Traditional personal injury litigation usually involved one or two persons suing one or two defendants. For example, someone who was injured in a car wreck might sue the driver of the other car. But what happens when big companies sell defective products that injure hundreds or thousands of people who use them, or release toxic chemicals that pollute the water of hundreds or thousands of people? Or engage in widespread practices that violate consumer protection laws; discriminate against women, minorities or the elderly; or defraud investors in companies. American law has developed two main approaches for dealing with corporate misconduct which affects large numbers of people in similar ways; class actions and mass actions. These two types of litigation are often confused. Do you know the difference?
In a class action, one or more representative plaintiffs typically bring a single lawsuit on behalf of a large group or class of people who were injured in a similar way. For instance, a class action might be brought on behalf of everyone who was forced to work overtime without being paid by a company that had a company wide policy of doing that. This is known as a plaintiff class action, because the class consists of numerous plaintiffs, but it also possible, but less common, to have defendant class action where the class consists of numerous defendants.
Class actions can be filed in either state or federal courts. State rules governing how class actions are processed are often based on the federal rules of civil procedure but there can be differences so it is important to follow the rules of the court where a class action is filed. For purposes of this discussion, we will consider the rules which govern class actions in federal courts.
Before a case can proceed as a class action, the class must be certified by the court where the case was filed. In deciding whether to certify a case, the court will consider whether there are common issues of law or fact (commonality), whether members of the class are too numerous to be joined (numerosity), whether the claims or defenses of the named plaintiffs or defendants are typical of the class (typicality), and whether the named plaintiffs or defendants will adequately represent their class (adequacy). In class actions where money damages are sought, it is also necessary to show that common issues predominate over individual issues and that a class action is superior to other forms of litigation.
After the class has been certified, the members of the class will be notified of the class action so they can decide whether they want to be part of the class, bring their own lawsuits, or do nothing. In most cases, the members of the class must “opt out” if they do not want to be bound by rulings in the class action. The court will determine what constitutes reasonable notice to the class, some of whose members may not be known or easily located. In many cases, the court will require notices in newspapers or other media such as TV. Any settlement of a class action must be approved by the court, as well as any attorney fees requested by class counsel.
Class actions provide a number of advantages over traditional litigation when many plaintiffs have similar claims, especially if the individual losses are small or the defendant’s resources are limited in comparison to the aggregate value of all potential claims. Here are some of the advantages which have been attributed to class actions:
- Lowering costs of litigation. Savings result for both plaintiffs and defendants when individual parties do not have to litigate the same issues, and incur the same expenses, case by case, over and over again.
- Providing an incentive to bring small claims. Corporate misconduct may affect large numbers of people, but the loss to each person is too small to make it economically feasible for individuals to bring their own separate or individual lawsuits. Someone who was overcharged $50.00, for instance, would have little incentive to bring a lawsuit when the filing fee to start a lawsuit was $200.00, even though the company that overcharged 2,000 people would stand to profit handsomely from its misconduct. Unless the injured plaintiffs can somehow combine their claims, they will never be compensated, and the corporate wrongdoer will seldom, if ever, be forced to answer for its misdeeds. Cases where plaintiffs suffer injuries with a high dollar value such as serious injury or death provide less reason to bring class actions.
- Equitably allocating limited funds. Sometimes the combined value of numerous claims is larger than the assets and insurance a defendant may have to satisfy settlements or judgments against it. This creates the possibility that the first plaintiffs who file lawsuits will exhaust the defendant’s available resources, leaving little or nothing for plaintiffs who file later.
- Avoiding inconsistent rulings by different courts. When numerous cases are filed with several different courts, different judges may issue different rulings on the same issues, and different juries may reach different verdicts, thus exposing the same defendant to incompatible standards of conduct.
In recent years, there have been many mass actions or mass torts. This kind of litigation frequently involves defective prescription drugs such as medicines for heartburn, diabetes, or high blood pressure, medical devices such as knee implants, hip implants, or birth control devices, or dangerous products such as such as asbestos containing materials. James F. Humphreys & Associates, L.C. has represented thousands of asbestos clients in mass trials and consolidations, and we have also been involved in many mass actions involving serious injuries from defective drugs and devices.
In mass actions, instead of a small number of class representatives bringing a single lawsuit on behalf of all similarly situated members of the class, each plaintiff brings his or her own lawsuit, but the many, many lawsuits that are filed are usually consolidated in courts which resolve common issues such as whether the defendant marketed a defective product, was negligent (in other words, failed to exercise reasonable care) or failed to give adequate warnings of known risks.
On the federal level, the JPML (Judicial Panel on Multidistrict Litigation) frequently establishes MDLs (Multidistrict Litigation groups) to handle cases addressing an allegedly defective product like Zantac (an antacid thought to cause cancer) or Truvada (a medicine used to treat HIV/Aids and hepatitis which has been associated with kidney and bone injuries). All of the cases in the MDL are assigned to the same judge, which ensures consistency in rulings. In many MDLs, the presiding judge schedules “bell weather” trials or “test cases” which help to establish the value of potential claims, thereby facilitating settlement. Mass actions are often settled on a “global” basis, where the defendant offers to settle all of the cases at once. But there have also been MDLs where defendants settled cases on an “inventory” basis, that is, each law firm representing plaintiffs in the consolidation settled its own inventory of cases, on its own terms.
States also have mechanisms for consolidating cases when corporate misconduct on a large scale results in large masses of cases asserting similar claims. For example, in West Virginia, the state Supreme Court has created a number of MLP (Mass Litigation Panel) groups to deal with specific areas of litigation like asbestos related personal injuries or coal slurry claims. In many instances, there will be both state and federal consolidations, giving plaintiffs a choice about where to file their cases. State courts in California and New Jersey have frequently conducted mass consolidations under state law which parallel federal MDL consolidations.
It is becoming increasingly common for corporate misconduct to spawn both class actions and mass actions. For example, if a chemical causes certain injuries, there might be a class action asking for money to have exposed people tested periodically to see if they develop those diseases, and mass actions for people who have already developed those diseases. This combined approach allows plaintiffs to benefit from the strengths of each approach to litigation.
Choose Your Counsel Wisely
Class actions and mass actions are complicated proceedings which call for experienced counsel with the resources to fund cases and administer large numbers of claims. Here at James F. Humphreys & Associates, L.C., we have participated in numerous class actions and mass actions with the help of our co-counsel across the country. If you have been seriously injured by the negligence of someone else, please contact us at 304-347-5050 (local) or 877-341-2595 (toll free) for a free
initial consultation. You may also contact us through our website, jfhumphreys.com.