At one time or another, most American consumers have been eligible to join a class action lawsuit that would have entitled them to a portion of a settlement or judgment award—their very own slice of the money pie. Love it or hate it, in our extremely litigious country, there have been thousands of successful class action lawsuits and new ones seem to pop up every day—it's like legal Whack-a-Mole, but you can “win” cash instead of a stuffed polyester panda.
Trust me, and not just because I'm a lawyer, but rather because I'm a consumer just like you who has received checks (three to be exact, totaling nearly $200 in value) for joining class action lawsuits for products and services I had previously purchased. If you want to get in on the (class) action, read on:
Law School 101: What is a class action suit?
Here's three years of law school compressed into three paragraphs:
When a company allegedly does something wrong that harms a large number of people in the same way, people from the harmed group often come together to bring a giant case against the company. In such a case, the group litigation becomes known as a class action suit. A famous example of a class action lawsuit would be the group of workers injured by asbestos-related cancer who filed a class action lawsuit against the asbestos manufacturer. Also, the much-loved film Erin Brockovich starring Julia Roberts was based on the true life class action lawsuit against Pacific Gas and Electric for contaminating drinking water that caused nearly 200 people in a California town to get cancer.
A class action suit gets started when one or more people feel that they, along with a group of other similarly situated people, have been wronged by the same person or company. Similarly wronged people are notified of the lawsuit and are given a chance to participate in the lawsuit as a class member.
As a class member, you aren't responsible for paying any legal fees, even if the lawsuit is unsuccessful. Ultimately, if you decide to join the lawsuit as a class member, you will have to share any settlement or judgment awarded in favor of the class with all the other class members who joined the suit, and a set amount or percentage of the settlement will go toward attorney fees. For example, assume that there is a $1.5 million judgement awarded to 10,000 class members and attorney's fees are $500,000. That means that after attorney’s fees, there is $1 million dollars left to be divided equally among the 10,000 class members ($1 million/10,000 = $100 per class member).
Members wanted! How to join a class action suit
The most common way to join a class action suit is through responding to a notice of the suit sent to you in the mail by the law firm handling the case. You've probably received such a notice in your mailbox before. Maybe the notice confused you, so you spit your gum out in it or perhaps you mistook the notice for junk mail or a scam and nonchalantly tossed it out. Big mistake! That notice could have been your ticket to money in your pocket. In the future, if you receive such a notice and want to join the suit, simply follow the instructions included with the notice. If you have questions, contact the law firm indicated on the notice. Easy, right?
If you don't receive a notice, that’s okay too—you still may be able to join the lawsuit. Check out an online database of ongoing class action litigation to see if any currently pending suits pertain to you. I regularly check both the "Open Lawsuit Settlements" section of the Top Class Actions website and the list of current class action suits listed on ClassAction.org. Also, you may learn of current suits through advertisements on television or in various print publications.
Show me the money! How class members get compensated
The type of compensation varies among cases:
- Typically, you will receive compensation in the form of cash (a check). As for how much, it could be $3, $300, or $3,000,000—it just depends. For example, class members in the class action lawsuit against the manufacturer of Kinoki foot pads received $10 per package of foot pads purchased; class members in the class action lawsuit against Bank of America for overdraft charges received about $30 each; and cancer-stricken class members in past asbestos class action suits have sometimes received hundreds of thousands of dollars.
- In some cases, your compensation may consists of a replacement product or a manufacturer's credit. For example, in a recent class action suit against HP, class members who owned affected printer models received a $13 e-credit for HP printing products.
- Sometimes, class members may receive a discount on future services. For example, in the recent class action suit against Ticketmaster, class members received a $1.50 discount on future tickets purchased through Ticketmaster.