Class Action Lawsuits
If a large number of consumers are injured as a result of an allegedly
defective product, the principal issue will be whether the product caused
the injury. Some examples of class actions are those brought against the
manufacturers of allegedly defective or hazardous products, such as asbestos,
certain vaccines, Agent Orange, tobacco, and breast implants. Only then
will the question of how badly each party was injured be heard.
Class actions may also be brought on contracts. For example, all customers
of America Online could claim damages when it went to its $19.95 per month
rate - with inadequate capacity to handle the increased traffic.
Another frequent field for class actions is securities claims. For example,
suppose a company issues an allegedly false press release and the stock
goes from $10 to $15 but when the truth comes out the stock falls to $6
per share. A class action could be brought on behalf of all the stockholders
who purchased shares after the company issued deceptive news and before
the truth came out. Each member of the class allegedly suffered some harm
as a result of the alleged wrong. The damages each member of the class
will vary - someone who bought 1,000 shares at $15 each would be 10 times
more impacted than a person who bought 100 shares at $15, but the critical
issue is whether the press release was deceptive, and that is common to
all class members.