CLASS ACTIONS

Introduction

A class action is a very large-scale lawsuit that involves thousands, if not millions, of plaintiffs. Class actions lawsuits are civil lawsuits brought by one or more people on behalf of themselves and others who are similarly situated, with similar circumstances where the common issues are the most critical to the lawsuit. For example, if a large number of investors lose money as a result of a public company's allegedly fraudulent activity by the company, the principal issue will be whether the fraud caused money to be lost. In addition to securities related class actions, Hach & Rose handles class actions against the manufacturers of allegedly defective or hazardous products. Typical class actions involve hundreds, thousands or millions of people who have comparable claims. Class action “certification” permits all claims to be heard in a single trial. A “class” is just another name for a group of plaintiffs. In the case of securities, the class is usually comprised of any shareholder who owned the stock when the alleged fraud would have affected the share price.

How A Typical Class Action Proceeds in Court:

The first step is drafting and filing a complaint against the defendants. This document is then filed in court and delivered or served on the defendants by the U.S. mail or a process server. Once the initial complaint is filed, the defendants will usually file an answer denying the allegations. Alternatively, they may elect to challenge the complaint by filing certain motions challenging the lawsuit. If motions are filed, an answer will be required after the judge rules on the motions unless the case is dismissed. After the answers are filed and any motions ruled on, a period of discovery will take place. Discovery involves the lawyers demanding documents from the other side, asking written questions, and taking depositions. Often courts will hold a conference with the lawyers and set a timetable for preliminary discovery needed for certification to be completed. During the discovery phase, defendants may file motions to challenge the legal sufficiency or underlying factual basis for the action. These are called motions for summary judgment. If a defendant wins, some or all of the claims of plaintiffs may be dismissed.

After all preliminary discovery is complete, the plaintiff will file a motion to certify a class action. The defendants will file objections to certification. The Court will have a hearing. If plaintiffs win, the case proceeds to be certified. If the lawsuit is one seeking money damages, the court will order notice go to the class. Notice is published in the newspaper or sent through the mail. This notice advises class members of their rights, and sets deadlines for objecting, "opting out," or entering an appearance through a lawyer. After final certification is granted, additional discovery may be needed before the case is tried. After that discovery is completed, the case is set for trial unless it settles. The trial of a class action procedurally is the same as for any other civil lawsuit.