What are the Stages of a Class Action Lawsuit?

What are the Stages of a Class Action Lawsuit?

Class action lawsuits involve many stages between filing the lawsuit and obtaining compensation for affected consumers. Below are the typical stages of a class action lawsuit.

Pre-lawsuit investigation

When a consumer brings a potential case to class action attorneys, the attorneys must investigate the case to make sure it has the potential to become a class action. That investigation typically involves gathering information from the consumer and researching the facts and law at issue to ensure the case has merit. The attorneys will also want to determine whether other customers have experienced the same problem and assess whether a lawsuit would meet the criteria for class certification.

For example, if a consumer approaches a class action attorney about a defective air conditioner in their vehicle, the attorney will likely want copies of receipts for any repairs the customer had to pay out of pocket and copies of any documented communications between the consumer and the automaker. The attorney will also want to research the defect to see if other people are complaining of a similar issue with their air conditioner.

If the attorney decides the case has potential as a class action lawsuit, they will also need to make sure the consumer is willing and able to fulfill the duties associated with being a class representative. They will also want to make sure the consumer’s claim is still within any applicable statute of limitation.

Complaint

Filing a complaint is the first step in officially starting a lawsuit. The complaint identifies the plaintiff and defendant to the lawsuit and sets forth the factual and legal bases.

The plaintiff in a class action is generally the injured party who wants to serve as the class representative. The complaint will generally state the individual brings the lawsuit in their individual capacity and “on behalf of others similarly situated,” or similar language that shows the lawsuit seeks class certification.

In addition to identifying the parties to the suit, the complaint will outline how the defendant’s actions harmed the plaintiff, and other consumers, and the remedies they seek. The complaint will also state why the lawsuit meets the requirements for class action status.

Motion to Dismiss

Once a plaintiff files a complaint, the defendant must either file an answer or move to dismiss the case. Typically, defendants will file a motion to dismiss, as it gives them a chance to entirely knock out the lawsuit early on, or at least narrow the lawsuit by getting rid of some claims.

Defendants will often argue the Court should dismiss a case because the plaintiff allegedly failed to state a claim. For example, they may argue the facts the plaintiff alleges are insufficient to set forth a claim or that the claim falls outside of the statute of limitations.

Answer

If a court does not dismiss a complaint, the Defendant must file an answer to the complaint. In the answer, the Defendant must respond to every allegation set forth in the complaint. Generally, the answer will respond to each allegation by admitting it, denying it, or stating the Defendant lacks sufficient knowledge or information to respond. The answer will also identify any defenses to the lawsuit the Defendant believes it has.

Motion for Summary Judgment

Defendants typically file motions for summary judgment in hopes of winning a case without a jury trial. With a motion for summary judgment, the moving party (typically the defendant) will argue that there is no genuine dispute as to any material fact, and they are therefore entitled to summary judgment in their favor. Basically, the moving party argues a trial is not necessary because there is no real issue for a jury to decide. A court may grant summary judgment on some claims while letting other claims proceed. If a court grants summary judgment on all the plaintiff’s claims, the lawsuit generally ends at that point.

Class Certification

Class action lawsuits begin as putative class actions, which means they intend to seek class certification. Class certification means a Court has decided the lawsuit meets the requirements for class action status. If a court grants class certification, the outcome may be binding on class members who are not involved with the litigation. You can read more about class certification here.

Settlement Agreement

Many class action lawsuits end with settlement. In fact, only a very small number of cases go to trial. When class actions settle, they go through more steps than a typical lawsuit because the settlement will impact class members who are not part of the lawsuit.

The first step in settlement proceedings is to reach a settlement agreement. The agreement will cover points such as which individuals the settlement covers and what the Defendant will provide as a remedy. For example, in an auto defect lawsuit, the agreement will likely state it covers individuals who purchased a certain vehicle with a particular defect. It will also state what the automaker will do to resolve the problem, such as agree to fix a defect free of charge or reimburse the customer for money they paid out of pocket.

The parties may also engage in mediation as part of the proceedings before the court. These mediation proceedings may in some cases result in the parties agreeing on a settlement, which is filed before the Court.

Preliminary Approval Order

When the parties decide to settle a case as a class action, they must obtain court approval because the settlement will affect individuals who are not parties to the lawsuit. The parties begin the process of obtaining approval of their settlement agreement by filing a motion for preliminary approval.

The Court will only grant the motion for preliminary approval if the proposed settlement is “fair, reasonable, and adequate.” In general, the Court will want to make sure the settlement adequately compensates the class members given the facts of the case and the likelihood of the plaintiffs prevailing if the case went to trial.

Final Approval

After the Court grants preliminary approval of the settlement agreement, the parties must provide a notice to the class members with information about the terms of the settlement agreement. The Court will hold a hearing and allow the parties, and class members, an opportunity to argue in support of or in opposition to the settlement. Following the hearing, the Court will either grant or deny final approval of the settlement agreement.