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What is a Class Action Law Suit? |
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A "class action" is a civil suit brought by one or more
people on behalf of themselves and others who are similarly
situated. In other words, the others are in a substantially
similar circumstance where the common issues are the most
critical to the lawsuit. For example, if a large number of
consumers is injured as a result of an allegedly defective
product, the principal issue will be whether the product
caused the injury. Some examples of class actions are those
brought against the manufacturers of allegedly defective or
hazardous products, such as asbestos, certain vaccines,
Agent Orange, tobacco, and breast implants. Only then will
the question of how badly each party was injured be heard.
Class actions may also be brought on contracts. For example,
all customers of America Online could claim damages when it
went to its $19.95 per month rate - with inadequate capacity
to handle the increased traffic.
Another frequent field for class actions is securities
claims. For example, suppose a company issues an allegedly
false press release and the stock goes from $10 to $15 but
when the truth comes out the stock falls to $6 per share. A
class action could be brought on behalf of all the
stockholders who purchased shares after the company issued
deceptive news and before the truth came out. Each member of
the class allegedly suffered some harm as a result of the
alleged wrong. The damages each member of the class will
vary - someone who bought 1,000 shares at $15 each would be
10 times more impacted than a person who bought 100 shares
at $15 – but the critical issue is whether the press release
was deceptive, and that is common to all class members.
Typical class actions involve hundreds, thousands or
millions of people who have comparable claims. Class action
"certification" permits all claims to be heard in a single
trial.
Referenced
from: www.wikipedia.com |
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