Tue. May 26th, 2020

What is an example of a class action lawsuit?

3 min read

You’ve probably heard advertisements on television or radio offering you information on class action lawsuits, but have you ever wondered what a class action lawsuit really is, and why it would matter to you?

Is a Class Action Lawsuit Right for You?

A class action lawsuit is a civil lawsuit pursued by one or more plaintiffs on behalf of a larger number of plaintiffs who have a common claim.

What is a Class Action Lawsuit?

When it comes to civil injury law, a class action lawsuit is a lawsuit where a large group of individuals with the same or similar injuries caused by a particular product or action sue the defendant as a group.

Usually the group is represented by what is known as representative plaintiffs, where one or a few plaintiffs will file the suit and represent the group in conducting litigation.

The other potential plaintiffs are able to opt out by not participating in the results, or will be given further instructions on how to receive their share of damages that would be rewarded as a result of the suit.

Why File a Class Action Lawsuit

These particular lawsuits are filed when the number of plaintiffs are too large a number to include in a standard personal injury lawsuit. If a defendant decides to settle a case or takes it to trial and loses, everybody who was injured on behalf of the defendant and part of the lawsuit will receive a percentage of the damages.

If the number of victims of a particular suit is too large and difficult to contact all of such victims, a fund may be set up.

Sometimes the injuries are minor and an individual won’t feel the need to file a suit individually, however, the claims of the class add up when several individuals consolidate their efforts into a class action lawsuit.

There are a number of different examples of class action lawsuits that can be seen, from a securities class action lawsuit to ones based on racial discrimination.

Examples of Class Action Lawsuits

Greed is an unfortunate part of business and the American people have seen some of their biggest companies get caught up in greedy and fraudulent business activities. One example of a securities class action lawsuit was settled in 2005 and involved AOL Time Warner.

AOL Time Warner was involved in the suit brought on by investors in the stock of the company. Investors sued the company for fraud under federal securities law.

The suit alleges that the company was involved in dozens of advertising transactions between the year 1998 and 2002. It is alleged that the transactions gave the appearance that the company was generating revenue when they were actually shifting money back and forth.

It is estimated that the false earnings untruthfully inflated the company’s value by $1.7 billion dollars. The company settled in 2005 for $2.5 billion.

Sometimes pharmaceutical companies will promote a particular drug that has injurious side effects and patients will be prescribed the drugs by their doctors. A class action lawsuit could be filed in these cases.

Class action lawsuits can also be seen when there are accusations of racial or other discrimination in the workplace, or when a neighborhood’s drinking water is contaminated by a toxic spill caused by a particular company.

The process of combining what would be thousands of individual claims into a class action lawsuit is not only efficient, but it allows plaintiffs to seek a particular justice when filing individually would be rather difficult and nearly impossible. If you think you may want to consider being part of a class action lawsuit, contact an attorney who fits the criteria.

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