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March 28th, 2025
Class action lawsuits are frequently in the news, with headlines reporting settlements in class actions for a wide range of legal claims, from data breaches to defective products to deceptive practices in violation of consumer protection laws. Recent publicized class action settlements include claims against auto manufacturer Mitsubishi for allegedly defective airbags, claims against mortgage lender Loan Depot for allegedly failing to prevent a data breach, and claims against mortgage lender Nationstar Mortgage for allegedly charging improper fees for mortgage payments by telephone, to name a few.
The class action procedure offers the benefit of bringing a large number of similar claims as a group that might not otherwise be economically feasible to bring individually. Because of the complexity of handling so many claims at once, particular rules apply to bringing and prosecuting class actions.
In federal courts Federal Rule of Civil Procedure 23 establishes basic rules for class actions, and most states have similar rules. Generally, Rule 23 permits a representative or representatives to bring a lawsuit on behalf of a class of similarly situated individuals where the following conditions are met:
(1) the class is so numerous that joinder of all members is impracticable;
(2) there are questions of law or fact common to the class;
(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and
(4) the representative parties will fairly and adequately protect the interests of the class.
Where these requirements are satisfied, a proposed class must still meet one of several other conditions under Fed. R. Civ. P. 23(b), including a risk of inconsistent results or circumstances where resolution of individual class members’ claims would interfere with other class members’ ability to protect their interests; situations where a party opposing a class refuses to take action applying to all the class, requiring court action toward the entire class; or where questions of law or fact common to class members predominate over questions affecting individual members. This entire process requires approval by a court, or “certification.”
Once a court certifies a class, Rule 23 imposes specific rules for maintenance of class actions. These rules include notice to class members and an opportunity for class members to opt out of the class to pursue their claims individually. Part of the certification process involves a court’s appointing class counsel, a lawyer who will represent the entire class under requirements set by Rule 23. Finally, the rule establishes particular standards for settlement of class actions, including a provision that a class action may not be settled or dismissed without court approval.
Class actions can be complex and operate by a specialized set of rules. For an individual who might be a member of a lawsuit class, having a lawyer experienced in handling these unique and challenging claims can help ensure that the class member meets the law’s requirements and sees his or her rights fully protected.
