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Class Action Lawsuits

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Class action lawsuits are a tool for consumers to protect against actions of large corporations that harm a large group or "class" of people. In a class action lawsuit a representative, who proves that it is typical of the "class" that has brought the lawsuit, can prove and settle their own claims as well as the claims of the entire class. Class action lawsuits are brought when a corporation has been found to knowingly sell harmful products, engage in illegal business practices, or use false information to sell products or services to a large group. Employees of large corporations can also use this form of lawsuit to sue for discriminatory practices or violation of employment agreements on a large scale.

Class Action Fairness Act of 2005 Benefits Legal System

Class actions arise when a company's actions harm a large group of people. Lawsuits of this type have been brought against consumer product manufacturers, business and financial services practices, individual employers, pharmaceutical companies, tobacco companies, insurance companies, technology corporations and more. Even shareholders of companies use class actions to hold executives accountable for poor management or misleading investment information.

Class action lawsuits are an important and valuable part of the legal system. They provide for the fair and efficient resolution of legitimate claims of numerous parties, as claims can be aggregated into a single action against a defendant that has allegedly caused harm. This group of individuals, or, in some cases, companies, must first be granted "class status" before proceedings can begin.

Federal law, which has generally been accepted by most states, indicates that for this status to be granted the class action must have certain definite characteristics:

• The class must be so large as to make individual suits impractical
• There must be legal or factual claims in common
• The claims or defenses must be typical of the plaintiffs or defendants
• The representative parties must adequately protect the interests of the class

Additionally, a judge can grant class action status if the class includes additional plaintiffs harmed in the same way by the same defendant or if there is sufficient evidence of a "class" in a pending suit.

Generally, class action lawsuits may be brought in federal court if the case involves issues that affect potential class members in different states or has a nexus with federal law. However, such class action suits must have a commonality of issues across state lines. This can be difficult, as civil law in different states has significant variations. Therefore, each state's set of claims may have to be handled separately or through the device of multi-district litigation. It is possible to bring class action lawsuits under state law, and in some cases the court may extend its jurisdiction to all the members of the class both within the state and without as the key element is the jurisdiction that the court has over the defendant.

Last year the Class Action Fairness Act of 2005 became law. One of the main purposes of the Act was to assure fair and prompt recoveries of legitimate claims. The Act also expanded diversity jurisdiction to grant federal courts original jurisdiction over certain mass actions and class actions when the class of plaintiffs consists of at least 100 members, the value of the claims of all plaintiffs combined exceeds $5 million and at least one of the plaintiffs is a resident of a different state from that of any defendant.

Read more on class action lawsuits

View the Class Action Law Articles page here

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