WASHINGTON, October 11, 2015 – Not every class action lawsuit turns into a movie starring Julia Roberts. But we can be thankful for Ms. Roberts performance, and Ms. Brokovich’s tenacity in exposing the bad actions of one power company that negatively affected an entire community, resulting in chronic illnesses and death.
Class action lawsuits took a legal center stage with that movie, Erin Brockovich came out. In the film Roberts, starring as Erin, led the charge against Pacific Gas & Electric in Hinkley, California.
The power company was contaminating the local water supply, resulting in cancer and infertility in residents.
Most who are asked about class action lawsuits would probably say that individual plaintiffs get very little compensation, maybe a coupon, and that the attorneys are the only ones who “win.” Want a class-action-produced coupon? Go to Class Action Rebates.
And while some class-actions are legitimate, resulting in change, others have qualified for the “you’ve got to be kidding” category.
A suit was filed against candy company Russell Stover for labeling candy as “low carb.” The candy did contain more carbohydrates than advertised. Consumers got a refund of 30 cents for each purchase up to five.
A suit was filed against Weber Grills because it advertised they were made in the U.S.A. It turns all of their grills were made in the U.SA. except for one line. Consumers got $9 rebates as a result of the suit..
Some class action lawsuits may indeed appear crazy. The truth is, class action lawsuits, perhaps even more than individual lawsuits, are responsible for more good, and more riddance of bad, than most people realize.
The history of class action lawsuits and multi-district litigation is one that shows very significant and important changes in the way business is conducted, to the betterment and safety of society.
In the 1950s and 1960s, several class action lawsuits were responsible for racial desegregation.
The 1954 class action case of Brown v. Board of Education might be the most famous decision ever reached by the United States Supreme Court. Following that case, racial segregation in schools was prohibited.
In the 1980s asbestos was the subject of class actions. Now, the use of asbestos is highly limited and tightly regulated.
Simply, a class action lawsuit brings similar claims by a group of people injured by one or more common defendants into one case.
Rather than proceed by themselves, individuals join others in a class action. An individual, or a small group, act as lead plaintiffs for the larger group. If there are enough claims to warrant resolving them in a single case, the “class” will be “certified.”
Certification also requires a finding of common facts and legal issues, that the lead plaintiffs’ claims are typical for the class and that the lead plaintiffs “fairly” represent the interests of the class.
Class actions simplify the handling of a large number of cases, and they protect the interests of “absent” plaintiffs.
Multidistrict Litigation (MDL) cases are another “vehicle” that allow for the potential resolution of cases where many people are potentially involved. MDL cases are seen often in situations involving harmful drugs, defective medical devices, large injury disaster cases and securities fraud cases. Different from class action cases, which are single lawsuits with several claimants,
MDL cases are not consolidated for a single outcome, but remain separate lawsuits, where pre-trial “discovery,” hearings, settlement conferences and trial scheduling are handled by one judge.
Here is a small sample of companies that are currently defending MDL litigation across the country:
BlueCross, CitiMortgage, WellPoint, Wesson Oil, Facebook, Wachovia, Coca Cola, Groupon, Intel, Chiquita, Home Depot, Federal Express, Amazon, Bank of America, NuvaRing, H&R Block, Family Dollar Stores, Colgate-Palmolive, Tropicana Orange Juice, Frito Lay, Fannie Mae Securities and Tylenol Marketing.
Here are some class action lawsuits that have resulted in significant, positive changes:
Price v. Phillip — involved cigarette company advertising;
Schneidler v. National Organization for Women – involved anti-abortion activities;
Collins v. United States – involved honorable discharge under “Don’t Ask, Don’t Tell;”
Smiley v. Citibank — involved limiting credit card late fees and other penalties;
Lane v. Facebook – involved Internet privacy and social media.
In 1994, a $3.4 billion settlement against numerous breast-implant manufacturers was entered for women who suffered autoimmune disease from their silicone breast implants, .
In 1998, six tobacco companies settled a case involving health care costs for smoking-related health care costs, in the amount $206 billion.
In 2001, a judgment was entered against Exxon Mobil, in the amount of $5 billion, stemming from the damages from the Alaskan oil spill. The judgment was later reduced to $500 million.
In 2006, a $7.2 billion settlement was entered in favor of investors against Enron. Enron fraudulently concealed company losses.
Class action lawsuits are often responsible for significant positive change. Businesses are forced to adapt and change dangerous or illegal practices.
Too often, the particulars and the settlements of lawsuits against big businesses and corporate defendants are kept confidential. The result is that bad practices and bad acts are forever kept secret, allowing the bad actors to continue to act badly, because the public will never know.
Class action lawsuits make bad acts public.
Like most things, there are good, not so good, and bad class action lawsuits. The bad suits often attract more attention, and question the attorney’s fees, which might well seem ridiculous when looked at from the standpoint of what was accomplished.
The reality about attorneys’ fees is that in most class action cases, the fees are deserved, and always, they are approved first by a judge. There is an enormous amount of work and specialized skill involved in filing and prosecuting a class action suit. The lawsuit can effectively take over an attorney’s life and can extend for many years.
The attorney’s fee is contingent, meaning that for years, there is no fee received at all, and then the attorney is only paid if and when a settlement or a verdict is reached. Finally, the law firms that handle these cases typically put up all of the expenses involved, risking “real” cash without guarantee of reimbursement.
In a suit filed in 2003 and settled in 2014 against Ticketmaster, plaintiffs alleged they were defrauded when they were charged hefty undisclosed order processing and delivery fees. Approximately 50 million ticket-buyers were given a $1.50 credit for each transaction up to a total of 17 to be applied toward future purchases for purchases from October 1999 through October 2011.
Ticketmaster paid $20,000 to the two named plaintiffs and attorney’s fees of $15 million — four attorneys, 11 years, approximately $340,000 per year per attorney. Additionally, attorneys’ expenses of $1.5 million were ordered.
Was it a reasonable exercise? Some may scoff. Others, unable to go to events because of excessive fees, might disagree. Consumers benefited.
A report of a “ridiculous” class action lawsuit often triggers howls. When facts and understanding are there, appreciation often follows.
Thank you, Erin Brokovich (and Julia Roberts).
Paul A. Samakow is an attorney licensed in Maryland and Virginia and has been practicing since 1980. He represents injury victims and routinely battles insurance companies and big businesses that will not accept full responsibility for the harms and losses they cause. He can be reached at any time by calling 1-866-SAMAKOW (1-866-726-2569), via email, or through his website.
His book “The 8 Critical Things Your Auto Accident Attorney Won’t Tell You” can be instantly downloaded, for free, on his website: http://www.samakowlaw.com/book.