A "class action" lawsuit is one in which a group of people with the same or similar injuries caused by the same product or action sue the defendant as a group.  Other names for lawsuits brought by a number of people who suffered similar harm or losses are "mass tort litigation" and "multi-district litigation" ("MDL").  People seek justice in class action lawsuits when their injuries have been caused by defective products, including pharmaceutical drugs, motor vehicles and other consumer products, and medical devices.

Other types of conduct over which people have sued as a class include consumer fraud, corporate misconduct, securities fraud, and employment practices.  A type of class action lawsuit is the "mass tort" action.  Mass tort litigation is a multi-party lawsuit based on a massive accident, such as an airplane crash, in which many people are injured or widespread personal injuries caused by a defective product, such as a medical device.

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Opting In: Notice to Potential Class Members

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Every person who would be affected by the court's decision in the class action is entitled to notice that the action has started. Although it usually is not possible to give every such individual personal notice, all persons who might be affected are entitled to the best notice possible.  The court will order that the class representative, through his or her attorneys, make reasonable attempts to notify any unknown class members by general media such as television, an advertisement in a magazine or newspaper, or a posted flyer.  The court will tailor the type of notice required to the particular facts of the case.

Those people who are notified then have the opportunity to join in the action -- called "opting in" -- or to decide not participate as a member of the class -- that is, to "opt out." In some cases, individuals don't have the opportunity to opt out.  That is, if the action been filed over particular injuries caused by a particular defendant, all people who are similarly situated are automatically in the class and must live with the outcome.

Class action cases involve extensive research, even more than in the typical individual lawsuit.  

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Benefits of Class Actions

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The class action lawsuit brings together and disposes of thousands of claims at one time that are impractical to litigate individually, making the process much more efficient.  The judge decides the basic question of who wins with regard to the entire group.  If the defendant wins, the class lawsuit is dismissed and the individuals in the group are prohibited from filing new or individual lawsuits over the same issue against the same defendant. If the class of plaintiffs wins, the court finds the defendant liable for the plaintiffs' injuries, and the amount of recovery is later divided among the plaintiffs.

Because it aggregates small claims, the class action format lowers the often-high cost of litigation.  Also, class actions are usually brought by attorneys who are particularly trained and experienced in litigating and managing complicated lawsuits.  Although class actions require much more work than the typical civil lawsuit, class action attorneys have what it takes to represent the plaintiffs in the class action.

Another benefit of the class action is that it seeks to ensure that all injured plaintiffs receive something.  It may be the case that the defendant is bankrupt or for some other reason cannot afford to pay each individual the full amount necessary to cover his or her losses.

When the class wins the lawsuit, each participant receives some payment, even if it is not an amount to fully cover damages.  Absent a class action, payment by the defendant would be on a first-come, first-served basis.

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Class Action Judgments

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In a class action, the court's decision applies to every participant who has opted into the class.  All individuals who fit within the court's original definition of a class member are bound by the final court decision, even if they never actually go to court or otherwise participate in the lawsuit.

Payment to the participants in the class action usually follows a "plan of distribution."  With the help of the parties and their attorneys, the judge develops the plan to distribute the amount that the plaintiff class won in the lawsuit minus the attorneys' fees and litigation costs.

Each member of the class may receive certain percentage of the total amount fund, or may receive a certain dollar figure.  In some cases, the attorneys seek and obtain permission for an individualized, in-depth review of each participant's claim, so as to tailor the amount awarded to each class member to the "value" of his or her claim.  This method is relatively rare, however, especially in large class actions.

When the parties in a class action lawsuit decide to settle, the presiding judge must approve the settlement, making sure it is fair to all parties.