Class Action Lawsuits: Your Questions Answered

Class action lawsuits are one of the most powerful legal tools available to everyday consumers, employees, and investors. They give a voice to people who may not be able to stand up to large corporations on their own, but despite their importance, class actions remain widely misunderstood. 

If you've received a notice in the mail or seen a news story about a major class action and wondered what it means or whether you should get involved, we’ve got you covered.

At Morgan & Morgan, the Americas's largest personal injury law firm, we’ve helped thousands of people navigate these complex cases. This comprehensive guide answers your most pressing questions about class action lawsuits: what they are, how they work, and how they might affect you.

If you need more information about your specific case, just contact us for a free case evaluation.

What Is a Class Action Lawsuit?

A class action is a type of lawsuit filed on behalf of a group of people who have suffered similar harm or losses due to the actions of a defendant, often a corporation, government entity, or other large organization. Rather than each individual filing a separate lawsuit, the class joins together in a single case.

Common types of class actions include:

• Consumer fraud (e.g., deceptive advertising, hidden fees)
• Defective products (e.g., faulty cars, dangerous drugs)
• Employment violations (e.g., wage theft, discrimination)
• Data breaches and privacy violations
• Securities fraud (e.g., misleading investors)

The class action mechanism allows courts to efficiently resolve disputes that would be impractical or too expensive for individuals to litigate on their own.

Why Do Class Actions Matter?

Class actions level the playing field between individuals and powerful entities. When companies violate the law or cause widespread harm, class actions help:

• Hold them accountable
• Secure compensation for victims
• Prompt policy or product changes
• Deter future misconduct

Without the class action system, many wrongs would go unaddressed, especially those involving small-dollar losses that wouldn't justify the cost of a solo lawsuit.

How Do I Know if I’m Part of a Class Action?

If a class action is certified and you’re part of the defined group (or “class”), you should receive a notice by mail or email. These notices explain:

• What the lawsuit is about
• Who is included
• What your rights are
• How to file a claim or opt out

Even if you don’t receive a notice, you may still be eligible if you meet the class definition. That’s why it’s worth consulting a lawyer if you suspect you’ve been affected by an issue at the heart of a class action.

How Do Class Action Lawsuits Get Started?

Class action lawsuits typically begin when a group of people suffers similar harm from the same defendant, often a corporation, government agency, or large institution. But how does that shared experience turn into a formal lawsuit? Here's how class action lawsuits get started:

1. An Individual Comes Forward

Most class actions start with a single person, called the lead plaintiff or class representative, who realizes they’ve been wronged in a way that may also affect others. This person might be:

• A consumer overcharged by a company
• An employee denied overtime pay
• A patient harmed by a defective drug
• A customer affected by a data breach

They often reach out to an attorney, either on their own or after seeing a public call for affected individuals.

2. A Lawyer Investigates

Once contacted, the attorney will:

• Review the facts of the case
• Investigate the scope of harm (e.g., how many people might be affected)
• Determine if the issues are similar enough across individuals to support a class action
• Check for evidence (documents, contracts, communications, etc.)

If the issue appears widespread and legally viable, the lawyer may proceed to file a class action lawsuit.

3. A Complaint Is Filed in Court

The attorney files a civil complaint in state or federal court on behalf of the lead plaintiff. This complaint:

• Explains what happened
• Names the defendant(s)
• Outlines the legal claims
• Proposes a definition for the class (e.g., “all customers who bought Product X between 2020 and 2023”)
  
   

4. The Court Reviews the Case for “Class Certification”

Before a lawsuit becomes an official class action, the court must “certify” the class. To do this, the plaintiff must show that:

• Numerosity: There are too many people to sue individually
• Commonality: Class members share similar legal or factual issues
• Typicality: The lead plaintiff’s claims are typical of others
• Adequacy: The lead plaintiff and their lawyers will fairly represent the class

Class certification is a very important stage of the process. If the court denies it, the case may still proceed as an individual lawsuit, but not as a class action.

