Class Actions

Class actions developed as a form of litigation in which a group of people claiming similar injuries or damages could band together to sue the same defendant. Nowadays, however, these cases are often pursued with the sole intention to shakedown a defendant—hurting businesses and damaging the American economy. Read More...

The sheer size of some classes is enormous—thousands to sometimes, millions of individual claimants come together in single class actions. The large size of a proposed class could result in huge damage awards, making these cases very risky for businesses despite strong defenses. Consequently, once a court decides that a case can proceed as a class action, most defendants end up settling the case instead of risking a trial—even if they have not done anything wrong.

Unfortunately, plaintiffs’ lawyers have exploited businesses’ caution by filing many meritless class actions—all with the goal of scoring a jackpot settlement where consumers receive minuscule amounts, and lawyers walk away with huge fees. For example, the Telephone Consumer Protection Act (TCPA) and our securities laws have sparked enormous class action lawsuits that significantly damage legitimate American businesses all while benefiting plaintiff lawyers. Even more alarming are cy pres cases where some or all of the settlement proceeds go to a charity rather than the class members. The U.S. Department of Justice recently ramped up efforts to review abusive class action practices to curb further exploitation.

The Class Action Fairness Act of 2005 (CAFA) helped curb many class action abuses by moving most large, interstate class actions to federal courts, where examination of class actions is generally more rigorous than in state courts. To help address the problems not resolved by CAFA, the Institute for Legal Reform (ILR) believes The Fairness in Class Action Litigation Act (FICALA) would help to ensure that class actions are fulfilling their intended purpose. FICALA aims to bring fairness to the current state of class action litigation by closing various loopholes that increase meritless cases, limiting conflicts of interest between these plaintiffs’ attorneys and their class member clients, as well as bringing needed reforms to multidistrict litigation and fraudulent joinder standards.

01/01/2019

Suggested Resources

Research
  • Ill-Suited: Private Rights of Action and Privacy Claims

    Ill-Suited: Private Rights of Action and Privacy Claims

    July 11, 2019

    Private rights of action (PRAs) are highly problematic: the plaintiffs' bar benefits significantly from America's lawsuit system, while consumers are left with little. PRAs are especially poor tools for addressing privacy issues, which are better left to regulators with relevant expertise and perspective to shape and balance penalties, deterrence, innovation, and consumer protection. Read More

  • Unstable Foundation: <br>Our Broken Class Action System and How to Fix It

    Unstable Foundation:
    Our Broken Class Action System and How to Fix It

    October 24, 2017

    Unstable Foundation examines the pervasive flaws afflicting the United States' class action system. Class actions rarely provide meaningful compensation for class members, and are poorly suited to deterring wrongful conduct. Read More

All Results for Class Actions

  1. SCOTUS Punts on Cy Pres Issue

    March 21, 2019 | News

    In an 8-1 ruling, the U.S. Supreme Court sent a case regarding the fairness of cy pres settlements back to the Ninth Circuit, Law360 reports.... Read More

  2. ILR Research Review - Spring 2019

    March 21, 2019 | Research

    The rising pace of private securities class actions could present a threat to the health of U.S. capital markets, while the ongoing wave of municipality lawsuits stands in the way of global settlements and undermines the authority of lawmakers and state attorneys general. White papers covered in this edition of the ILR Research Review detail the causes and current state of these litigation trends, along with a full suite of solutions to address them.... Read More

  3. In the News Today - March 11, 2019

    March 11, 2019 | News

    New Report Documents Massive Spike in Food and Beverage Class Actions... Read More

  4. House Committee Holds Hearing On Potential Chemical Regulation

    March 08, 2019 | News

    The Environment Subcommittee of the House Oversight Committee held hearing on potential regulation of a substance that one chemist said "[l]awyers are trying to grab onto," Legal Newsline reports.... Read More

  5. In the News Today - February 27, 2019

    February 27, 2019 | News

    Securities Lawyer Calls for Consistent Standards in Event-Driven Litigation; Pet Food Recall Spurs Seven Class Actions in Four States in Three Weeks... Read More

  6. Containing the Contagion: Proposals to Reform the Broken Securities Class Action System

    February 25, 2019 | Research

    Record-high numbers of securities class action filings are swamping the protections that Congress created in 1995. In fact, the likelihood that a public company will be sued has never been greater, and the bulk of these lawsuits show the classic signs of litigation abuse. However, solutions are at hand. This research proposes regulatory and legislative action to contain the securities litigation contagion.... Read More

  7. In the News Today - February 25, 2019

    February 25, 2019 | News

    U.S. Department of Justice Objects to Another Class Action Settlement... Read More

  8. Risk and Reward: The Securities Fraud Class Action Lottery

    February 25, 2019 | Research

    Securities fraud class action lawyers are playing the "litigation lottery," filing often meritless cases against big companies on the off-chance of a big settlement. This research looks at all securities fraud class actions filed between 2005 and 2016 to reveal the true incentives that motivate plaintiffs' lawyers to roll the dice on these lawsuits, despite their high dismissal rate.... Read More

  9. In the News Today - February 12, 2019

    February 12, 2019 | News

    Settlement Rejection Shows Courts Are Hesitant to Approve Deals "Thin on Details But Rich in Attorney's Fees"... Read More

  10. In the News Today - February 8, 2019

    February 08, 2019 | News

    Surge in Food Labeling Lawsuits An Example of "Lawyer-Driven Litigation"... Read More