Business Law & Commercial Litigation
By the Business Attorneys at Smith & Garg, LLC, serving The Woodlands, Spring, Houston, Conroe, Humble, Kingwood, Tomball, Cypress, Huntsville, Westchase, Southwest, Sugar Land, West Oaks, Alief, Memorial, River Oaks, Stafford, Katy, and Missouri City.

Class Action Lawsuits

Where there are many plaintiffs and one defendant, a class action lawsuit may ensue. Most often, the plaintiffs are from multiple jurisdictions. In an ordinary lawsuit there is usually but one plaintiff and one defendant. In a class action, one plaintiff represents a group of plaintiffs that are similarly situated with same or similar damages claimed against one or more defendants.

If a class action lawsuit has been filed against you, it can be a daunting task to manage it. A bad result in a class action suit can mean a multi-million dollar award and bad publicity for the defendant. This is precisely why it is imperative to seek counsel from a Houston class action lawyer.

Class actions can be brought at the Federal or State level. Texas law tracking Federal law in places dictates that there are four prerequisites to class certification which must be met by the party seeking class certification and which closely track federal class requirements. First, the class must be of a size that joinder of all the parties is impractical. Factors used by courts to consider class size are: the number of claimants, the amount of the claims, the location of the class members, and the ability of the individual members to bring the cause of action on his own and the likelihood that he would do so.

Secondly, under Texas law, the members of the class must have questions of law or fact that are common. To fight this element, a defendant must demonstrate that it could assert a defense against some, but not all, of the members of the class. Challenges to class certification on this platform are not always successful. Courts can determine that class certification will not impair the defendant's ability to use the appropriate defenses, and that the defendant will not be harmed by having to defend a class as opposed to individual suits.

Third, the claims or defenses of the class representative must be typical of the class. And, fourth, the class representative is able to protect the interests of the class members fairly and adequately. Because the representative must speak for all class members not named in the suit, the court must be assured that the class representative shares their interests in a sufficient manner in order to advocate for them.

After a determination of class status has been made, under Texas law, the court then must determine if a class action may be maintained. The court must determine whether the denial of the class action would prejudice the class or non-class members. A defendant also could be prejudiced by the denial of certification, in that a defendant would be required to respond to each individual claimant, a likely much more expensive proposition. If the suit is for injunctive or declaratory relief, this could be a second ground for maintaining a class action. In cases that involve environmental issues, the class is seeking to enjoin the defendant’s behavior affecting the class.

A third ground for maintaining a class action in Texas is that the litigated issue concerns specific property. The most common, ground for granting a class certification is that the common questions of law or fact in the case shadow over or predominate the class members and class action litigation is better than other methods for the fair and efficient resolution. This is a two-part test that parallels the Federal Rule for "predominance" and "superiority." Here, the courts consider the extent and nature of any individual lawsuits about the same issues that are currently ongoing. The court also considers the difficulty of case management as well as the benefit of bringing all parties together in one court. Lastly, the court will consider the class members’ interest in personally controlling the prosecution or defense of separate cases.

Courts will generally award the prevailing party attorney fees based on a formula. The court will determine the different rates of each attorney who worked on the case and multiply that by the number of hours worked on the case. It is crucial that your class action business lawyer keep detailed billing information in order to substantiate the claimed attorney fees.

A current example of a high profile class action sub-prime lending lawsuit is Andrews v. Chevy Chase Bank wherein the Andrews claimed that their home loan violated federal lending laws and warranted a “rescission,” or cancellation. The class was certified in 2007 and the certification is now on appeal in the 7th Circuit. Another noteworthy class certification that has recently been overturned on appeal is the case of 50 million, yes million, putative plaintiffs asking for $800 billion in damages, against tobacco companies including Altria Group, Lorillard and R.J. Reynolds claiming that the cigarette makers deceived them into believing that light cigarettes were healthier than full-flavored cigarettes. The judge at the trial court level certified the class, but on appeal the 2nd Circuit decertified the class.

Defending against class actions is not only expensive, but time consuming. If you have been sued in a class action, it is imperative that you act fast and seek counsel from a Woodlands class action lawyer.

Call Smith and Garg today at 281.210.0010 or complete our Contact Form and let us assist you with your business law services and litigation needs.