Class Action Requirements
Class actions are affecting an increasing number of businesses. Everything from employment lawsuits, to securities, to consumer fraud are being filed as class actions. Our Chicago class action defense attorneys understand that these types of lawsuits can be extremely intimidating to defendants as they can result in millions of dollars for a fairly small infraction, depending on the size of the class.
Class certification provides plaintiffs with greater leverage in the court system and has a greater likelihood of success at trial. For this reason, as well as the long, costly, and often public nature of litigation, defendants will often attempt to settle a case outside of court once the plaintiffs have attained class certification, but that is usually a last resort.
Ideally, a defendant is able to convince the judge that the class should not be certified in the first place. The requirements for class certification include:
- Numerosity: the class must be large enough to warrant consolidating the claims of the plaintiffs into one action;
- Commonality: the complaints of the members of the class must be similar enough to justify combining them into one lawsuit. If it looks like refusal of class certification might mean that the defendant will be facing multiple lawsuits of the same nature, the judge will usually certify the class, as it is a drain on the court's resources to try multiple lawsuits against the same defendant for the same violation;
- Adequate Representation: all class actions must have a named plaintiff to represent the class. In order to do so, the plaintiff must first prove to the court that her claims are sufficiently similar to the claims of the rest of the class to make her a proper representative. The named plaintiff must also agree to bear the necessary fiduciary responsibility to the rest of the class members.
A defendant can argue that a class does not meet any one of these requirements in order to prevent class certification. Our class action defense lawyers can help Chicago clients explore whether this argument may be valid.
Many companies have tried to prevent class actions by making their customers and employees sign contracts containing arbitration provisions. These clauses require any dispute between the parties to be settled in arbitration. Because arbitration is not equipped to handle class actions, this tactic frequently manages to stop them before they start. If a company chooses to do this, it must be very careful that the arbitration agreement doesn't favor the company too heavily over the individual. A court that finds an arbitration provision to be too one-sided will rule that it is unconscionable and allow the plaintiffs to file a lawsuit as a class action.
In the event that a very large class obtains certification, the plaintiffs may have the option of forcing the case into federal court if the plaintiff and the defendant are in different states. This is a result of the Class Action Fairness Act (CAFA) of 2005, which was implemented to prevent plaintiffs from "forum-shopping" for the state court which would be most sympathetic to the plaintiff's cause. Another aspect of CAFA which can be beneficial to defendants is that it requires a greater level of scrutiny for the procedures of class action settlements and changed some of the rules regarding attorneys' fees. This means a chance for the defendant to pay a smaller settlement.
The Chicago class action defense lawyers at Lubin Austermuehle, P.C. have decades of experience litigating and defending class actions. With offices conveniently located in Oak Brook Terrace and Chicago, Illinois, we have represented clients throughout Illinois, including the Chicago area and DuPage County, as well as Indiana and Wisconsin. To consult with a knowledgeable class action defense attorney in Chicago today, you can contact us online or give us a call at (833) 306-4933.