How Do You Certify a Class Action?

In order for cases to become class action lawsuits, they must be certified by a judge. Although anyone may initially file a class action lawsuit, before these cases can continue to court, they must be certified. The process to certify a class action lawsuit requires these cases to meet several requirements.

How Do You Certify a Class Action?

Although the initial filing of a class action lawsuit may simply require filling out the right forms while filing a complaint in court, having a class action lawsuit certified is a less straightforward process. Class action certification requirements may vary from state to state, but usually follow the same general guidelines.

In order to certify a class action, the lead plaintiff in the case must prove several key points to a judge. First, the lead plaintiff must show that they have suffered from harm or injuries due to the actions of the defendants in the case, and that it is likely that other people have suffered from the same harm or injuries. Second, the proposed Class of additional Members in the lawsuit must be clearly defined, so that it will be possible to determine who does and does not qualify to join the lawsuit.

At this point, the lead plaintiff may also need to prove that many other people will qualify to join the lawsuit. If it is likely that 21 or fewer people have been harmed in the same way by the same defendant, the suit may be denied certification. However, if 40 or more people are expected to be covered by the potential class, the lawsuit is likely to be certified. Third, the lead plaintiff must demonstrate that they qualify to represent the Class of plaintiffs, and that they will act in the best interests of the Class. The lead plaintiff must prove that their specific and individual experiences are similar enough to represent the claims of the rest of the potential plaintiffs.

In addition to the lead plaintiff proving these points, the judge in charge of determining whether to certify the case is allowed to exercise some discretion in deciding whether the case should become a class action lawsuit.

If the judge decides not to certify the case as a class action, the case will be dismissed. However, if the case is certified as a class action, it can move on to pretrial procedures. Approximately 20 to 40 percent of lawsuits that are filed as class action cases end up being certified as a class action.

What Happens Once the Class Action is Certified?

Once a case has been certified as a class action lawsuit, the potential Class Members in the lawsuit must be notified. If these Members are easily tracked down, they may each be individually notified of their inclusion in the case. If the Class Members are too diverse to be individually notified, advertisements seeking potential plaintiffs may be posted in newspaper ads, on the television, or online. At this point, plaintiffs who do not wish to be included in the class action lawsuit may be able to opt out. Although opting out of the lawsuit means that these plaintiffs will not be entitled to any recovered compensation from the class action case, these people may be able to file their own individual lawsuits against the defendant if they believe they have suffered greater harm than the plaintiffs in the class action case. Plaintiffs who do not opt out of the class action will be unable to file future lawsuits against the defendant if they are unhappy with the results of the class action.

After the case is certified, the judge will work with the plaintiffs’ attorneys to develop a plan for the distribution of any monetary damages recovered by the case. As most class action attorneys work on a contingent basis, they do not cost money up front. Instead, these attorneys are paid an agreed upon percentage of any recovered winnings. The rest of the financial award will be distributed to the lead plaintiff and the Class Members. Often, the lead plaintiff will be given an additional incentive award, due to their higher level of involvement in the case than the rest of the Class Members.

What Happens if a Class Action Lawsuit Wins?

If a case that was certified as a class action lawsuit wins at trial, or settles with the defendant for a settlement amount or other compensation, Class Members who qualify to be a part of the case may be eligible for a percentage of the awards. In some cases, the potential Class Members may be contacted by the attorneys working on the case in order to notify them of their possible eligibility for compensation. In other cases, if there are too many potential Class Members to contact, or if they are difficult to track down, the compensation recovered by the lawsuit may be deposited into a fund that potential Class Members can apply to for a payout. In these cases, potential plaintiffs must be able to prove that they qualify to be part of the class.

As class action lawsuits often cover hundreds or thousands of people who may have individually been harmed in minor ways, the settlement agreements may be more creative than a simple financial sum. In at least one case involving several department stores that were allegedly artificially inflating cosmetic prices, the stores agreed to give free products to the class action plaintiffs rather than a financial payout.

In other cases involving defective products, some companies may offer coupons to plaintiffs rather than paying out compensation in cash. These coupons may cover a certain percentage or dollar value off the replacement cost of the item, or may be for a free replacement. These kinds of settlements are covered by the Class Action Fairness Act of 2005, and must be investigated and approved by a judge in order to be allowed.