Class action lawsuits are a common form of litigation in the United States. They allow a large group of similarly situated plaintiffs to file a lawsuit on behalf of the entire class.

One key advantage of class action lawsuits is the cost and time efficiency. Class actions can provide a group remedy while avoiding the delay of multiple separate lawsuits. Plaintiffs acting as a class have more bargaining power, which is particularly important when individual monetary claims are of low value. On the flipside, class action litigation can be complex to coordinate among multiple parties and claims. Individual plaintiffs may also lack control over the direction of the litigation.

Common categories of class action cases include product liability claims, employment claims, consumer protection claims, and data breach actions. For example, the Volkswagen “clean diesel” emissions class action lawsuit resulted in a $14.7 billion settlement being awarded to numerous car owners and other plaintiffs.

The procedures for class action lawsuits in federal court are set forth in Rule 23 of the Federal Rules of Civil Procedure (FRCP). The Class Action Fairness Act of 2005 determines whether a class action can be maintained in federal court, or whether it has to be litigated in state court.

Rule 23 of the FRCP outlines four criteria that must be satisfied to pursue a class action: numerosity, commonality, typicality and adequacy.

• Numerosity: The class is so numerous that joinder of all members would be impracticable
• Commonality: There are questions of law or fact common to the class
• Typicality: The claims or defenses of the representative parties are typical of the claims or defenses of the class
• Adequacy: The representative parties will fairly and adequately protect the interests of the class.

When multiple class actions that involve a common question of law or fact are filed in different courts, it may be possible to consolidate the cases. The Judicial Panel on Multidistrict Litigation can transfer multiple similar cases to one district court if such transfer will promote justice and is more convenient for the parties.

To initiate a class action, counsel for the plaintiffs will file a complaint with the relevant court that lists the proposed class of plaintiffs. Plaintiffs’ counsel will then proceed to make a motion requesting that the court grant certification of the class action. Once it is determined that the conditions under Rule 23 of the FRCP have been met, the court can enter an order certifying the class action.

Once the court comes to a final judgment on the merits, it is typically binding on all members of the plaintiff class assuming that the class members were afforded proper due process. However, class actions are often settled outside of court.

Class action settlements are governed by Rule 23(e) of the FRCP. A class action settlement can be reached either before or after the court certifies the case as a class action. The terms of the settlement must be fair, reasonable and adequate. Unlike individual actions, where settlement terms can often be kept confidential, it is more difficult to keep class action settlement terms confidential. The parties may petition the court to preserve the confidentiality of specific terms of the settlement agreement.