The Pros and Cons of Class Action Lawsuits

In 2011, the Florida Department of Agriculture was ordered to pay nearly $14 million, plus interest, to more than 40,000 Palm Beach County homeowners as compensation for the destruction of more than 66,000 healthy residential citrus trees in the area.  This was one of many class action lawsuits filed throughout the state during the Department of Agriculture’s “War on Citrus Canker” which took place nearly a decade ago.

When Can You File a Class Action Lawsuit?

Under Rule 23 of the Federal Rules of Civil Procedure, a class action may be filed if there are multiple plaintiffs with common legal or factual issues, the class is so large that joinder of all its members would be impracticable, and the representative parties have claims that are typical to those of the rest of the class and can fairly and adequately protect the interests of that class.

Under 28 U.S.C.A. §1332(d)(2), the federal district courts have original jurisdiction of civil actions that exceed $5,000,000 in value, and where any member of the class of plaintiffs is from a state different than that of the defendant or where the defendant is from a foreign state or is a foreign state.

Advantages and Disadvantages of a Class Action

The advantages of a class action lawsuit include:

  • Lower costs of litigation – The expenses are shared among the class members who pay nothing up front and even then only if the lawyer is able to settle on their behalf or wins at trial.
  • Stronger position – The very nature of a large group of people with a similar claim leads to a stronger negotiating position, the reason so many of these cases settle out of court.
  • Suspension of the Statute of Limitations – Plaintiffs are given more time to join the lawsuit (provided they have not opted out) as opposed to the strict limitations for individual claims.
  • Chance for all plaintiffs to collect damages, even for a small amount – Most plaintiffs do not find it prudent to sue for a small amount, and many defendants cannot pay high damages  to multiple plaintiffs; a class action lawsuit assures that everyone who joins gets a piece of the settlement, and payouts are more predictable and manageable for defendants.
  • More uniformity in payouts – More certainty for defendants under the ruling of a single judge means more consistent payouts for plaintiffs.
  • Judicial efficiency – One case in one court means less court time with fewer judges.

The disadvantages of a class action include:

  • Lack of control – Only the representative parties have decision-making power to settle and to make other important decisions regarding the lawsuit.
  • They take time – Resolution of these types of claims typically take longer than the usual tort claim due to their procedural complexities.
  • Limited forms of compensation – Compensation is generally limited to financial damages and rebates; a plaintiff seeking another form of relief may not be satisfied.
  • No ability to make a private claim – If the class action is unsuccessful, the individual members of the class may not bring claims of their own at a later time.

For more information about class actions and other mass tort lawsuits, contact a law firm with a solid record of experience and successful litigation in this highly complex area of the law.

If you have any questions on this blog or need information on other personal injury queries, please call the Law offices of Lytal, Reiter, Smith, Ivey & Fronrath located in West Palm Beach at 1-800 4-RIGHTS  (1-800- 474-4487)  We welcome your call and look forward to helping you.