Representative?
- The terms “Class Representative” and “Named Plaintiff” are interchangeable – both describe the person whose name is listed on a class action lawsuit. The Class Representative is standing up for a group of people who have suffered the same harm.
Standing up for What is Right
- If you have been harmed by a company, think of how many others also have been injured by the same unethical business practice. At one end of the spectrum, maybe a bad medicine made you seriously ill, or caused a birth defect to your child. At the other end of the spectrum, maybe you were charged ten cents over the price advertised. Whatever the case, a business practice that has affected you in a negative way has likely affected many others also.
- If you are thinking of being a named plaintiff and wondering “what’s in it for me?,” there are both tangible and intangible benefits. First, and most obviously, without a plaintiff, there can be no class action. When a person elects to become a class representative in a lawsuit against an unethical corporation, they undertake an important public service. By bringing to light a harmful business practice, they raise awareness about and inspire others to join them. In this way, that first courageous named plaintiff gives voice to dozens or even thousands of people who have been wronged. Therefore, because of the contribution of the named plaintiff, an injustice or series of injustices can be corrected.
- Corporate wrongdoers often count on no one taking the time and effort to expose them. For this reason, in many instances, one class representative can make a tremendous difference that benefits a large group of people.
- Class actions frequently have a ripple effect. They usually send a message to other corporations within an industry to change their practices before they end up in court also.
- Finally, in instances where our government refuses to crack down on unfair and deceptive business practices, class action lawsuits are sometimes the only way to create change.
- Generally, named plaintiffs receive no more than the other members of the class. However, sometimes there are court-approved “incentive awards.” According to an excerpt from the National Association of Consumer Advocates, Class Action Guidelines:
- “Most recent decisions…have approved the incentive award payments to named plaintiffs in recognition of their efforts in achieving the results obtained. Many cases note the obvious public policy reasons for encouraging individuals with small personal stakes to serve as class plaintiffs in meritorious cases….The amounts awarded in reported cases vary widely from token payments to amounts in the tens or—rarely—even hundreds of thousands of dollars. See e.g., Fears v. Wilhelmina Model Agency, Inc., 2005 U.S. Dist. LEXIS 7961, 9-10 (S.D.N.Y. 2005) (approving incentive awards of $25,000 and $15,000; noting cases approving awards as low as $336 and as high as $303, 000 most awards being in the $10,000 to $50,000 range).”
- The named plaintiff in a TCPA class action against AT&T received an incentive award of $10,000.
- The named plaintiffs in the Muscle Milk class action each received $2,500.
What Does a Class Representative Do?
- A class representative has certain basic obligations, such as staying informed about the case, and remaining in contact with class counsel. In a consumer case, a class representative may have to produce a receipt for his or her purchase, if they still have it. If the receipt is lost, it need not be produced. In other words, just because a person didn’t keep a receipt for a defective product, it does not mean they cannot serve as a named plaintiff in a class action.
- The amount of involvement a class representative has in a given case depends on the circumstances. Most class action settle. Some cases settle before Discovery begins. In rare instances, class actions go all the way to trial. A class representative may never spend more than the time it took to initiate the case- i.e. speaking with a lawyer, answering a few questions, and looking at a Complaint before it is filed. Sometimes, a class representative may sit for a deposition (for which he or she will be well-prepared) and/or give testimony in court.
- If there is an incentive award, the amount of inconvenience to the plaintiff throughout the case is generally a factor in the Court’s determination of the appropriate amount of the award.
Who Cannot Lead a Class Action
- Ethical rules forbid lawyers from paying people to become class representatives.
- A person who purchases a product for the sole purpose of bringing a lawsuit cannot be a class representative.