Attention, Kentucky students! The lesson for today is on class action lawsuits. Pay close attention to the lecture. There will be a quiz on this material on Friday.

Definition

According to LawInfo.com, a class action is a case that is brought against a company whose actions have damaged a group of people in a similar way. One of the victims—called the class proponent— represents the group in a class action. Other group members may then join the class action lawsuit, thereby becoming class members. Once the case is resolved, either by settlement or by court trial, any monetary award is shared by all of the class members, or plaintiffs.

Types of Class Action Suits and Objectives

Three common types of class action suit are:

  • shareholder class actions;
  • consumer class actions; and
  • employment discrimination class actions.

The objectives of a class action lawsuit are to:

  • obtain monetary compensation;
  • resolve disputes over a limited fund;
  • seek a declaratory judgment; or
  • request an injunction.

How One Joins a Class Action

Once a court determines that there are too many class members for them all to be named in the lawsuit, it certifies a class action. Members don’t really join the lawsuit; they choose not to “opt out.” Rarely are members required to take action to opt in. The notice that is sent to the class members will specify what the member needs to do to participate. If a class member wants to be a named party in the lawsuit, he or she must hire a lawyer and seek to intervene, or participate, in the suit.

Who Is Bound by the Settlement or Judgment

If the constitutional and procedural safeguards for fairness are met, then all class members—even the absent ones— must abide by the settlement or judgment of the class action. If the lawsuit sought mainly monetary damages, though, the court sends absent class members a notice and an opportunity to opt out, or exclude themselves from the proceedings. Opting out removes an individual’s obligation to be bound by the judgment or settlement of the class action. If the class action was undertaken for declaratory or injunctive relief, the court is not required to send notice to absent class members and they may not be allowed to opt out.

How the Attorneys’ Fees Are Paid

Virtually all class action lawsuits are taken on a contingent basis: the lawyers get paid only from any moneys awarded for damages. In this way, even consumers who suffered smaller losses can participate in the suit.

That’s all for today. Class dismissed!

If you believe that you have a legal case in common with other victims, contact the Louisville class action litigation lawyers at Gray and White Law. Call us at 502-210-8942 or toll free at 888-450-4456 and set up a FREE, no-obligation consultation to assess the likelihood of a class action lawsuit in Kentucky.

Matthew L. White
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Founder & Partner of Louisville Personal Injury Law Firm Gray & White Law

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