Working for Justice

Class Actions 101: the Xs and Os

Posted December 20th, 2018 by Andrew Melzer in Class Actions and Collective Actions.

You can learn a lot from a sports blog.  Including, oddly enough, the purposes of class action lawsuits.

Last month, while browsing the latest news on one of my favorite sports teams, I unexpectedly came across a dialogue on the NHL concussions lawsuit and settlement. See NHL Players Concussion Injury Litig., No. 14-md-2551 (D. Minn.), tentatively settled in the wake of a much larger settlement in In re NFL Players Concussion Litig., No. 12 md-2323 (E.D. Pa.). This evolved into a philosophical discussion on class actions; and the skeptics in the group quickly received an impromptu primer.

To paraphrase, the general question posed was: What is the value of class actions? Don’t they just benefit the lawyers?

Unsurprisingly, this is a sentiment echoed by conservative-minded jurists and politicians, who have sought to make “class actions” a dirty word.

Here are a few of the answers posted on the message board:

“The argument in favor of class actions is that a defendant’s conduct might be injuring a lot different people in small ways. Individually, it may not be worth it for a particular person to bring suit, but collectively there is a lot of harm incurred. In addition, an individual may not have the resources to pursue a case on their own.”

“[T]he aggregated claims of many people also can impose enough liability on a company that it actually matters and could cause a change in behavior and serve as a warning to anyone else who might do the same thing.”

“Also lawyers can’t afford to litigate thousands of individual claims with small payouts in even the best of circumstances. So they won’t take these cases. And even if they did, the NHL would know that they could just delay and wait them out until they couldn’t afford to proceed. There are a million ways to delay a legal proceeding if you’ve got the resources. So class actions help to get justice for people who otherwise wouldn’t have access to the legal system.”

These commentators have it right.

I have previously summarized the purposes of class actions for a legal audience:

“Class and collective actions serve several essential purposes. First, they promote efficiency and judicial economy by permitting common questions affecting a significant number of parties to be resolved in a single proceeding. Second, they allow plaintiffs to achieve economies of scale and enable them to file cases that otherwise could not have been brought. And, when a violation is established, class actions permit a broad remedy on behalf of all of the victims of a particular practice. Finally, they can exert a deterrent effect that prevents violations in the first place. In these ways, class actions facilitate enforcement of the law.”

E.g., Amchem Prods. Inc. v. Windsor, 521 U.S. 591, 617 (1997) (citing Mace v. Van Ru Credit Corp., 109 F.3d 338, 344 (7th Cir. 1997)); Hoffman-LaRoche v. Sperling, 493 U.S. 165, 170 (1989); Richard M. Meyer, The Social Utility of Class Actions, 42 Brooklyn Law Review 189 (1975).

These purposes apply with considerable force to retired professional athletes with a powerful player’s union behind them. But they are even more pronounced in cases involving ordinary employees, tenants, consumers, and other victims of corporate or institutional misdeeds. Class actions enable individuals with modest-sized claims to obtain meaningful remedies when their rights are violated. Claims may be too small or expensive to be litigated individually; or, individuals may be too fearful of retaliation to come forward and pursue their own suits. Class actions also help hold wrongdoers accountable and can bring about concrete change.

For example, our gender discrimination class actions have often resulted in extensive revisions to employers’ policies and procedures. These changes are designed to make the workplace a fairer place and achieve a level playing field for all employees.

As highlighted by my fellow sports fans, class actions are a valuable tool for justice. They enable individuals to shed light on harmful institutional practices that might otherwise remain shielded from scrutiny.

Andrew Melzer is a partner in the New York office of Sanford Heisler Sharp. Mr. Melzer is Co-Chair of the Firm’s wage and hour practice and has helped return millions of dollars of lost wages to employees in presuit negotiations, active litigation, and trials.
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