The expansion also included provisions to allow for multi-state claims in federal court unless two-thirds or more of the members of the proposed plaintiff class, who are the primary defendants, are residents of the state in which the action was originally filed.
In addition existing state class action suits may now be moved to a federal court if the plaintiffs request the state court to decide new class actions across state lines.
Class Action Procedures
Generally, the procedures for filing a class action include having a class action law firm representative file a lawsuit for one or several named plaintiffs on behalf of a specific punitve class. Then a summons and complaint is filed and the plaintiff(s) usually have to bring a motion to a judge to have the class certified. In some jurisdictions, this class certification process may include additional information be provided in order to determine if the proposed class is sufficiently cohesive.
Upon the motion to certify the class, the defendants have the opportunity to object to the action. Often these objections include whether the issues would be appropriately handled as class litigation, whether the named plaintiffs are sufficiently representative of the class, and issues about the relationship the plaintiffs have with the law firm or firms handling the case.
The courts also examine the ability of the law firm to prosecute the claim for the plaintiffs including their resources for dealing with class actions. The court may also request that the law firm post in print, send through the mail and/or broadcast public notices about the class action. The notice procedure is often required to give class members an opportunity to opt out or for any not yet identified members to be included. Identified members that elect to “opt out” have the legal right to file a separate lawsuit.
Once the court certifies the class action, then negotiations with the defendants and their legal representatives can begin. Evidence indicates that the aggregation of claims in class action suits increases the likelihood that the defendant will be found liable and the size of any damages award could be significant. Therefore, many defendants would rather not risk a court verdict that could place them in bankruptcy or create other serious problems for themselves or their company and they negotiate some type of settlement.
In an action certified as a class action, the court may award reasonable attorney fees and nontaxable costs authorized by law or by agreement of the parties as follows:
Motion for Award of Attorney Fees
A claim for an award of attorney fees and nontaxable costs must be made and notice of the motion must be served on all parties, and directed to class members, in a reasonable manner. A class member, or a party from whom payment is sought, may object to the motion. The court will provide final the final resolution of fees on a case by case basis.
Types of Class Actions are Varied and Diverse
Last year, the Class Action Fairness Act of 2005 (CAFA) became law. The primary purposes of the Act was to assure fair and prompt recoveries of legitimate claims, to establish more liberal procedural requirements and to set forth new standards for class action settlements. In general, the class action rule is in effect to improve the legal system’s effectiveness by permitting large groups of people with similar claims to join together into a single lawsuit. These large groups can be comprised of consumers, small businesses or injured people. One or more of the affected then represents the harmed group in court, and if those representatives meet specific criteria, they are granted permission to prove and settle not only their own claims, but also the claims of each individual of the larger affected group as well.
Antitrust actions are typically brought when consumers suffer financial losses because products and services are illegally overpriced. This overpricing can occur due to companies fixing prices at artificial levels to secure higher profits and/or to force out competition, forming agreements that allocate markets or customers among competitors to eliminate or reduce competition and through bid rigging.
Consumer class actions are generally brought when consumers are injured by a company’s systematic and illegal practices. Examples include illegal charges on bills, illegal penalties for late-payments, and failure to comply with consumer protection laws.