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What is a class action

When many different people are affected by similar illegal conduct, one or more of them may choose to bring a single "class action" lawsuit against the parties responsible for the illegal conduct. One or more “class representatives” allege that the same or a similar wrong was inflicted on a “class” of persons. A “class” usually requires 35 or more persons, although fewer have been permitted, sometimes as few as 12.

The wrong may be fraud, a defective product, or a practice that violates applicable law. Examples include a collection letter that violates the Fair Debt Collection Practices Act, standard charges imposed by a bank of financial institution in violation of its contracts or applicable statutes, or a product which fails to conform to material representations made on packaging or in advertising.

A class action is necessary where many people have claims against a business, but the claims are modest, so that bringing a single lawsuit is not economical. A class action allows one person to file a lawsuit as a “class representative,” bringing a claim on behalf of other people who have similar claims. The lawyers will file a motion with the court to allow the case to proceed as a class action.

If the defendant only had to face individual claims, knowing that most aggrieved persons would not file suit, illegal conduct can be profitable. Class actions are important because they insure that the defendant will not profit from illegal conduct.

A person who files a potential class action case typically does not pay anything to the attorneys who seek to represent the class. Rather, the fees are either paid directly by the defendant or are paid out of what the defendant has to pay to the class.

Class actions can be filed in federal court or in most state courts, depending on whether there is federal jurisdiction and other considerations. In either case, the court must authorize the “class representatives” or “named plaintiffs” and their lawyers to proceed on behalf of the “class members.”

If the relief sought is money damages, the class members are given individual notice and an opportunity to “opt out” before being bound to the outcome of the class action. Notice is frequently given by mail. If the defendant communicated with the class members by other means in connection with the violation – email or fax – often that is the best method for giving notice.

In addition, any settlement that binds the class members has to be approved by the court. If the relief is money damages, individual notice of the settlement has to be sent to each class member.

If you believe you have been the victim of such a wrong, you should act as soon as possible to make sure that action is taken within the statute of limitations. Applicable statutes of limitations may be as short as one year or as long as 10 years. Most courts will reward the person who brings a class action with extra compensation for vindicating the rights of the class.

Edelman, Combs, Latturner & Goodwin, LLC has brought hundreds of class action against debt collectors, collection attorneys, mortgage lenders and servicers, junk faxers and telemarketers, manufacturers of defective products, and others.  If you are aware of an issue that you believe might be suitable to pursue as a class action, please call or email.  

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