Monday, February 25, 2013

All about Class-Action Lawsuits

     Class-action lawsuits are mostly an American phenomenon, having originated in the United States.  They seek redress, mostly, for civil rights violations.  Very often it is consumer rights organizations which instigate lawsuits against a large company, or group of companies, to obtain compensation for damages that have resulted from false advertising or deliberate withholding of vital information.
     One example is the 2006 landmark lawsuit in which big tobacco companies were convicted, on charges of fraud and racketeering, for misleading Americans about the health risks of smoking, and for marketing cigarettes to children.  An appeals court unanimously upheld the lower court's decision, in which Judge Kessler argued in a 1,683-page opinion that tobacco companies had been deceiving the public for fifty years, to maximize corporate profits.  This case had been filed by the Department of Justice against tobacco companies, but six public health organizations became parties in the suit.  In 1998, a Master Settlement Agreement, required tobacco companies to pay $206 billion over 25 years to compensate states for costs of tobacco-related illnesses.  In 2006, additional remedies were imposed on the tobacco companies, including restrictions on advertising, mandates for labeling, and requirements that the companies report marketing data to the government.  This case went all the way to the Supreme Court, and was upheld. 
     What about class-action lawsuits against the federal government?  Such cases are possible, if they can override sovereign immunity protection, and if there is enough commonality among the plaintiffs, across state lines, for the suit to be potent.  Many class action suits are sought within a single state, as state courts are considered to be more sympathetic toward plaintiffs, compared with federal courts.
     Our lawyers tell us that we don't have enough commonality to file a class-action suit against the government, unless the facts can be contained within one state.  In three of the raids, the FBI agents haled from Texas.  If all five raids were overseen by agents in Texas, we might have grounds for a class-action suit in Texas.
     But,, as I research the requirements for class-action lawsuits, it seems to me that we do have enough commonality to consolidate a group case, although whether it's advisable to file a class-action suit is debatable.  Here's what Wikipedia's experts say:

The procedure for filing a class action is to file suit with one or several named plaintiffs on behalf of a proposed class. The proposed class must consist of a group of individuals or business entities that have suffered a common injury or injuries. Typically these cases result from an action on the part of a business or a particular product defect or policy that applied to all proposed class members in a typical manner. After the complaint is filed, the plaintiff must file a motion to have the class certified. In some cases class certification may require discovery in order to determine its size and if the proposed class meets the standard for class certification.
Upon the motion to certify the class, the defendants may object to whether the issues are appropriately handled as a class action, to whether the named plaintiffs are sufficiently representative of the class, and to their relationship with the law firm or firms handling the case. The court will also examine the ability of the firm to prosecute the claim for the plaintiffs, and their resources for dealing with class actions.

