In its annual report, C.R. Bard noted that as of February 25, 2008, nine putative class action lawsuits had been filed against the company for a variety of claims related to the Bard® Composix® Kugel® Mesh Hernia Patch recalled by its subsidiary Davol, Inc.
It seems that not a week goes by that we don’t hear of a class action lawsuit against one company or another. What exactly is a class action lawsuit, and why is it so popular?
Defining a Class
When a group of people have the same claim against a defendant, they can combine their claims into a single lawsuit and be represented by one attorney or law firm. Many consider this to be a class action lawsuit, but it’s not.
A lawsuit is not considered a class action unless the attorney specifically requests class action status. That request turns the case into a putative class action, which means it is pending the court’s approval.
Designating the suit as a class action hinges on defining who belongs to the class of plaintiffs. In a recent case against a major credit card company, the class was defined as any customer who held a credit card from the company between two specific dates and had carried a balance over from one month to the next at least once during that period.
Certifying a Class
Until a class is certified by the court, anyone in the class can hire their own attorney and bring their own case against the defendant, or band together with other plaintiffs and hire an attorney to represent them as a group. What creates a class action is when members of the class are automatically included in the class action case without them hiring legal counsel.
Class action cases are designated as opt-in, opt-out, or mandatory.
In the opt-in version, plaintiffs are able to choose whether they want to become part of the class action case or not. If they choose not to opt in, they can still bring their own lawsuit or combine with other non-opting members of the class to jointly bring a case.
In the opt-out version, all members of the class are automatically included in the lawsuit unless they formally opt out by notifying the court within a specific time frame.
In the mandatory version, individuals belonging to the defined group do not have the right to opt out. All will be represented in the class action whether they care to or not, and they cannot file separate individual or joint claims.
Benefits of Class Action Status
For Plaintiffs
The primary benefit for plaintiffs whose individual claims are relatively small but whose class is large in number is that class action status allows them to notify other people in similar circumstances and combine their small individual cases into one case large enough to afford competent legal representation. Our legal system supports this type of action as a way to deter wrongdoers who take unfair advantage of the masses in such a small way that it is not worth any individual’s effort to sue for recovery alone.
Another consideration is that when almost identical cases are filed individually, plaintiffs in similar situations may obtain vastly different results depending on the court and the attorneys involved. Cases filed later may be able to get larger awards because more has been discovered about the defendant’s actions in earlier trials. In some situations, the opposite occurs. The substantial damages awarded to the early cases exhaust the company’s resources leaving those filing later claims unable to recover anything.
Sometimes differences in awards can simply be a matter of differences in jurisdiction and not in the merits of the case. In a class action, however, the award to plaintiffs may be more or less than it might have been in individual trials, but it will be equitable for everyone.
For Defendants
For defendants, consolidating thousands of individual cases into one large case can also potentially reduce their legal expenses and financial liability. When cases are filed individually, the potential exists that a few cases could result in massive damage awards that taken together can bankrupt the company. Some defendants believe that when the court sees the overall magnitude of the claims, the total damages assessed may be more reasonable with respect to the company’s resources.
For Lawyers
It should be noted that for lawyers, class action lawsuits create cases with potentially lucrative attorney fees where no cases would have been economically feasible otherwise. For example, in the credit card case cited earlier, each of the hundreds of thousands of plaintiffs received less than a $10.00 refund for alleged overcharges while the law firm leading the suit received many hundreds of thousands of dollars in legal fees.
To be fair, however, it should also be noted that the credit card company who, just one dollar at a time, had collected millions of dollars in unjustifed fees from unsuspecting customers was effectively detered from ever taking such advantage of customers again, along with other companies who were paying attention to the total cost of the damages assessed.
Disadvantages of Class Action Status
For Plaintiffs
Courts do not grant class action status automatically because it creates a situation in which the plaintiff is represented by an attorney he or she did not hire. One of the criteria for granting class action status is that the commonality of the issues involved in each case must be much greater than the differences involved. If the individual cases are more different than similar, they should proceed to trial individually so that each plaintiff receives just compensation given their circumstances.
For Defendants
Some defendants oppose the certification of a class action in the belief that it will encourage more people to file claims resulting in the payment of more damages.
Also, lacking the ability to challenge each plaintiff individually, the defendant may have a difficult time raising a claim that some members of the class have been included arbitrarily even though they have actually suffered no harm.
For Lawyers
Plaintiffs’ lawyers can lose control of a case when their clients are included in a class action. Even if their clients are able to opt out of the class action suit and bring their own claims, the existence of the class action can affect the outcome of their individual cases.
Kugel Patch Lawsuits
Are Kugel patch lawsuits likely to be granted class action status? There are several thoughts.
First is that the injuries suffered by different plaintiffs are all unique, and therefore the plaintiffs cannot be treated as a class. The facts, degree of injury, and damages have to be determined individually in separate trials.
On the other hand, there may exist a certain class of plaintiffs who are all similarly situated. These are the patients who were implanted with a Kugel patch that was later recalled, and who have not yet suffered any physical injury. According to the C.R. Bard annual report, some of the putative class action lawsuits are seeking medical monitoring in addition to an award of monetary damages. This is consistent with a class of plaintiffs who have not yet been injured.
Ultimately, the answer is that some lawsuits may be granted class action status while other cases will no doubt be allowed to proceed individually.
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