The Nitty-Gritty Of Class-Action Lawsuits On 'Stuff You Should Know'

Most of us know vaguely what a class-action lawsuit is; many of us have even been part of one without realizing it, like when the Equifax credit bureau was hacked and millions of people’s personal data was exposed. But the non-lawyers among us might not know much more beyond the plot of Erin Brockovich, so on this episode ofStuff You Should Know, Josh Clark and Chuck Bryant dive into the history of class-action lawsuits, why they’re useful, some controversies surrounding them, and some of the biggest payouts in history. In a nutshell, a class-action lawsuit is a way for a group of people who have experienced the same harm from the actions of a large company – for example, property damage from an Exxon oil spill – to come together and sue that company for damages. This is a useful legal tool, because an individual plaintiff going up against a huge corporation like Exxon would rarely win. Exxon has so much money and so many powerful lawyers at its disposal that it could keep a single plaintiff busy with appeals for years, draining them financially, and the case may never see court – as effective as punching a professional boxer in the face with a single finger. However, a group of plaintiffs, forming a metaphorical fist, can deliver a knockout blow.

Class-action suits can be localized with a handful of plaintiffs, or represent a nationwide complaint with millions of plaintiffs, so legally they can get a little complicated. That’s why when a “class” is suing for over $5 million, or has over 100 members, the case typically goes to federal court. One single plaintiff is the lead plaintiff, with their name on all the court paperwork. They’re the only plaintiff required to show up in court and coordinate with the lawyers, and because of that they typically get a little more of the payout. Everyone else involved in the class gets the exact same payout, regardless of differences in damages – and once the class-action lawsuit is decided, no individual plaintiff can turn around and try suing the company for more on their own, because they’re bound by the decision. 

There are a lot of benefits to class-action suits, but they aren’t perfect, and one of the problems people have is how much money the lawyers get paid. Class counsel firms can be awarded millions in fees by the judge for class-action suits, even when the plaintiffs get nothing but a $5 check in the mail or a coupon for a free tire, which is why they’re a favorite target for tort reform. But without class-actions, large companies could do whatever they wanted without fear of reprisal, theoretically keeping corporate malfeasance in check. (“Sure they do,” Chuck laughs.) Hear all this great information and more on Stuff You Should Know.

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