What a Class Action Is
A class action is a lawsuit in which one or a few plaintiffs sue on behalf of a larger group of people who share a common legal claim. Instead of filing thousands of individual cases, the court resolves the claims together. The named plaintiffs represent the class, and the outcome generally binds everyone who falls within the class definition unless they opt out.
Class actions are common in consumer protection, employment, securities, antitrust, and product liability cases. They allow people with small individual claims to combine their resources when a single lawsuit would not be worth the cost.
The Rule 23 Requirements
In federal court, class certification is governed by Rule 23 of the Federal Rules of Civil Procedure, available at uscourts.gov and on Cornell's Legal Information Institute at law.cornell.edu. A proposed class must satisfy four threshold requirements:
- Numerosity. The class is so large that joining every member individually would be impractical.
- Commonality. There are questions of law or fact common to the class.
- Typicality. The named plaintiffs' claims are typical of the class members' claims.
- Adequacy. The named plaintiffs and their lawyers will fairly and adequately protect the class's interests.
For a class seeking money damages, Rule 23(b)(3) adds two more requirements: predominance, meaning common questions outweigh individual ones, and superiority, meaning a class action is better than other methods of resolving the dispute.
Types of Classes
| Type | Rule | Typical relief |
|---|---|---|
| Incompatible standards or limited fund | 23(b)(1) | Prevents inconsistent results or preserves a limited fund |
| Injunctive or declaratory relief | 23(b)(2) | Stops or requires conduct, such as a discriminatory practice |
| Damages class | 23(b)(3) | Money damages, with notice and opt-out rights |
Certification: The Key Step
A class action is not official until the court certifies it. The plaintiff files a motion for class certification, and the court holds a hearing. The court examines whether the Rule 23 requirements are met and defines the class. Certification is often the most contested part of the case, because it determines whether the lawsuit proceeds as a class or collapses into an individual claim.
The Supreme Court has emphasized that courts must conduct a rigorous analysis, sometimes probing the merits to the extent they overlap with certification. If certification is denied, the named plaintiff may continue alone, and other class members are not bound.
Notice and Opting Out
In a damages class under Rule 23(b)(3), the court directs notice to class members. Notice must be the best practicable under the circumstances, and it tells class members about the case, their rights, and how to exclude themselves. A class member who opts out is not bound by the result and may pursue an individual claim. A member who does not opt out is bound by the judgment or settlement.
Not every collective action uses opt-out. Collective actions under the Fair Labor Standards Act generally require employees to opt in by giving written consent. That difference matters when estimating who is covered.
Settlement and Fees
Most class actions settle rather than go to trial. A settlement must be approved by the court after notice to the class. The court reviews whether the settlement is fair, reasonable, and adequate, and it considers the interests of absent class members. The court also reviews any request for attorney fees, which are often paid from the settlement fund.
When money remains unclaimed, courts sometimes approve a cy pres distribution to a nonprofit or another cause related to the litigation. Class members receive notice and a chance to object to the settlement before it is finalized.
Class Action vs Other Group Litigation
| Device | How it works | Binding effect |
|---|---|---|
| Class action | One case for a defined group | Binds class members who do not opt out |
| Mass joinder | Many plaintiffs joined in one suit | Binds only the parties |
| Multidistrict litigation | Related federal cases consolidated for pretrial | Each case keeps its own identity |
| Individual lawsuit | One plaintiff, one case | Binds only that plaintiff |
Multidistrict litigation, or MDL, is often confused with a class action. In an MDL, cases are consolidated before one judge for coordinated pretrial proceedings, but they remain separate lawsuits unless they settle or are remanded.
Who Represents the Class
The named plaintiffs are the public face of the case, and they must have a real stake in the outcome. Courts look at whether the representatives have claims that align with the class and whether they will vigorously pursue the case. Class counsel must also be qualified and able to fund and manage the litigation. If the representatives or their lawyers are inadequate, the court can deny certification or replace them.
Filing a class action can also pause the statute of limitations for class members while certification is pending, through a doctrine known as tolling. That rule varies by jurisdiction and by the type of claim, so timing can be critical.
Federal and State Courts
Class actions can be filed in state or federal court. The Class Action Fairness Act gives federal courts jurisdiction over many large class actions involving parties from different states. State class action rules vary, and some states are considered more favorable to plaintiffs than others. Removal, jurisdiction, and choice of law can shape where a case is heard and how it proceeds.
Practical Points for Class Members
- Read the class notice carefully and note the opt-out deadline.
- Keep documents that support your claim.
- Understand that a settlement may release your claim even if you did nothing.
- You can object to a settlement, but you must follow the court's procedure.
This guide is general information about civil procedure, not legal advice. Class action rules and deadlines vary by jurisdiction and by case, so consult a licensed attorney about your rights.