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Class Action

In a class action, a large group of people collectively bring a claim to court.  This form of lawsuit is also called a representative action.  This form of collective lawsuit is very popular in the United States of America.

In United States Federal Courts, class actions are governed by Federal Rules of Civil Procedure Rule 23 and 28 U.S.C.A. § 1332 (d).

Class action lawsuits may be brought in federal court if the claim arises under federal law, or if the claim falls under class action as specified in 28 USCA § 1332 (d).  The federal district courts have original jurisdiction over any civil action where the amount in controversy exceeds $5,000,000 and either

1. any member of a class of plaintiffs is a citizen of a State different from any defendant;

2. any member of a class of plaintiffs is a foreign state or a citizen or subject of a foreign state and any defendant is a citizen of a State; or

3. any member of a class of plaintiffs is a citizen of a State and any defendant is a foreign state or a citizen or subject of a foreign state.[i]  

Though it is possible to have nationwide plaintiff classes, it is necessary that such suits must have a commonality of issues across state lines.  But since the civil laws in various states are significantly different, this turns out to be difficult.  Large class actions brought in federal court frequently are consolidated for pre-trial purposes through the device of multidistrict litigation (MDL).  It is also possible to bring class action lawsuits under state law.

However, it is commonly thought that federal courts are more favorable for defendants and state courts more favorable for plaintiffs.  Therefore most class action cases are filed initially in state court.  The defendant will frequently try to remove the case to federal court.

Class action suit with one or several named plaintiffs are filed on behalf of a proposed class.  It is necessary that to constitute a class action, the class must consist of a group of individuals or business entities that have suffered a common injury or injuries.  Typically these cases result from an action on the part of a business or a particular product defect or policy that applied to all proposed class members in a uniform manner.  After the complaint is filed, the plaintiff must file a motion to have the class certified.  In some cases class certification may require additional discovery in order to determine if the proposed class meets the standard for class certification.

In federal civil procedure law, which has generally been accepted by most states (through adoption of state civil procedure rules paralleling the federal rules), the class action must have certain definite characteristics:

(1) the class must be so large as to make individual suits impractical

(2) there must be legal or factual claims in common

(3) the claims or defenses must be typical of the plaintiffs or defendants, and

(4) the representative parties must adequately protect the interests of the class.

In many cases, the party seeking certification must also show-

(5) that common issues between the class and the defendants will predominate the proceedings, as opposed to individual fact-specific conflicts between class members and the defendants and

(6) that the class action, instead of individual litigation, is a superior vehicle for resolution of the disputes at hand.

Today, many states have adopted rules similar to the Federal Rules of Civil Procedure. However, the laws of some states are not similar to the rules of the Federal Rules of Civil Procedure.   Therefore while California has homegrown civil procedure codes which less closely mirror the federal rules, states, such as Virginia, do not provide for any class actions, while others, such as New York, limit the types of claims that may be brought as class actions.

 [i] § 1332 (d) (2)

Inside Class Action