A class action is a type of lawsuit that permits one or more plaintiffs to file and prosecute a lawsuit on behalf of a larger group, or “class “. Class-action lawsuits represent groups of individuals who may be customers, employees, investors, or patients with a similar legal claim against one or more defendants.

Lawsuits are certified as class actions by courts with jurisdiction if they meet the criteria set forth by RULE 23 of the federal rules of civil procedure.

The criteria include:

1. a class so numerous that joinder of all members is impracticable;
2. common questions of law or fact among the class members;
3. claims or defenses of the representative parties that are typical of the class; 
4. representative parties who will fairly and adequately protect the interests of the class.

Benefits of pursuing a class action:

• Greater Judicial effeciency: It is often more efficient for a court to resolve one large case as a class action rather than hearing hundreds or thousands of individual cases.
• Economies of scale: Sometimes, claims with small individual damages are not feasible as individual lawsuits. A class action allows a group of small claimants to take on a large defendant, providing a way for multiple individuals to challenge a powerful entity together.
• Any recovery received is equitably divided: Which can be significant when a defendant has limited funds available to satisfy the claims tf the class members 
• Avoid inconsistent judgments : that can occur when multiple claims that are similar are litigated separately in individual courtrooms across the country.

Disadvantages:

• If the plaintiff’s attorney does not argue effectively or the class representatives do not have strong claims then the legitimate claims of other class members can be hurt. If the class is unsuccessful in their lawsuit then individual class members likely do not have the right to bring individual lawsuits at a later date.
• Lack of decision making control. Class action lawsuits are, by definition, representative rather than group litigation.That means that representatives of the affected class make the important litigation decisions – including when to settle.
• Cases almost always settle for financial compensation, coupons for future services or rebates only. If a plaintiff is seeking other types of compensation than this can be problematic.

Types of Class Actions:

Certain types of cases make for good class actions, it’s the type where the evidence or the facts are basically the same for all of the people involved for example: a defective car or product; everybody who bought that product basically has the same case so they’re gonna use the same evidence, the same witnesses, the same documents to prove their case, another example would be a wage and hour case where people aren’t paid overtime.

Successful class action cases often result in hefty pre-trial settlements. The lawsuit Enron shareholders filed after the company’s collapse resulted in a $7.2 billion settlement.

 Another famous class action was the product liability case filed against Toyota for faulty brakes. It resulted in a costly recall and over a $1 billion settlement.

Civil rights class action cases typically involve requests for legal remedies, instead of claims for payment. One of the most famous civil rights class actions is the Brown vs. Board of Education case the Supreme Court decided in 1954, which struck down school segregation as unconstitutional. These types of class actions may now face greater legal restrictions than previously.

The largest class action settlement was that of the Tobacco Master Settlement Agreement in 1998, which resulted in a $206 billion payout and a $9 billion per year perpetuity.

Class action lawsuits can fail or be dismissed for various reasons, such as insufficient evidence, failure to meet legal standards, or procedural issues.

We can take as a way of example the Amazon ‘BUY BOX’ class action ( the action was claiming that amazon was using a biased algorithm for its Buy Box feature to boost its profits and keep prices high for consumers) that was dismissed by a Washington federal judge.

First, the judge dismissed the  initial version of the class action lawsuit in July 2024, finding that the pair of consumers behind the complaint failed to include details about the items they allegedly overpaid for due to the Buy Box. This was the first dismissal before the revised complaint was filed and ultimately dismissed again for failing to provide enough evidence to prove that a reasonable consumer would be tricked into thinking that the Buy Box ( the area where a product’s purchase option is displayed) on the company’s marketplace always shows the lowest price for an item.