5. Notice Is Sent to Potential Class Members

Once the class is certified, notice is sent (usually via mail, email, or publication) to inform eligible people that:

• A class action has been filed
• They may be included
• They can file a claim, opt out, or object
  
   

6. The Case Moves Forward—Toward Settlement or Trial

After certification, the lawsuit proceeds like any other civil case:

• The parties gather evidence (discovery)
• They may negotiate a settlement
• If no settlement is reached, the case can go to trial

In the end, if there’s a favorable outcome, class members may receive compensation or other relief, often without ever stepping foot in court.

What Are Some Examples of Large Class Action Lawsuits?

Here are some notable examples of large class action lawsuits, cases that have resulted in significant settlements, widespread consumer impact, or major corporate accountability:

Tobacco Master Settlement Agreement (1998)

Major U.S. tobacco companies, including Philip Morris, R.J. Reynolds, and others, settled for $206 billion over 25 years.

One of the largest class action settlements in U.S. history, this case was brought by 46 U.S. states against tobacco companies for healthcare costs related to smoking. It led to sweeping changes in tobacco advertising and disclosure requirements.

 

BP Deepwater Horizon Oil Spill (2010)

BP (British Petroleum) settled for over $20 billion (civil and criminal penalties combined). After the catastrophic oil spill in the Gulf of Mexico, BP faced massive class action claims from businesses, fishermen, and residents whose livelihoods and environments were damaged.

 

Volkswagen Emissions Scandal (Dieselgate, 2015)

Volkswagen admitted to installing software that manipulated emissions data in diesel vehicles. The class action settlement ($14.7 billion in the U.S.) included vehicle buybacks, environmental remediation, and consumer compensation.

 

Enron Securities Fraud (2001–2008)

After the massive accounting fraud and corporate collapse of Enron, shareholders and employees filed class action suits alleging they were misled about the company’s financial health. The class action was settled for $7.2 billion.

 

Equifax Data Breach (2017)

After a data breach exposed the personal information of nearly 150 million Americans, a class action suit led to one of the largest data privacy settlements in U.S. history, offering free credit monitoring or cash payments. Equifax settled for up to $700 million.

 

Facebook Biometric Data Privacy (2020)

Facebook was sued under Illinois' Biometric Information Privacy Act (BIPA) for using facial recognition technology without users’ consent. With a settlement of $650 million, each eligible user received several hundred dollars.

 

Wells Fargo Fake Accounts Scandal (2016)

Wells Fargo employees created millions of unauthorized accounts to meet aggressive sales quotas. A class action settlement of $142 million compensated affected customers.

 

Apple iPhone Performance (Batterygate, 2020)

Apple was accused of secretly slowing down older iPhones to incentivize consumers to buy new ones. As part of the settlement, Apple paid iPhone users who experienced reduced performance.

 

Target Data Breach (2013)

Target settled a class action for $18.5 million to states and $10 million to consumers. A major data breach affected 40 million credit and debit card accounts. The settlement provided compensation for those impacted and led to stronger data security standards.

 

Johnson & Johnson Talcum Powder Litigation (Ongoing)

Thousands of lawsuits claim that Johnson & Johnson’s talcum powder products caused ovarian cancer. While not a traditional class action, many cases are being handled through multidistrict litigation (MDL), and mass settlements are expected.

What Does It Mean to Be a “Class Member”?

Being a class member means you are one of the individuals affected by the defendant’s conduct. You don’t need to hire your own attorney or attend court. In most cases, the case will proceed without your active participation, though you’ll benefit if the case settles or results in a favorable judgment.

However, you usually must file a claim or submit paperwork to receive compensation. If you ignore the notice, you may miss out on money you’re entitled to.

Who Represents the Class in a Lawsuit?

The class is represented by one or more lead plaintiffs (also called “class representatives”). These are individuals who have claims that are typical of the group and are willing to stand up on behalf of the rest.

