Class Action Law & Legal Definition

A class action is a representative action wherein one or more plaintiffs actually named in the complaint, along with their counsel bring a lawsuit on behalf of themselves and the defined class against one or more defendants. The claims of the "class representatives" must arise from facts or law common to the class members. Most class actions are called "plaintiff class actions", where group of plaintiffs sue an individual defendant, however, a class action can be a "defendant class" action, filed against one or more defendants representing a group of defendants. A court will certify a lawsuit as a class action when there are too many class members for them all to be named as parties in the lawsuit.

In federal court, the procedures for certifying a class and the requisite elements for certification are governed by Rule 23, Federal Rules of Civil Procedure. Before a court certifies a class action, it must conclude that there are too many class members for them all to be named as parties in the lawsuit. Technically, class members do not "join" into the litigation, but decide to participate by not "opting-out."

Most class actions are filed for compensatory (money) damages. Class actions may also be filed to resolve disputes over a "limited fund," where the money available is inadequate to fully compensate all class members.

Occasionally, class actions are filed to seek a declaratory judgment, where the judge makes an official statement or interpretation regarding an issue, such as whether it is legal or illegal. Finally, a class action may seek injunctive relief, asking for the court to order the defendant to do or refrain from doing something.

If the constitutional and procedural protections required for fairness are met in the underlying action, all absent class members are bound to the judgment or settlement of the case. However, if the action is primarily for compensatory damages, absent class members are entitled to notice and an opportunity to "opt-out" (exclude themselves) from the proceedings. Generally, class members do not "join" into the litigation, but decide to participate by not "opting-out." If a person opts-out, he is not bound by any judgment or settlement of the class action and may file a separate lawsuit.