Class action lawsuits relate to a specific area of law, and many people are not aware of how class actions work. Here let's go over the basics.
In October we discussed a New Jersey bill that, if passed into law, would reduce penalties for some companies that commit technical violations of the state's Consumer Fraud Act. One aspect of the bill, which you can read more about in our previous post, allows companies to avoid having to pay plaintiffs' legal fees and other costs if the violation in question did not result in loss to the consumer.
Honda Motor Co. and Takata Corp. are the targets of a recently filed lawsuit alleging the manufacturers prioritized profits over customer safety. The suit, which seeks class-action status, claims that Takata built cheap airbags to cut costs and that Honda bought the airbags to cut manufacturing expenses. Consequently, the airbags are "killing and maiming drivers and passengers involved in otherwise minor and survivable accidents."
New Jersey's Assembly Consumer Affairs Committee recently approved a bill meant to reduce penalties for companies that are found by a court to have committed only a technical violation of the state Consumer Fraud Act. Currently, an individual who wins a consumer fraud lawsuit against a New Jersey company is entitled to compensation for the costs of litigation, including attorney fees, even if no damages were suffered by the plaintiff.
People generally assume that products available to consumers are reasonably safe when used in the proper manner. However, the reality is that each year many products have to be recalled because they pose an unreasonable risk of injury or death, even if the products were initially approved by government regulators.
An interesting report from the global consulting firm NERA traces the number and kind of consumer class action settlements in the last four years. The settlements, ranging from 2010 through 2013, related to anti-trust claims (price fixing, for instance), consumer fraud, product liability and false advertising, among other issues. Examined in the report are 479 class action suits, nearly 85 percent of which involved a monetary payment to plaintiffs.