Every day, people place their trust in businesses and corporations, relying on these entities to honestly represent their services and/or products. Unfortunately, however, the reality is that businesses and corporations often violate consumers’ trust and, in doing so, cause consumers’ financial and/or physical harm.
While this can be as distressing as it may be devastating, class action lawsuits can give people the opportunity to pursue justice and hold negligent corporations, businesses and other entitles accountable. By banning together with people who have the same or similar claims against the negligent entities that have caused them harm, these individuals can effectively get on the path to justice and compensation.
At Chappell, Chappell and Newman, our Columbia attorneys have extensive experience litigating various types of class action cases and helping groups of plaintiffs succeed in their financial recovery. Our lawyers are dedicated to defending our clients’ rights, and they have the skills and experience necessary to bring even the most complex class action cases to successful resolutions.
The Class Action Practice at Chappell, Chappell and Newman
The class action practice at Chappell, Chappell and Newman is built on a foundation of diligent case preparation, vigorous legal advocacy and success.
Just some of the types of class action cases that our lawyers have a record of successfully resolving include (but are not limited to) litigation involving:
When you trust our attorneys to represent you in a class action claim, you can count on us to:
- Clearly explain your rights and what to expect from the class action process moving forward
- Craft you and all of the plaintiffs in your class the strongest possible case
- Keep you updated about the progress of the class action case as it moves forward
- Effectively handle all of the details of the class action case, including managing all of the administrative work and bureaucracy necessary for the case to proceed
- Bring your class action case to the best possible resolution.
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Class Actions are Working: What the CFPB Report Tells Us
The full report is a 728-page analysis of mandatory arbitration in the financial industry and its effects on both lenders and borrowers. The CFPB was mandated, within the Dodd-Frank Wall Street Reform and Consumer Protection Act, to conduct a thorough study of arbitration and the other traditional means of resolving disputes between lenders and borrowers. The agency reviewed extensive data from lending disputes filed during the years 2010, 2011, and 2012.
The results are in. Arbitration overwhelmingly favors lenders while class actions prove to be an effective–and remarkably efficient–way for borrowers to enforce their rights.
Here are some of the key conclusions:
Amount of Litigation
- From 2010 through 2012, an average of 616 individual AAA cases were filed per year for six product markets combined: credit card; checking account/debit cards; payday loans; prepaid cards; private student loans; and auto loans.
- From 2010 to 2012, for the same six product markets covered in the arbitration analysis, and average of 187 putative class cases were filed per year — that is, cases that were filed in federal court or in selected state courts by at least one individual who sought to sue on behalf of a class.
Speed of Litigation
- Arbitration was relatively fast. Where there was a decision on the merits by an arbitrator or where the record indicates that the case was settled, the decision generally was issued or the settlement reached within five months after the case was initiated.
- When they were not transferred to or filed in MDL proceedings, federal class cases filed in 2010 and 2011 closed in a median of 218 days and 211 days, respectively, from the date of the filing. Class cases transferred to or filed in MDL proceedings in 2010 and 2011 were markedly slower, at a median of 758 days and 538 days, respectively. State class cases filed in 2010 and 2011 were also somewhat slower, at a median of 407 days and 255 days, respectively.
Relative Success Rates of Borrowers
- Of the 341 cases filed in 2010 and 2011 that were resolved by an arbitrator and where the CFPB was able to ascertain the outcome, consumers obtained relief regarding their affirmative claims in 32 disputes. Consumers obtained debt forbearance in 46 cases (in five of which the consumers also obtained affirmative relief). This is a startlingly low total success rate: 22.9% The total amount of affirmative relief awarded was $172,433 and total debt forbearance was $189,107. The average financial relief obtained by each litigating consumer was $4,635.
- Of the class actions filed between 2010 and 2012, 25% resulted in individual settlements and 17% resulted in class settlements for a total success rate of 42%
- The CFPB was not able to track attorneys fees of individual litigants in arbitration because such fees are not approved by the arbitrating panel. Approximately 60% of litigants in arbitration were represented by counsel, however.
