class action lawsuit


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Class Action Lawsuit

A lawsuit that occurs when multiple people, who claim to have been wronged by the defendant in the same or a similar way, seek restitution, even if the alleged wrongs occurred at different times. For example, multiple shareholders may file a class action suit against a company if they suffered losses from similar fraudulent actions. Proponents of class actions lawsuits contend that they allow "the little guy," however defined, to seek justice. Opponents argue that they enrich attorneys and do not necessarily help the actual plaintiffs. See also: Tort reform, Class Action Fairness Act of 2005.

class action lawsuit

A lawsuit in which one party or a limited number of parties sue on behalf of a larger group to which the parties belong. For example, investors may bring a class action lawsuit against a brokerage firm that has actively promoted a tax shelter without having adequately disclosed the attendant risks. See also shareholder derivative suit.
References in periodicals archive ?
In Dabit, the Court unanimously ruled that Congress intended all class action lawsuits involving securities listed nationally and traded on a national exchange to proceed in federal court, where the law is more predictable.
That prospect," the justices concluded, "squarely conflicts with the congressional preference for national standards for securities class action lawsuits.
This promotes predictability by ensuring that securities class action lawsuits will be subject to rigorous scrutiny by federal courts applying federal standards.