Class Action Versus Mass Tort Lawsuits: Part 1
If you watch more than your fair share of late night television, you have seen the “lawyer ads” looking for clients who were injured by a prescription drug or medical device and may thus be eligible for “cash awards.” Many viewers mistakenly believe that such ads are intended to recruit potential plaintiffs for a class action lawsuit when, in fact, many such ads are designed to attract clients who will become plaintiffs in a special type of personal injury case known as a mass tort lawsuit.
Since the distinction between class action and mass tort lawsuits can be difficult for someone without a background in law, in this series of posts our personal injury lawyer will provide a summary of the similarities and differences in these lawsuits as well as a discussion of which type of lawsuit is best for a given type of injury.
Similarities in Class Action and Mass Tort Lawsuits
Class action and mass tort lawsuits have certain features in common. In general, both types of lawsuits may arise if:
Both class action and mass tort lawsuits ask the court to consolidate many potential lawsuits into a single lawsuit where the verdict is binding on all involved parties.
It is also worth noting that practically all class actions are filed in a federal court because federal courts claim original jurisdiction in all cases where there is a diversity of citizenship or if the damages sought exceeds $5 million. In a mass tort, the initial phases such as liability and issues of fact are decided in federal court although individual lawsuits can be heard in either a federal or a state court.
Differences in Class Action and Mass Tort Lawsuits
In a class action, there is a single plaintiff and their lawyers who serve as representatives for all members of the injured party class. These “original” or “lead” participants will usually receive a greater proportion of the lawsuit’s settlement while the class members who opted in will receive very little in the way of cash or discounts from the defendant. This is usually seen as fair because the lead plaintiff and lead counsel will have incurred most of the expenses (arranging for expert testimony, witnesses, and legal research leading up to trial.
As will be better explained in another post, in a mass tort the issue of liability is settled before trial and subsequent legal actions are to decide the amount of damages that will be awarded to individual plaintiffs. Thus, the awards to individual plaintiffs are usually substantially larger than awards in class actions.
Should I “sign on” to a class action lawsuit or “opt out”?
When a lawsuit is certified as a class action the court will order the defendants to produce as complete as list as possible of all potential plaintiffs. Most plaintiff’s attorneys will supplement this list with clients that are recruited via advertisements in newspapers, on television, and the Internet. Regardless of how they are recruited, all potential plaintiffs will be given the opportunity to “opt out” (decline to participate) of the class action rather than become a party to the lawsuit. Since membership in the plaintiff class is automatic except in rare cases, a party must specify that they do not wish to become a party to the class action by signing the documents that they received notifying them of the lawsuit.
If a party signs on to the class action, they will waive their right to pursue their own lawsuit as a single plaintiff later and will be required to accept any settlement that is reached by the lead plaintiff. In most cases, the settlement that is disbursed to parties other than the lead plaintiff is very small and is often in the form of coupons or other credits that can only be redeemed by the defendant for discounts on future purchases from the defendant. Since the potential award is so small, most parties elect to ignore the sign on option unless they and their accident lawyer believe that an individual lawsuit would, most likely, fail.
Wrapping Up Part 1
Both class action and multiple tort lawsuits are used when there are many potential plaintiffs that may file lawsuits seeking damages from a single defendant. By merging many individual lawsuits into a single class action lawsuit, the courts assure the plaintiffs of a fair hearing and an equitable settlement.
A major criticism of a class action is that a substantial portion of any award to the class will go to the lead plaintiff and plaintiff’s counsel and the remaining portion of that settlement, however small, will be distributed to the class members.
On the other hand, a mass tort lawsuit is decided in two phases with the first being a hearing to determine responsibility and liability and a second, individual, lawsuit to determine the amount of damages owed to individual plaintiffs.
In our next post, our personal injury lawyer will discuss mass tort lawsuits and how these actions are more favorable to individual plaintiffs.
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