- All class actions analyzed reported attorneys’ fee awards. Across all settlements that reported both fees and gross cash and in-kind relief, fee rates were 21% of cash relief and 16% of cash and in-kind relief. The CFPB was able to compare fees to cash payments in 251 cases (or 60% of the data set). In these cases, of the total amount paid out in cash by defendants (both to class members and in attorneys’ fees), 24% was paid in fees.
Amount of Compensation Received by Borrowers
- Of the 341 arbitration cases filed in 2010 and 2011 that were resolved by an arbitrator and where the CFPB was able to ascertain the outcome, the total amount of affirmative relief awarded was $172,433 and total debt forbearance was $189,107. The average financial relief obtained by each litigating consumer was $4,635.
- The CFPB could identify class size or a class size estimate in around 78% of class actions filed from 2008 to 2012. Based on these cases only, estimated class membership across all five years was 350 million. Excluding one class action involving 190 million estimated class members, the total class size for the cases where we were able to find data was 160 million. The settlement value of these classes included more than $2 billion in cash relief including fees and expenses and more than $600 million in in-kind relief, for total compensation of $2.6 billion. These figures represent a floor because a number of settlements also required companies to change business practices. The average financial relief obtained by each litigating consumer was $7.43.
The results of this study reveal–quite clearly–why the financial industry would like to use mandatory arbitration agreements to eliminate consumer class actions. Class actions have proven to be vastly more successful than arbitration in terms of relative rates of success and total dollar financial relief obtained. Class actions have also provided a vehicle of relief to consumers with much smaller financial “stakes”–claims which would not economically justify individual litigation before an arbitration panel.
Furthermore, the economies of scale produced by the class action mechanism allow the attorneys’ fees approved by the courts to be about half of that in a traditional individual case (20% to 40%).
Now, the CFPB did conclude that arbitration is a faster means of resolving a dispute. For consumers, however, this almost always means its a faster way to a losing decision.
Class Actions: How Do You Find Them?
So you’ve seen the articles of mutli-million dollar class action settlements. You take a look at the stack of personal injury files on your floor and, in your mind, you quickly estimate the $13,000 of attorneys’ fees that they *might* generate. You glance back at the article and think “how do i get me one of those???”
There are a couple of ways. But first ask yourself, “do I really want to ‘find’ a class action?”
Any suit can be filed as a “class action.” But an alleged class and a certified class are two very, very different things. Class actions are notoriously difficult to certify, much less win. The four-pronged test of “commonality/typicality/ numerosity/adequacy” provides a seasoned defense lawyer with a plethora of opportunities for leaving you with an individual claim.
So what’s the key to finding a good class action? In two words: case selection. Plaintiff’s attorneys know how rare it is to have any single case without any problems of proof or damages. If a client brings to you a case that looks quite good but may have one or two “problems,” it’s highly likely that case will never be certified as a class action. “Problems” are generally case-specific, and case-specific problems create questions of individuality. Individuality defeats commonality, which in turn defeats class certification.
So you really need to find a nearly perfect case in order for it to be susceptible of class certification.
Remember that stack of personal injury files on your floor? It’s highly unlikely you’ll ever find a class action in there. Cases in which your client has suffered physical or emotional injury are almost never classable because, again, they involve an individual question specific to your client’s case. This is so even in a catastrophic incident like a building collapse or a train derailment. Each victim of the same wrong has wildly varying injuries and damages–damages that are not provable in a single trial without the single trial breaking down into a series of mini-trials.
Now, there may be other tangential issues within those personal injury files which could lead to a class action. We’ll discuss those below.
So are you still interested in finding your first class action? Ok. Let’s discuss how to do that
You now know that a claim involving physical or emotional injuries is almost never a candidate for class certification. But what kinds of claims are?
- Consumer Contracts: Boilerplate contracts foisted upon consumers by corporations are very good candidates for class certification. When a specific company policy or procedure breaches a provision within that contract, it may well be that all of that company’s customers possess identical breach of contract claims. But be wary of “Fraud in the Inducement of Contract” claims! Anytime you invoke fraud you also invoke reliance. Reliance is usually an individual question specific to each person. Individuality can be deadly to a class action.
