|
General Class Action FAQs
What is a class action?
A class action is a legal procedure used to prosecute efficiently a lawsuit in which a large number of people have been injured by a common act or set of actions. The class process is used, for example, in cases alleging or concerning price fixing conspiracies (antitrust), fraudulent stock manipulation (securities) and oil spills (mass tort). In a class case, one or two named plaintiffs stand in for the entire group of similarly aggrieved persons during the course of the litigation. When a class action settles, the judge presiding over the case must approve the fairness and propriety of the settlement. Usually, potential class members have the option, after receiving notice, of excluding themselves from a class or class settlement, and pursuing the case on their own. The class procedure allows individuals and small businesses to prosecute meritorious cases that would have been too expensive and insufficient to litigate individually.
What kinds of cases are litigated as class actions?
In the 1960's, the Federal Rules of Civil Procedure were amended to allow for class actions. The new Rules were promulgated with an eye toward strengthening the hands of government agencies seeking to uphold an enforce then recently enacted civil rights legislation bey the empowerment of private attorneys. Berger & Montague’s chairman and founder, David Berger, was a pioneer in applying the class action procedure to antitrust litigation. Class action law has evolved over time and is now used to seek money damages and other relief arising out of securities law violations, consumer fraud, human and civil rights violations, employee benefits disputes, and environmental and mass torts. Berger & Montague has been instrumental in the use and development of the class action device in these areas as well.
Should I, or do I need to be, involved in a class action?
Is there risk or expense for me?
In most cases you need take no steps of your own to join a class action. Indeed, usually only those who wish to exclude themselves from a class need do anything. By participating in a class case, you accomplish a number of objectives. You may receive compensation for a wrong, injury, or loss you have sustained – compensation that may not have been available to you in any other forum. As a member of a class of similarly harmed persons, you help demonstrate to the court that the alleged harm done was substantial and affected a large number of people, increasing both the likelihood of a recovery and its size. Moreover, with rare exceptions in a handful of states, the only cost to you will be drawn from any settlement or judgment upon successful resolution of the matter. They work on a contingency fee basis and are paid upon a successful resolution of the matter. Generally, the attorneys advance the expenses and costs of prosecuting class cases.
How are attorneys paid in class action cases?
The plaintiff’s attorneys are usually paid in accordance with an order from the court before which the case is pending. The judge responsible for the class action reviews a submission made by the attorneys, called a “fee petition.” This petition sets forth in detail the work the attorneys have done on behalf of the class. After consideration, the court enters an order fixing the amount of the fees to be paid to the attorneys form the judgment or settlement fund. The amount of the fees awarded is based upon a number of factors, including, among others, the quality of the work, the difficulty of the case, the nature of the result, the amount of time spent on the case, and the risks involved. As a percentage of the gross settlement or recovery, the fee amount can vary greatly within a wide range depending on the factors the court takes into account and the weight it attaches to each of them.
Securities Class Action FAQs
What is a securities class action?
A securities class action is a lawsuit brought on behalf of a group of investors who have suffered an economic loss in a particular stock or security as a result of fraudulent stock manipulation or other violations of federal or state securities law. In federal practice, such cases are brought by on or more investors in the stock, know as "Lead Plaintiffs," on behalf of all other who have suffered financial losses as a result of purchasing shares in a company during the period of time the fraud or securities laws violations artificially inflated the value of the stock (known as the "class period").
What is a "class period" in a securities case and how is it determined?
The "class period" is typically the time frame during which it is believe the alleged fraud or other securities law violations artificially inflated the price of the stock at issue in the case. Only those persons who purchased stock during this period are included in the class action suit. The class period is initially determined by plaintiffs’ counsel after extensive research and investigation. Sometimes the class period changes during the course of the litigation based on additional information uncovered during the discovery process.
What is a Lead Plaintiff?
A Lead Plaintiff is a representative person(s) or party appointed by the court, who stands in for and acts on behalf of the other class members in the litigation. To appoint a Lead Plaintiff, a court must determine that the proposed plaintiff’s claims are typical of those of the other class members, and that this plaintiff will adequately represent the interests of the class as a whole. Under certain circumstances, more than one class member may serve as Lead Plaintiff. The Lead Plaintiff has control over the course and direction the litigation will take.
