The Importance of Allowing Class Actions

In one of the first class actions in which I was ever involved we sued an insurance carrier that had a policy which cheated its insureds out of fairly small amounts.  During discovery we turned up a memo that discussed bonuses to the employees with the slogan “A penny a patient.”  The idea was that, since the insurance carrier had over 20 million patients, if it could find a way to save (cheat) the patient out of one penny, that saved the company $200,000.

Of course who’s going to fight with a major insurance carrier over one penny?  No one.

The purpose of a class action is to allow a large group of people with small claims to hold an entity accountable when it would otherwise be impossible for a single individual to do so.   As our federal court recently noted, “The most compelling rationale for finding superiority in a class action is the existence of a negative value suit.  A negative value suit is one in which the costs of enforcement in an individual action would exceed any individual recovery.”  Pfaff v. Whole Foods Market Group, Inc. (2010) WL 3834240.

In the most recent class action that we handled each of the plaintiffs will receive an average of $1,000 apiece.  There is simply no way that any one individual could have prosecuted an action for four years, and invested the time and money that was necessary to pursue that claim, if all they would have received is $1,000.  As our California Supreme Court has indicated, “Courts long have acknowledged the importance of class actions as the means to prevent a failure of justice in our judicial system...  By establishing a technique whereby the claims of many individuals can be resolved at the same time, the class suit both eliminates the possibility of repetitious litigation and provides small claimants with a method of obtaining redress...” Sav-On Drug Stores, Inc. v. Superior Court (2004) 34 Cal.4th 339, 340.

Historically, claims of large numbers of absent class members have presented difficulties because it has been difficult for the parties to have direct contact with their attorneys.  However, by use of the internet it is now possible for large numbers of the class to keep in contact with their attorneys, both to provide assistance and to allow the attorneys to keep the class members up to date regarding the status of the case.   Now, in each of the cases in which The Janssen Law Firm is involved, we set up an internet site so that we can share information with the class members and so that, in turn, they can share information with us.  The assistance of class members in cases in class actions cannot be overemphasized.   It is your case and you have the right to updated regarding its status.

Tags: