Understanding Class Action Litigation In The US

What defines a class action lawsuit under U.S. law?

A class action lawsuit is a procedural device that allows one or more representative parties to litigate on behalf of a larger group (a "class") whose members share common legal or factual issues. Under U.S. federal law, the defining authority is Rule 23 of the Federal Rules of Civil Procedure (FRCP), which sets the requirements for certification and management. A class action differs from joinder or consolidation because unnamed class members are represented collectively without needing to file individually; the result binds all class members unless they opt out. Class actions are commonly used in contexts involving small individual damages, systemic harms, or widespread consumer or employment injuries, such as antitrust conspiracies, securities fraud, product liability, and wage-and-hour violations.

Fundamentally, class actions resolve claims more efficiently by aggregating them, promoting judicial economy and allowing consistent outcomes rather than repetitive litigation. The Supreme Court describes the mechanism as permitting "an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only." Califano v. Yamasaki, 442 U.S. 682, 700-01 (1979). Congress also codifies class-action-specific rules, including the Class Action Fairness Act of 2005 ("CAFA"), which expands federal jurisdiction over large, multi-state actions.

A federal class action can potentially proceed if: (1) the class is identifiable; (2) named plaintiffs have claims typical of the class; and (3) counsel can adequately represent the group. Once certified, a class action binds absent members, subject to due process protections such as notice and opt-out rights. Ultimately, class actions empower individuals whose claims might be too small to pursue individually.

How Does Rule 23 Govern Class Certification ?

Rule 23 FRCP governs the formation, maintenance, and oversight of class actions in federal courts. Certification, the threshold determining whether a lawsuit proceeds as a class action, is mandatory and lies within the court's discretion. The Supreme Court emphasizes that plaintiffs must "affirmatively demonstrate" compliance with Rule 23. Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011).

Rule 23(a) imposes four prerequisites:

1. Numerosity: The class action must be so large that joinder of all members is impractical.
2. Commonality: There must be questions of law or facts common to the class. There must be proof that common issues generate common answers.
3. Typicality: The representative party's or parties' claims must arise from the same event or practice and be typical of the class.
4. Adequacy: Representatives and counsel must fairly and adequately protect the interests of the class.

After satisfying 23(a), the class must fit one of the categories under Rule 23(b). Most commonly:

1. 23(b)(3) classes, which require (a) that common issues predominate over individual ones and (b) that a class action is superior to other methods of adjudication. Class members must receive the best practicable notice and have an opportunity to opt out.
2. 23(b)(2) classes, which require that the defendant acted on grounds generally applicable to the class. This is often used for civil rights injunctions.

Courts conduct a "rigorous analysis," often requiring factual inquiry into underlying merits. Dukes, 564 U.S. at 351. However, Rule 23 is flexible: the courts may redefine classes, create subclasses under 23(c)(5), or decertify. Rule 23(e) governs settlement approval and notice.

What are the main stages of class action litigation?

Class action litigation generally proceeds through four structured procedural phases:

1. Filings & Pleadings: The named plaintiffs file a complaint alleging class-wide injury. The defendant may move to dismiss under Rule 12(b)(6), challenging legal sufficiency. Cases with federal jurisdiction may be removed under CAFA, 28 U.S.C. §§ 1332(d), 1453.
2. Class Certification: Plaintiffs move for class certification under Rule 23(a) and Rule23(b). Courts undertake a rigorous analysis requiring evidentiary support. Discovery often focuses on commonality, predominance, and damages methodology. Defendants may challenge certification and appeal under Rule 23(f).
3. Merits Discovery & Motion Practice: After certification, discovery expands. Summary judgment under Rule 56 may narrow issues. Certification of merits ruling often influence settlement dynamics.
4. Settlement or Trial: Most class actions settle. Rule 23(e) requires judicial approval of settlements as "fair, reasonable, and adequate," considering adequacy of relief, risks and attorney's fees.

What are the Advantages and Limitations of Pursuing Relief through Class Actions?

Class actions offer substantial benefits when many individuals are harmed by the same conduct. First, aggregation promotes efficiency and access to justice: individual claims that would be economically impractical become viable when litigated collectively. By centralizing litigation, class actions reduce duplicative costs, promote uniformity, and conserve judicial resources. They also incentivize private enforcement, notably in securities cases, where violations are diffused.

While class actions benefit from expanding the litigant pool, they forfeit greater control over litigation strategy, individual remedies, and higher damage recovery per individual member of the class. Class actions often lead to modest per-person remedies while attorneys receive a larger proportion of the settlement.

How Can Miller Shah Can Assist in Class Action Lawsuits?

For years, attorneys at Miller Shah LLP have developed extensive experience in representing consumers and employees in class action lawsuits. Our past involvements span data breaches to wage and hours claims to product defects. Please contact us if you have any concerns regarding potential class action investigations.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.