- Insurance Policies: Insurance policies are, of course, just a specific breed of consumer contracts. But, as we all know, insurance companies can bend over backwards to interpret their liability under such policies as narrowly as possible. If your client is in a fight with an insurance company, or has been denied policy benefits, over a twisted interpretation of policy language, you may be witnessing the tip of a class action iceberg.
- Statutory Claims: Civil claims based in statute generally apply to all people (or a specific group of people) equally. When corporate policies or procedures violate some statutory right belonging to one person, such policies or procedures could well be giving rise to a potential class action on behalf of all of the corporation’s customers that possess that statutory right.
Statutory class actions include claims under the SCRA (Servicemembers Civil Relief Act), TILA (Truth in Lending Act), and RCRA (Resource Conservation and Recovery Act), just to name a few.
So there’s your primer on how to find that first class action, or at least how to start looking for it!
Graham Newman, an attorney with Chappell, Chappell and Newman, focuses his practice on non-traditional litigation in areas such as class actions and statutory claims.
Takin’ It to the Streets: How Class Actions Empower Personal Liberty
The central function of the class action in American law is to bestow upon an individual the power of an army of similarly situated individuals in order to vindicate his rights against an otherwise overwhelming opponent.
The class action finds its roots in Anglo-American notions of equity and remains a vital tool for protecting individuals in our court system today.
Congress, in enacting the 2005 Class Action Fairness Act, observed the following in the Act’s preamble:
“Class-action lawsuits are an important and valuable part of the legal system when they permit the fair and efficient resolution of legitimate claims of numerous parties by allowing the claims to be aggregated into a single action against a defendant that has allegedly caused harm.”
The need for a mechanism to promote “fair and efficient resolution” of individual claims stems from two realities often seen in a corporate-consumer context: 1) corporations have exponentially greater resources than a consumer to fight a legal case; and 2) the bare costs of bringing a legal action often extinguish any benefit an individual consumer might receive from his case.
Let’s take an example. John Doe buys a top-of-the-line lawn mower from ACME Industrial. The purchase price is $400. But little does Doe know, ACME–in an attempt to cut costs and raise its profits–has used cheap plastic parts in all of its lawn mower engines. The parts survive the first few months of service, but inevitably break on every single one of the ACME lawn mowers.
John Doe is incensed. He has been cheated out of $400. Under South Carolina’s laws, he could successfully sue ACME for the damages he has incurred. But does it make sense for John Doe to bring his individual claim? Honestly, no. Merely filing a complaint in South Carolina will cost Doe $150. A traditional 1/3 attorney’s fee will cost Doe another $133. A single deposition transcript will run $300. Translation: in even the simplest of cases, Doe’s possible recovery from ACME will be eliminated almost as soon as he files suit.
Here’s where the class action empowers Doe to fight for his individual rights. Let’s say ACME Industrial has sold 10,000 of its inherently defective lawn mowers. In a class action, Doe can file on behalf of himself and all other individuals who have similarly suffered at the hands of ACME’s defective design. Now, the amount in controversy is $4 million instead of $400. Filing costs are now a mere fraction of this potential recovery and the attorney’s fee is spread over the entirety of the class.
Without the threat of the class action, ACME would be free to operate without the threat of being sued because it would know no customer would have a financial incentive to do so. With a class action, however, an individual customer is empowered to fight for his own rights by banding together with others. As such, the class action plays an important role in promoting individual liberty.
Contact a South Carolina Class Action Lawyer at Chappell, Chappell and Newman
If you have been harmed by the actions of a business or some other entity, contact the Columbia injury attorneys at Chappell, Chappell and Newman to find out if you have a class action claim and to get clear answers about your best options for proceeding. Since 1993, our lawyers have been committed to protecting our clients’ rights and helping them maximize their financial recovery.
Call our firm or contact us online to set up a free, no obligations initial consult with one of our lawyers. During this meeting, you can learn more about your rights, as well as how we can help you.
From our office locations throughout South Carolina, our attorneys provide the highest quality legal services to injured people and families in Columbia, Alken, Camden, Sumter, Orangeburg, Greenville, Florence, Beaufort, Irmo, Spartanburg, Myrtle Beach, Hilton Head Island, West Columbia, Rock Hill, Charleston, Lexington, Winnsboro, Summerville, and throughout South Carolina.