A class-action lawsuit is when someone brings a legal claim on behalf of a larger group of people—all of whom have the same claim against a common defendant or group of defendants.
The point of class-action lawsuits in California is to prevent repetitive legal actions from bogging down the courts. Another benefit is that they help avoid contradictory outcomes for the same legal issues in different jurisdictions.
Who Would File a Class-Action Lawsuit?
Class-action lawsuits are sometimes the only way for injured plaintiffs to recover compensation for damages that would otherwise be too small to warrant filing an individual lawsuit.
For example, a common type of class-action lawsuit is for consumer rights violations, e.g., for harm caused by defective products, fraudulent marketing, or illegal fees. Now suppose a business knowingly sold defective products for $100 each to a million people.
So a single person’s direct loss is only $100, even though the entire claim is worth a minimum of $100,000,000. It could be worth far more if some of those people suffered additional damages resulting from the defective product.
But for purposes of our example, let’s just assume that each person only stood to recoup their $100 loss. If an individual pursued their singular claim, it would cost more to file the claim than they would recover in compensation.
In such cases, joining a class-action lawsuit together makes litigation more practical and efficient for everyone involved.
How Do California Class-Action Lawsuits Work?
California class-action lawsuits proceed as follows:
- The class representative files a lawsuit on behalf of a class of plaintiffs with similar claims.
- The class representative then moves to certify the case as a class action with the court.
- The court determines whether the claim meets all the criteria for a class-action certification.
- If the court agrees, all of the class members receive notice of the class-action lawsuit and the choice to opt-in or opt-out. People who opt out must file their own individual lawsuits.
- The parties try to negotiate a settlement that works for both sides. If they cannot come to an agreement, the case will go to trial.
- Once there is a settlement or verdict, the class members receive notice about how to make a claim for relief.
Someone whose damages outweigh the losses of the other class members might want to consider filing their own case and opting out of the class action.
Class members who opt-in will likely be unable to file further legal action.
How Are Class-Action Lawsuits Settlements Paid?
California class-action lawsuits are paid and divided according to the settlement agreements. The parties can agree to any terms for payouts, e.g., cash, bill credits, gift cards, etc.
The court usually awards a separate settlement to the lead plaintiffs—i.e., those who file the lawsuit and actually participate in litigation.
Usually, if the plaintiffs prevail, the judge orders the defendants in a class-action lawsuit to pay for plaintiffs’ attorneys’ fees as well.
Contact the Farzam Law Firm
If you were the victim of a company’s wrongful actions, we can help. Please contact us today to discuss your case.