They work with experienced class action attorneys who handle all aspects of the case: filing the complaint, gathering evidence, negotiating settlements, and going to trial if necessary.

Morgan & Morgan often serves as class counsel in these cases, meaning we represent the class as a whole, not just one person.

What Does It Mean to “Opt In” or “Opt Out”?

In many class actions, you’re automatically included unless you choose to opt out. This is called an opt-out class action, and it means you’ll be bound by the outcome (good or bad) unless you remove yourself from the case.

Reasons you might want to opt out:

• You want to file your own lawsuit
• You believe your damages are much larger than others in the class
• You disagree with the legal strategy

Some cases, like certain wage and hour lawsuits under the Fair Labor Standards Act (FLSA), require you to opt in to join the class and be eligible for any payout.

Your rights depend on the type of lawsuit, so always read the notice carefully or speak with an attorney.

How Much Money Can You Get From a Class Action?

How much you can get from a class action depends on:

• The size of the settlement or judgment
• The number of class members
• The nature of your losses
• Whether you filed a claim by the deadline

In some cases, members may receive a few dollars. In others, especially involving wage theft or defective products, the payouts can reach hundreds or thousands of dollars per person.

Class representatives sometimes receive a “service award” for their time and effort, which must be approved by the court.

What Happens if the Case Settles?

Settlements are common in class actions. If both sides agree to a settlement, the court will review it to ensure it’s fair, reasonable, and adequate.

Class members are then notified about:

• The terms of the settlement
• How much money or relief is available
• How to file a claim
• How to object or opt out

Once approved, claims are processed and compensation is distributed. This can take several months or even years, depending on the complexity of the case and the number of claimants.

Can You File a Class Action Lawsuit Yourself?

Technically, yes, but it’s extremely rare. Class actions are complex and require legal teams with the resources, experience, and scale to take on major corporations.

At Morgan & Morgan, we regularly represent lead plaintiffs and entire classes. If you believe you’ve been harmed by misconduct affecting a large group of people, contact us. We’ll evaluate your case at no cost and determine whether a class action is appropriate.

How Long Does a Class Action Lawsuit Take?

Class actions can take several months to several years to resolve. The timeline depends on:

• The complexity of the case
• The number of class members
• Whether the case settles or goes to trial
• Appeals and procedural delays

Even after a settlement is reached, it may take 6 to 12 months (or longer) to process claims and distribute payments.

Do You Have to Pay to Join a Class Action?

No. One of the biggest advantages of class actions is that you don’t pay anything upfront. Attorneys typically work on a contingency fee basis, meaning they only get paid if the case results in a settlement or verdict.

The legal fees and expenses are usually paid out of the settlement fund, not your pocket. This ensures that everyone, regardless of income, can participate and seek justice.

How Can I Find Out About Active Class Action Lawsuits?

You can check:

• The Morgan & Morgan website (we list current investigations and active cases)
• The U.S. District Court websites
• Legal news outlets and public databases

If you suspect wrongdoing but don’t see a lawsuit filed yet, reach out to us directly. Our attorneys can investigate and determine whether a class action is viable.

Are Class Actions Always Successful?

No legal action is guaranteed to succeed. But class actions have helped recover billions of dollars for consumers and workers in recent decades. Many companies settle rather than face the uncertainty and expense of trial.

Even when class actions don’t result in massive payouts, they can lead to meaningful changes in corporate behavior and stronger consumer protections.

Should I Choose Morgan & Morgan for Class Action Representation?

Class actions protect your rights. They ensure corporations are held accountable when they put profit over people. If you think you may be part of a class or you want to explore starting one, don’t hesitate to reach out.

At Morgan & Morgan, we’ve built one of the nation’s largest and most respected class action teams. With over $25 billion recovered for our clients, we’re not afraid to take on the biggest corporations, and we don’t back down.

Whether you’re responding to a class action notice or think your situation might warrant one, we’re here to help.

Contact us today for a free, confidential case evaluation to learn more.