What is a Class Action Lawsuit?

What is a Class Action Lawsuit?

A class action permits one or more persons to file a lawsuit on behalf of others that are in the similar situation. Class actions allow the courts to save their resources by not having to hear individual cases with the same issues and similar facts. Once a case has been filed, the court has to certify the class, if the court grants this certification all eligible persons will be “opted-in” to the lawsuit. If anyone does not want to participate they may “opt-out.”

In some situations where a class action is not available, a similar collective action may be used. Like a class action, a collective action class also has to be certified by the court. The biggest difference between a class and collective action is that with a collective action case, eligible persons need to “opt-in” to be considered for potential relief the court grants. No one is automatically included until they specifically agree to join the lawsuit by “opting-in.” Those who are considered “opt-ins” are also known as class members.

Class and collective action suits make it simpler and more efficient to get a remedy for parties that have been wrongfully harmed. Many collective action suits are filed for violations of the Fair Labor Standards Act (FLSA). The Department of labor estimates that more than 70% of employers violate the FLSA. In these cases when employers violate the FLSA the same way and their employees suffer in the same way, collective action lawsuits are the most effective way to recover unpaid wages for those employees.

Similarly, in cases against a drug manufacturer are often filed as class action. In cases against the pharmaceutical companies, there may be small to large groups of people that were harmed in their use of the drug. Again, filing a class action suit is more efficient and it allows for those participating in the lawsuit to benefit from favorable court decisions without needing to be actively involved in the litigation.

Generally speaking, class and collective action suits make benefiting from favorable court decisions simple for class members. It allows class members to reap benefits of favorable court decisions without having to go through time consuming litigation. Not only are class and collective actions beneficial to the class members, but they are also beneficial to the courts as they allow the court to litigate less cases and save resources. This in turn allows for decisions to be more timely since cases will be looked at as a whole instead of individually.

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