Class Action Lawsuits

Class Action Lawsuits

As a personal injury and medical malpractice lawyer who handles invasion of privacy claims and lawsuits arising out of HIPAA violations, I am occasionally asked about the potential for filing a class action against hospitals or other entities that are the victim of a date of breach. Class action lawsuits have become disfavored in the law and, therefore, it is more difficult to have a class “certified” so that a class action can go forward. Following is a discussion of some of the considerations involved in class action litigation.

Generally, in order for a class action lawsuit to proceed, the lawyers representing the plaintiffs must prove that certain core issues in the lawsuit impact all class members equally. In addition, there must be a uniformity of injury. In this way, a single lawsuit can resolve multiple claims. However, if the plaintiffs have variable or diverse damages, a class action is not the appropriate vehicle for resolution of those various claims. Many claims that might otherwise be amenable to a class action are subject to arbitration clauses which specifically deny consumers the right to proceed with a class action.

The classic case for a class action is a deceptive consumer sales practice that affects multiple consumers equally. For example, if an insurer overcharges all of its insureds an equal amount or a service provider imposes a “service charge” that was not part of the originally quoted price, each of the individuals impacted by the altered price will suffer the exact same injury in the exact same way.

In many instances, however, the injury suffered by individual consumers is individualized and therefore not subject to class action litigation. For example, if individuals experience personal injury or severe emotional distress, the valuation of each individual’s injury will be varied and therefore not subject to class action litigation. In some instances, the uniformity of injury can be debated. For example, in the Equifax data breach cases, each of the individuals whose data was hacked incurred the cost of monitoring for identity theft. This harm was deemed to be sufficiently uniform for the class action. In the settlement of those claims, a pool of funds was designated for reimbursement of consumers’ personal time spent in monitoring their credit reports, checking accounts and credit cards for unauthorized activity. In addition, another pool of funds was set aside to pay for professional monitoring of these consumers’ credit.

In other cases, where damages are variable, a similar litigation mechanism can be employed to simplify the litigation and speed up its resolution. So-called Multi-District Litigation (MDL) is like a class action in that many cases are combined for resolution. MDL litigation is popular for defective medical devices and dangerous drugs. Although the individuals harmed by medical device manufacturers or pharmaceutical companies may have different injuries that are not subject to a class action, they may be similar enough that the claims can be resolved in one massive litigation.

Generally speaking, class actions are not used in the setting of medical negligence, nursing home abuse, nursing home neglect, car accidents, truck accidents, workplace accidents, or other serious personal injury or wrongful death cases where the damages and the underlying fact pattern is unique.