What Is a Class Action Lawsuit?

A class action lawsuit is one where numerous people were harmed or misled by a common practice or misrepresentation and are able to litigate those claims collectively in a single lawsuit brought by one or more “representative” plaintiffs. These cases most often involve only economic or financial damages – they are not well suited to cases involving physical injuries. They often, but not always, involve relatively small losses for each individual plaintiff that nonetheless add up to big profits for the offending company.

For example:

  • A bank might charge its customers overdraft fees that violate banking law or the terms of the bank’s contract with consumers. While individual customers probably could not afford to sue the bank for $35 or even $350, a class action brought on behalf of all customers harmed by the unlawful practice can recover millions, which is then returned to the customers who were harmed.
  • A company might claim that its products were “Made in the USA” when they were not. Some customers will be seriously aggrieved by this, but can’t afford to sue over a single product. Again, the class action device can force the company to compensate the customers they misled.
  • Class actions are often brought on behalf of all shareholders in a public corporation if that corporation lies or makes material misrepresentations regarding the future of the company that prove not to be true and hurt the company’s stock price.
  • Employees who are not paid overtime or who are subject to other violations of state or federal labor law will often file a collective action against their employer to recover those lost wages and other damages.

Class actions are an important mechanism for holding companies accountable for violating the rights of consumers. The class action attorneys at Spangenberg Shibley & Liber LLP have experience representing clients in a wide variety of class action litigation in courts across the country. We know the tricks corporations often employ in attempt to evade liability for their wrongful actions, and we know how to counteract them. If you have a matter you believe could serve as the basis for a class action, please contact our firm today.