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The publisher and the author give no legal or other professional advice by this publication and disclaim any liability, loss or damages, which may arise from the use of the information stated herein. No attorney-client relationship shall be established by this publication.

  • Boris Parad

Class Action Suits: One Wrong, Many Victims

A class (multi-party) suit joining all victims suffered from one com­mon wrong in one legal action allows them to equalize and withstand the corporate might of an alleged wrongdoer. The size of the class is not limited. One plaintiff may sue on behalf of the entire class. Plaintiffs may live in different states. Class action causes may affect and arise from conduct of or goods made by any company in any industry. One common wrong could be a defective prod­uct design, breach of warranty, price fixing (same product price being charged by all competing companies), unjustified service charge by a utility company (bank, insurance carrier, lender, etc.), corporation’s fraud on its investors and deceptive advertising.

Class action suits were filed against: motor vehicle produc­ers; food/ beverage and personal care makers claiming “natural” (not synthetic or artificial) ingredients or superiority over com­peting products; banks for making automated collection calls to millions of cell phone owners; pharmaceutical companies for not disclosing known-to-them drugs’ side effects and links to fatal, newborns’ deforming, or irreversible health damages; mak­ers of asbestos products causing lung cancer; manufacturers of metal-on-metal hip implants linked to cancer, cardiomyopathy (degenerative heart disease), loss of bone strength, implant sur­rounding tissue death, metallosis (metal cobalt / chromium poi­soning), etc.

One-suit common-claim aggregation (1) avoids repetition of the same trials, witnesses, exhibits, and standard-setting conflict­ing court decisions, and thus lowers the litigation cost; (2) effi­ciently resolves the issue of solo action’s prohibitively expensive costs and small recovery; and (3) assures equitable distribution to all members and not only to the named/ leading class represen­tatives as may happen in a limited recovery cases. Leading plain­tiffs (who initiate the lawsuit) bear the burden of litigation (testi­fying at depositions and hearings, answering discovery requests, traveling for court proceedings, exposing personal life details, etc.) receive higher share of recovery than other class members. Each member receives a percentage of a lawsuit recovery or a fixed amount per judge-approved plan of distribution. Reme­dies include actual damages, treble damages, and activity-stop­ping injunction. The bigger the class of plaintiffs, the bigger the damages sought in the lawsuit and respective awards or settle­ments, e.g., $3.2 billion to women who received defective breast implants; $50 million for 36,000 women who were using the Nor­plant contraceptive; $4.8 billion for consumers who bought fen-phen, which led to heart valve damage.

Mass tort lawsuits arise from a colossal accident*, such as a train collision or airplane crash, or toxic spill causing wrongful death or serious personal injuries to many people. Mass torts, resulting in high damage and respective awards to the injured individu­als and their survivors (in wrongful death and survival actions), may or may not be subject to class action lawsuits. For instance, a smokers’ nationwide suit against tobacco manufacturers would not be common fact-wise for smokers having different lifestyles, medical history, and health conditions.

A state or federal court where the case is filed determines if a case can proceed as a class action case based on its findings that: (1) the class members are too numerous to join them in the action; (2) their claims share common questions of law or fact; (3) class representatives’ claims are typical for other members; (4) these representatives will adequately protect the entire class’ interests; (5) separate actions would create the risk of inconsistent or indi­vidual-based dispositive rulings so to impede other members interests’ protection; (6) the alleged wrongdoer actions/ inac­tions are generally applicable to the class and respective injunc­tive or declaratory relief would be appropriate; and (7) common questions of law or fact predominate over member specific ques­tions, so a class action would be superior to other available meth­ods for the dispute resolution.

After fact-finding investigation attorneys file a suit on behalf of one or more claimants and then request the federal court to certify the case as a "class action". If and when the court certifies the “class action”, the court authorizes the parties to send pending liti­gation and proposed settlement notices to all claim-affected class members. Notice/s published via television, printed media and case administrator website disclose the case name, court, nature/ gist of the claim class identification (purchasers, customers, patients, etc.), reasons for settlement (compromise of positions after negotiations, information exchange and a mediator’s assistance), future coverage of acquired defective products, court orders, claim form to be com­pleted, payments to be received to the named plaintiffs, remaining members, and court-appointed attorneys representing the class, available options and deadlines to exercise them. Proposed set­tlement options include: to do nothing and be bound by the case outcome, file a claim if eligible, file an objection with the court but remain in the class, ask for permission to speak in court, or write to a settlement administrator to exclude yourself form the class, i.e. “opt out”. The opt-out deadlines are strictly adhered regardless of the members’ receipt of notices.

If the court does not approve a proposed settlement, then the preliminary approved settlement class will be decertified and indi­vidual plaintiffs’ action will proceed without further notice, and the discussed agreements will have no force. Typically small law firms representing the class action members join together to share the cost, research efforts and time involved in such complex litigation. The court determines whether their fees and costs are reasonable prior to their approval. At times, class members’ benefits may be reduced pro rata if the total number of valid claims exceeds the set­tlement fund amount.

Any person who had suffered as a result of large corporations’ wrongful conduct, unjustified or competitor-fixed price charges, or health damaging products may contact attorneys for free of charge evaluation of claims and become a named/ leading plaintiff (receiv­ing highest compensation share) in potential mass tort or class action suits.

*For example, personal injury and wrongful death lawsuits arising from May 12, 2015, Philadelphia Amtrak train derailment/ crash will seek millions of dollars (not to exceed $200 million in total) in compensation for killed and injured passengers for medical expenses, lost earnings, pain and suffering, loss of normal life, loss of consortium for spouses (marital relationship, love and support) and next-of-kin, and even punitive damages. The suits will uti­lize the NTSB investigation report identifying the cause of the train pre-crash acceleration (human error, mechanical failure, alarm warning of speeding, track condition, automatic brake system engagement, etc.).

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