A class-action lawsuit is a type of lawsuit in which a group of people with similar injuries or grievances caused by the same product or action sue a defendant as a group. The group of people who are filing the lawsuit are generally represented collectively by a member of that group. Often, it is simpler to combine many lawsuits into a class-action lawsuit. The benefit of a class-action lawsuit is that a collection of injuries or grievances can be more powerful in a court of law than individual complaints. Additionally, filing a class-action lawsuit leads to a consolidation of evidence, attorneys, and witnesses that can make the case more efficient. Historically, class-action lawsuits have been filed against companies, organizations, or governments.
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How Many People Does it Take to Have a Class-Action Lawsuit?
There is no precise number of individuals required to file a class-action lawsuit. However, a general rule of thumb is that less than 20 individuals will typically not suffice for a class-action lawsuit. Fifty is considered a more viable number. And some class-action lawsuits have reached millions of plaintiffs.
According to Rule 23 of the Federal Rules of Civil Procedure, a class-action lawsuit must fulfill the following requirements:
- “The class is so numerous that joinder of all members is impracticable;
- “There are questions of law or fact common to the class;
- “The claims or defenses of the representative parties are typical of the claims or defenses of the class; and
- “The representative parties will fairly and adequately protect the interests of the class.”
What Is the Biggest Class-Action Lawsuit of All Time?
With a staggering total payout of $206 billion, the biggest class-action lawsuit of all time is known as the Tobacco Master Settlement Agreement. The Tobacco Master Settlement Agreement stemmed from a class-action lawsuit between the attorneys general of 46 states and several major tobacco companies. The purpose of the lawsuit was to recover tobacco-related health-care costs as well as impose severe restrictions on the marketing practices of the tobacco industry, especially toward children and teenagers. Tobacco companies agreed to make annual payments to compensate states for some of the medical costs caused by caring for people with smoking-related illnesses. The MSA:
- Prohibits direct or indirect youth targeting
- Prohibits brand-name sponsorship at concerts, sports events, or events with an intended audience with a significant percentage of youth
- Prohibits youth access to free samples of tobacco products
- Prohibits purchasing of placements of tobacco products in the media
- Prohibits outdoor advertising of tobacco products
- Prohibits transit ads
- Prohibits the use of cartoons to advertise tobacco products
Additionally, the settlement dissolved tobacco research groups such as the Tobacco Institute, the Center for Indoor Air Research, and the Council for Tobacco Research. These organizations were funded by the tobacco industry, which brought into question the legitimacy and transparency of the research they conducted.
Class-action lawsuits have influenced how business is conducted, helped to remove harmful products from the market, and created a greater culture of transparency in the stock market. Class-action lawsuits demonstrate the power of a community banding together to be heard and trigger change.