What’s The Big Deal About Big Class Actions?

Class actions allow groups of people to come together in one lawsuit against a common defendant and assert common legal claims.  Class actions are a method of addressing the same legal problem across a group of people rather than doing so through many individual lawsuits.  Class actions are available for personal injury or wrongful death, defective products, employment and labor, consumer fraud, business practices and contract law, or insurance law cases, among many other possibilities.

It seems like some lobbying group is always complaining about class actions.  Trying to reduce the situations when a class action can be brought.  Trying to shuttle all class actions to federal court where they can suffer a slow death.  Trying to get people to agree to contracts that foreclose their right to participate in a class action.  Trying to eliminate the class action vehicle period.

So, given the uproar over class actions, they must be easy moneymaking machines that any lawyer can file and instantly become a multimillionaire, right?  Just find a named plaintiff, slap the words “class action” in the lawsuit caption, file the thing, and have plenty of buckets available to catch the gold coins when they start raining from the sky.  Well, let’s have a reality check for a moment.

The truth is that there’s an entire section of the rules of procedure and an entire body of case law on the books that governs class actions.  Any lawsuit that becomes a class action usually does so after passing through a series of judicial checks and balances to ensure that a class action is truly appropriate.  And, under Iowa law, any district court order certifying a lawsuit as a class action is automatically reviewed by the Iowa Supreme Court.  Even the settlement of a class action, which is when the big bucks are usually made, is strictly monitored by the courts for compliance with the procedural rules and case law I mentioned.  Thus, class actions are not the license to print money that some organizations would have you believe them to be.

What’s often omitted from the discussion is the benefits provided by class actions, such as:  class action lawsuits create strength in numbers; class action lawsuits allow people to be included in the lawsuit who otherwise would not have been able to bring an individual lawsuit;even if they wouldn’t have been able to afford an individual lawsuit; class actions are cost effective for plaintiffs and defendants because both benefit from not having to deal with dozens, hundreds, or thousands of the same claim over and over again; class action lawsuits increase the courts’ efficiency for the same reasons that class actions are cost effective; and class action lawsuits are the great equalizer between the masses and huge corporations with limitless bank accounts to use defending themselves, especially for small claims that otherwise have no chance on an individual basis.


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