Medical Malpractice

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Class Actions

Class actions are a type of lawsuit through which persons whose claims may not be large enough to justify the expense of a single lawsuit can join to file a suit on behalf of all persons similarly affected. They have been used in consumer cases, biomedical implant cases, pharmaceutical cases, employment discrimination and failure to pay requisite overtime cases, etc.

Class actions are allowed by both the Texas and the federal rules, and have their roots in ancient courts of equity. However, the criteria for being able to pursue a class action suit are strict. As the Texas Supreme Court has recently observed, "[w]hen properly applied the class action device is unquestionably a valuable tool in protecting the rights of our citizens." Southwestern Refining Co., Inc. v. Bernal, 22 S.W.3d 425, 439 (Tex. 2000). However, there is no "right" to litigate a lawsuit as a class action. Rather, the trial court has discretion in deciding whether a claim should be allowed to be pursued as a class proceeding. However, while the trial courts enjoy a broad range of discretion in determining whether to maintain a lawsuit as a class action, they may not consider the substantive merits of the class claims in making a determination. In other words, in determining whether a class should be certified, the court should not be concerned with the likelihood of the claim prevailing if tried.

The Texas Supreme Court has admonished that the trial courts should take: "a cautious approach to class certification...." The Court continued to explain that "[c]ourts must perform a 'rigorous analysis' before ruling on class certification to determine whether all prerequisites to certification have been met." Bernal, 22 S.W.3d at 435. The issues in a certification determination are whether:

(1) the class is so numerous that joinder of all members is impracticable;

(2) there are questions of law or fact common to the class;

(3) the common issues predominate over issues affecting individual class members;

(4) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and

(5) the representative parties will fairly and adequately protect the interests of the class.

A determination on certification is not irreversible, and the trial court may alter, amend, or withdraw class certification at any time before final judgment. However, once a class is certified, the court must then take steps to administer the case as a class action. In Texas, this means directing notice to the class members of the pendency of the class action and other matters affecting their rights. In a Texas state court class action, the notice must advise the class members: "that the judgment, whether favorable or not, will include and bind all members who do not request exclusion by the specified date." Once a class action is certified, it may not be dismissed or compromised without the approval of the court, and notice of any such dismissal or compromise must be given to all class members in a manner directed by the court.

When a class action is settled, unique procedural safeguards come into play. The Texas class action rule requires that, before a trial court can dismiss a class action pursuant to a settlement, the court must examine both the substantive and procedural aspects of the settlement to determine: (1) whether the terms of the settlement are fair, adequate, and reasonable; and (2) whether the settlement was the product of honest negotiations or of collusion. Also, adequate notice must be provided to the class members of all of the material terms of the proposed settlement, including specific information regarding the projected amount of attorney's fees. The trial court must hold an evidentiary hearing to determine the fairness of the proposed settlement. Once the court is satisfied that the terms of the settlement are fair and that adequate notice has been provided to all class members, it may enter an order approving of the settlement.

If you have been damaged by a drug, product, discriminatory employment practice, or consumer transaction, you may be an appropriate representative of a class, even if your individual claim would seem unlikely to justify the cost of a lawsuit. You should consult competent legal counsel as soon as possible.