What is a Class Action Lawsuit?
A class action lawsuit is “any civil action filed under Rule 23 of the Federal Rules of Civil Procedure or similar State statute or rule of judicial procedure authorizing an action to be brought by 1 or more representative persons as a class action.” (28 U.S.C. § 1332(d)(1)(B))
The representative persons are known as “class members” defined as the persons (named or unnamed) who fall within the definition of the proposed or certified class in a class action. (28 U.S.C. § 1332(d)(1)(D))
Federal Rules of Civil Procedure Rule 23
“One or more members of a class may sue or be sued as representative parties on behalf of all only if:
(1) the class is so numerous that joinder of all members is impracticable,
(2) there are questions of law or fact common to the class,
(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and
(4) the representative parties will fairly and adequately protect the interests of the class.”
(28 USC § 23(a))
To Sue or to be Sued
Class Action lawsuits are typically Plaintiff actions. The federal law definition states “an action to be brought by”. Bringing a suit is an action typically attributed to a plaintiff implying that the federal law intended for class action lawsuits to be used as a plaintiff’s tool.
Defendant class actions lawsuits, although rare, have been used in courts. Rule 23 states that members of a class “may be sued” authorizing this type of litigation. A defendant class action lawsuit is required to adhere fully to Rule 23 and in particular the guidance for the maintainability of the class action.
“ An action may be maintained as a class action if the prerequisites of subdivision (a) are satisfied, and in addition:
(1) the prosecution of separate actions by or against individual members of the class would create a risk of
(A) inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class, or
(B) adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests; or
(2) the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole; or
(3) the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. The matters pertinent to the findings include: (A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action.” (28 USC § 23(b))
Defendant class actions lawsuits, for now, seem to be limited to relatively smaller clearly defined classes. These lawsuits tend to be best suited for securities, competition claims, and matters of constitutional law.
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