     The stumbling block for us as plaintiffs is that we might not qualify to be certified as a class.   "A class-action by a group of people who have suffered similar harm from similar actions of a particular defendant," says the website of Heygood, Orr & Pearson.  Our problem may be that the "particular defendant" happens to be the government, and we can't sue the government because it has sovereign immunity.  The FBI agents are all different people, and therefore wouldn't fit the criterion of "a particular defendant."  And they come from different states, confounding a claim within a state.
      In a class-action lawsuit one or more representatives stands in for the entire group.  "The claims of the class representative must arise from facts or law common to all class members," the Heywood lawyers go on to explain.  Class certification requires that plaintiffs persuade the court that a class action is warranted, and to define the scope of the class.
     Our "class" would be all individuals and companies who have been raided by the FBI and believe that in the execution of the raid their constitutional rights were breached.  The "representatives" would be the five of us, as company owners and plaintiffs against the government.
     Our lawyers don't think we'd be granted certification for class status;  moreover, it may actually weaken our case to attempt to represent the thousands of individuals whose rights were violated in raids similar to ours, especially if those individuals didn't want to press charges against the government, for fear of retaliation.
     (One employee told me, "I don't want to participate in a class-action suit, because it will trigger an IRS audit, or invite government harassment...."  Such fear  is common, and serves as a barometer for the trust Americans feel toward our government.  A January, 2013 national survey by the Pew Research Center showed that 73% of Americans said they don't trust the government, while only 11% said they do.  When I gave this statistic to my mother, who has great faith in authority, she interjected with uncharacteristic vehemence, "I don't trust our government at all!  Not one bit!" and told me that corruption at the local level has reached new highs.  But Congress has also lost favor with the public, whose confidence in lawmakers dropped from 67% in 1985 to 23% in 2013.)
     What might we five plaintiffs expect as a class, a group, or as individuals, if we file a lawsuit against the government or its officials?
     First, the government is likely to file a motion right away to have the case dismissed, saying we plaintiffs don't have a legitimate case, or haven't named the crime.  Then, our lawyers will give the facts supporting our lawsuit and show why it's justified.
     Second, if we file a class-action lawsuit, we'll be subject to the criteria imposed for class designation.  Heygood lists these as follows:
  1. Numerosity: the plaintiffs must show that “the class is so numerous that joinder of all members is impracticable.” While there is no set minimum number of class members, typically courts will require at least 100 members in order to satisfy the numerosity requirement. The plaintiffs must also show that class members must be identifiable through the use of specific criteria or information.
  2. Commonality: the plaintiffs must show that there are questions of law and fact that are common to the claims of each class member. The commonality requirement is satisfied where the party opposing the class has engaged in some course of conduct that affects a group of persons and gives rise to a cause of action.
  3. Typicality: the class representatives must show that their individual claims are “typical” of the claims of the various class members. Typicality exists where the representatives’ claims arise from the same event or course of conduct that gives rise to the claims of other class members and the claims are based on the same legal theory.
  4. Adequacy: the plaintiffs must show that they will fairly and adequately protect the interests of the class. To make such a showing, they must typically demonstrate that they have the willingness and ability to take an active role in and control the litigation in order to protect the interest of the absentee class members and that their attorneys will act with the necessary zeal and competence.
          Next, if we get class status, the government's lawyers will appeal the decision, taking it to a higher court, thereby stalling the case.  If class status is upheld, we can move on with discovery, taking depositions, getting access to affidavits, and deposing experts.  At this point the government is likely to object again, alleging that we don't have the facts right, or have overlooked a detail in the law that protects its agents from being sued.  This is called a "summary judgment motion," a common method to delay or obliterate a case.  A judge must decide, based on the documents, whether the government's motion to drop the case has merit.  If not, the case proceeds.
     If the case goes to trial and wins, the government's defense lawyers would appeal the decision, taking it to a higher court.  Or, if the court rules against us, we have the option of requesting appellate review, too.
     Finally, the case is settled at a higher court--maybe the Supreme Court, if the merits of the case remain in dispute, and the issues are important enough.
     Class-action suits are useful because they consolidate hundreds or thousands of similar cases into one, saving court time, and allowing for conformity of decisions.  But since the defendant in our case is the government, specifically the Department of Justice and Eric Holder, we may be blocked from pursuing class-action status because of inherent obstacles to suing the government.
     Class-action lawsuits are usually cases about pharmaceuticals (Vioxx, Phen-Fen), oil spills (BP Gulf, Exxon Valdez),  product liability (tobacco, silicone breast implants), financial products (Enron, DeBeers diamonds), or natural disasters (Hurricane Katrina).  But the Class Action Fairness Act passed in 2005 (via heavy lobbying by corporations) makes it less likely that plaintiffs like us will win cases, because it forces cases to be transferred to federal courts, where the corporations being sued tend to be favored by judges, as opposed to state courts, which are known to rule in favor of plaintiffs.
     Litigation of class-action suits is expensive for big companies, so they're likely to settle cases before they go to trial.  But a case against the government is a different animal:  the government has deep pockets, and doesn't have to worry about the costs of litigation.  Its agents and prosecutors can delay and deny charges indefinitely, if there are mechanisms for doing so.  What the government does have to worry about, given its bad public ratings, is publicity that casts it in an even worse light.
     Therefore, it may behoove us as plaintiffs to notify all major media organizations about our claim, if we move forward with a lawsuit, class-action or otherwise.  Getting The Wall Street Journal or The New York Times to write a story about invidious government raids when a business doesn't pose a real threat to national security, or about the use of Gestapo techniques to obtain paperwork from solo family doctors' offices, or the extravagant waste of taxpayers' money to attack hapless civilians, for the purpose of getting paperwork from them...that's a story Americans need to hear, and one that might change how the FBI and its DOJ parents run their show.


  1. Did you see this one? Everything is a crime now:,0,3220328.story

  2. Check out a new article in the margin of my blog...I labelled it "Government extortion of doctors" because it describes the case of a 20-year cardiothoracic surgeon who was put in jail for a coding and documentation question. He can't practice medicine, and is doing time, for a clerical error, that's how bad the government prosecutors are, under Eric Holder, as they make every attempt to penalize physicians and extort money for the half-bankrupt Medicare system. The doctor did the surgery, but the coding and documentation rules are like hieroglyphics--fix the billing system, don't incarcerate doctors!