Class Action Law

The laws concerning how federal class actions in the United States are handled can be found in the Federal Rules of Civil Procedure under 28 USCA § 1332(d). In addition to cases concerning federal law, any civil case with an amount in controversy that is over $5 million falls into the federal jurisdiction. Because of this, the amount in controversy of a case is frequently called the jurisdictional amount. Other class actions that are in the federal jurisdiction include the following:

  • Class actions with any plaintiff residing in a state other than that of the defendant
  • Class actions with any plaintiff who is a citizen of a foreign country and with a defendant who resides in the U.S.
  • Class actions with plaintiffs that are foreign governments or state governments other than the defendant’s state government

Class actions including plaintiffs from a number of states can only be brought into the federal jurisdiction when each plaintiff has a common legal issue. These cases can be difficult to bring to federal court when the civil laws of the plaintiffs’ states are drastically different from each other. However, cases that do meet these standards are allowed to be consolidated with similar cases filed in other jurisdictions. When this is not possible, a state court may allow plaintiffs from other states or countries to be included in the class action without a change of jurisdiction.

Attorneys filing class action suits typically try to keep the cases under state jurisdiction because federal courts are widely believed to favor the defendants. For this reason, most cases are filed with state courts and are later transferred to federal courts.

Procedures for a federal class action begin with similar complaints collected from multiple people against the same entity. An attorney will then propose that the potential plaintiffs be organized into a class. However, for a class action to be filed in federal court or in one of the 35 states adopting the same procedures, it must meet the following conditions:

  • One or more legal claims must be common to each plaintiff in the class.
  • The class’s attorneys must be acting in the best interests of plaintiffs.
  • The class must be large enough to make individual cases impractical.
  • The complaints and defenses must be of a typical nature.