Invenstment Dictionary :
An action where an individual represents a group in a court claim. The judgment from the suit is for all the members of the group (class).
Investopedia Says:
This is often done when shareholders launch a lawsuit, mainly because it would be too expensive for each individual shareholder to launch their own law suit.
Business Dictionary :
A Suit brought by one or more members of a large group of persons on behalf of all members of the group. If the court permits the class action, all members must receive notice of the action and must be given an opportunity to exclude themselves. Members who do not exclude themselves are bound by the Judgment, whether favorable or not.
US Supreme Court :
The class action has developed in the twentieth century as a way of managing complex, multiparty litigation. It may be traced to the “bill of peace,” a proceeding that originated in England's equity courts in the seventeenth century. The bill of peace was used when the parties to a dispute were too numerous to be easily managed and when all parties shared a common interest in the issues. It permitted the case to be tried by representative parties, with the judgment rendered binding all. This was more efficient than trying each case individually and was more consistent with equity's goal of doing complete justice (see Injunctions and Equitable Remedies).
American courts continued to use the bill of peace. Its most eloquent spokesman was Justice Joseph Story. In his Equity Jurisprudence (1836) and his Equity Pleadings (1838), Story stated that the purpose of the bill of peace was to promote finality. Law courts could only try issues between the plaintiff and the defendant in a particular case. Equity courts possessed a “power to bring all the parties before them, … at once to proceed to the ascertainment of the general right, … and then to make a decree finally binding upon all the parties.” The bill of peace provided a way to resolve multiparty disputes quickly and effectively.
The effectiveness of the bill of peace and the class action that evolved from it was limited in two ways. First, the procedure applied only in equity cases. To remedy that, it was broadened in 1938 by adoption of rule 23 of the Federal Rules of Civil Procedure to include all cases in law as well as equity. Second, some doubt was expressed in early federal cases whether a judgment could bind unnamed parties. This uncertainty remained until 1966, when rule 23 was amended to make it clear that unnamed parties were bound.
Modern rules have defined three kinds of class actions. The first is appropriate where separate litigation might adversely affect members of the class or the defendant in one of two ways. First, the defendant might have inconsistent standards of conduct imposed in piecemeal litigation. Second, multiple suits might “impair or impede” the class members (usually plaintiffs) from protecting their various interests. In the second kind of class action, a class seeks an injunction or some form of declaratory relief. In the third category, a class action is available where questions common to the class predominate over questions peculiar to each plaintiff, and a class action is superior to other proceedings as a means of resolving the controversy among the parties. For this third variety of class action only, rule 23 permits individual members of the class to opt out of litigation if they do not wish to be bound by the results of the class action.
Class actions have become commonplace today, especially as a vehicle for social and economic reform. Many of the leading civil rights cases, for example, were commenced by class action. The class action is also used to promote consumer protection. It is frequently used in antitrust cases and to combat consumer fraud, price fixing, and other commercial abuses. It is also widely utilized in mass tort cases, where numerous plaintiffs are injured at the hands of a single defendant. The Dalkon Shield, Agent Orange, and asbestos cases are prominent examples.
Bibliography
* Stephen Yeazell, From Medieval Group Litigation to the Modern Class Action (1987)
— James B. Stoneking
Taken From Wikipedia :
In law, a class action or a representative action is a form of lawsuit where a large group of people collectively bring a claim to court. This form of collective lawsuit originated in the United States and is still predominately a US phenomenon, at least the US variant of it. However, in several European countries with civil law (as opposed to the English common law principle, which is used by US courts), changes have in recent years been made that allow consumer organizations to bring claims on behalf of large groups of consumers.
Law Encyclopedia :
A lawsuit that allows a large number of people with a common interest in a matter to sue or be sued as a group.
The class action suit began in the equity courts of seventeenth-century England as a bill of peace. English courts would allow a bill of peace to be heard if the number of litigants was so large that joining their claims in a lawsuit was not possible or practical; the members of the group possessed a joint interest in the question to be adjudicated; and the parties named in the suit could adequately represent the interests of persons who were absent from the action but whose rights would be affected by the outcome. If a court allowed a bill of peace to proceed, the judgment that resulted would bind all members of the group.
Justice Joseph Story, who served on the U.S. Supreme Court from 1811 to 1845, advocated the development of the bill of peace in the United States. He wrote that in equity courts, "all persons materially interested, either as plaintiffs or defendants in the subject matter of a bill ought to be made parties to the suit, however numerous they may be," so that the court could "make a complete decree between the parties [and] prevent future litigation by taking away the necessity of a multiplicity of suits" (West v. Randall, 29 F. Cas. 718, 2 (C.C.R.I. Mason) 181 [1820] [No. 17, 424]). The bill of peace, and later the class action, provided a convenient and efficient vehicle for resolving legal disputes affecting a number of parties with similar claims. Common issues that could have similar outcomes did not have to be tried piecemeal in separate actions, thus saving the courts and the litigants time and money.
Initially, a class action could be brought only in equity cases, disputes in which the parties did not necessarily seek monetary damages but instead might desire some other type of relief. The adoption of rule 23 of the Federal Rules of civil procedure in 1938 broadened the scope of the class action suit, providing that cases in law seeking money damages as well as cases in equity could be brought as class actions. In 1966, the scope of the class action was again clarified and expanded when rule 23 was amended to provide that unnamed parties to a class action were bound by the final judgment in the action so long as their interests were adequately represented.
Rule 23 of the Federal Rules of Civil Procedure defines three kinds of class actions. The first type may be brought where separate lawsuits might adversely affect other members of the class or the defendant in either of two ways — if the piecemeal litigation resulting from separate suits might impose inconsistent standards of conduct on the defendant, or if multiple suits might "impair or impede" the class members from protecting their various interests. In the second type of class action, a class seeks an injunction or some type of relief compelling the defendant either to cease a certain activity or to perform some other type of action. In the third category of class action lawsuit, there are questions of law or fact common to the entire class that predominate over questions peculiar to each individual plaintiff, and a class action suit is a more efficient means to resolve the controversy. Under the third type of class action, individual members of the class may "opt out" of the litigation if they do not want to be bound by the results of the suit. Courts have held that due process requires that absent class members be given adequate notice, adequate representation, and adequate opportunity to opt out, before they can be bound by a final judgment in the suit (Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 105 S. Ct. 2965, 86 L. Ed. 2d 628 [1985]).
Class action suits have often led to significant social reforms. Such suits have been brought, usually in federal court, on behalf of a class of plaintiffs against federal, state, and local officials to end discriminatory activities, enforce civil rights laws, or ensure due process. The landmark decision Goldberg v. Kelly, 397 U.S. 254, 90 S. Ct. 1011, 25 L. Ed. 2d 287 (1970), in which the Supreme Court of the United States held that recipients of public assistance must be given notice and the opportunity for a hearing prior to termination of benefits, was litigated as a class action suit. Class action suits have helped to remedy discrimination based on race and gender and also have been used to address inequities in education, housing, and voting rights laws. Brown v. Board of Education, 347 U.S. 483, 74 S. Ct. 686, 98 L. Ed. 873 (1954), the Supreme Court decision striking down segregated schools, was brought as a class action lawsuit.
The class action suit also has been used in several widely publicized mass tort cases. In these actions, many plaintiffs, often hundreds or even thousands, have alleged injuries suffered as the result of the actions of a single defendant, usually the manufacturer of some product believed to have caused damage. In the mid-1970s, thousands of women brought suit against the manufacturer of the Dalkon Shield, an intrauterine contraceptive device linked to numerous health problems, including sterility. A class action suit was also employed in lawsuits against the manufacturer of the herbicide Agent Orange, a highly toxic defoliant that was used during the Vietnam War and has been linked to cancer and birth defects in Vietnam era veterans and their families. In mid-1995, two major class action suits on behalf of millions of smokers were instituted against several tobacco companies. The plaintiffs hoped to prove that they had become addicted to nicotine and suffered illnesses as a result, and that the defendant tobacco companies concealed their knowledge of the addictive nature of nicotine and the harmful effects of smoking.
Some large companies, anticipating liability for potentially huge damages to be paid in class action suits, file for bankruptcy protection to protect their assets. The pharmaceutical company A. H. Robins Company, the manufacturer of the Dalkon Shield, filed for bankruptcy in 1985 when it was faced with the prospect of paying millions of dollars as a result of class action suits filed against it. In 1995, Dow Corning Corporation, the subject of hundreds of claims resulting from allegedly defective silicone gel breast implants, filed for Chapter 11 bankruptcy protection. Other companies, fearing the financial consequences of possible class action suits arising from certain types of products, have ceased research and development in certain areas altogether. The Upjohn Company, for instance, ceased contraceptive research in 1986
US Government Guide :
A lawsuit brought to court by one or more individuals on behalf of a category, or class, of people is called a class action. This type of lawsuit is used when there is a very large number of parties to a dispute who have common interests and stakes in the outcome. In a class action, the case is tried by one or a few parties who represent many others, and the judgment in the case is binding on all members of the class involved in the dispute. Many cases dealing with the civil rights of African Americans were class actions.
Rabu, 15 April 2009
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