How does the court determine who will serve as Lead Plaintiff?
The Private Securities Act of 1995 provides that the most adequate Lead Plaintiff is the person or group of persons who, in the determination of the court, has the largest financial interest in the relief sought by the class. The "largest financial interest" can be determined by courts in a variety of ways. Some courts appoint the Lead Plaintiff based on the dollar amount of the loss due to the securities law violations alleged, and some base this decision on the percentage of net worth loss. Also, depending on the circumstances, several entities and/or individuals may be appointed to serve a "co-lead" Plaintiffs.
What is the "Lead Plaintiff Deadline"?
Applications for Lead Plaintiff must be filed within the sixty-day period following the first filing of a class action complaint in federal securities case. The application deadline is strictly applied. If you wish to be a Lead Plaintiff in a particular case, you must contact Berger & Montague at least five business days in advance of this deadline.
I missed the sixty day Lead Plaintiff Deadline. What should I do?
If you purchased your shares during the class period and sustained losses you are automatically part of the class action. The sixty-day deadline applies only to those seeking to be Lead Plaintiff.
What kind of recovery can I expect?
Until the litigation is well under way it is impossible to determine what the recovery, whether by settlement or following judgment at trial, might be possible. If they are not dismissed for legal reasons at the very outset of the litigation most securities cases do settle, however. Typically a settlement consists of a payment of cash, stock, or combination of both to a common fund to be distributed to the class in proportion to the amount each class member is determined to have lost. The maximum possible recovery, which is rarely attained, is the amount of loss attributable to the illegal conduct, less attorney’s fee and costs.
How long does a securities class action usually take to settle or resolve?
The typical securities class action takes approximately two to three years from the time the initial complaint is filed until a case concludes either with settlement funds distributed to stockholders, or by judgment or dismissal. This is only an estimate; some cases have taken longer, especially when there are appeals, while others have taken significantly less time to resolve.
Can I sell my stock in the company being sued and still be a class member?
Yes. It is not necessary for you to retain ownership of the stock after the class period has expired to participate in the lawsuit.
Do I need proof of my ownership of the stock, and what is the best form of that proof?
While the best evidence of ownership are the confirmation slips received when you purchased the stock, you may also use your brokerage statements of account indicating when you bought the stock and at what price. You should be sure to keep these records in a safe place. You may need to submit them to the claims administrator after the case has been resolved. You will be notified by mail when to send this documentation.
If more than one law firm filed a lawsuit related to the same underlying securities violation, do I need to contact them all?
No. Where more than one case has been filed on behalf of a class, the cases will eventually be consolidated by the courts. You should not retain multiple law firms to represent you for the same claim. You cannot improve the amount of any recovery by retaining more than one law firm.
Will I be kept informed during the course of the litigation?
You will be notified either by mail or e-mail of any significant developments during the course of the litigation. Also, Investor Protect, a specially dedicated team within the Securities Litigation Department at Berger & Montague can be reached by e-mail, or by toll free telephone or letter whenever you have a question. In addition, this very website will be regularly updated with pertinent case developments in each securities case as the situation warrants.
How can I discuss a potential class action or a pending case with an attorney?
If you wish to discuss your situation in complete confidence, simply telephone Investor Protect, toll-free at 888-891-2289 during regular business hours and you will be connected with an attorney who can help you. Berger & Montague attorneys will discuss a pending case, or if warranted, investigate a possible class action that has not been brought, all free of charge.
If I have information relative to a pending case, what should I do?
If you believe that you have information about a pending case, telephone Investor Protect at 888-891-2289 to speak to an attorney in confidence.
I am a small investor. What should I do?
As a small investor your rights are most likely protected by those with more significant losses who have already filed a securities class action. Please click here to have your name and address added to our mailing list in order to get case updates and notices of settlements.
Why should I choose Berger & Montague to represent me?
The law firm of Berger & Montague is one of the largest and most successful class action firms in the country. We have over 60 attorneys, all of whom represent plaintiffs in complex litigation. We have extensive experience representing plaintiffs in class action securities litigation and have played lead roles in dozens of major cases over the past 30 years, having recovered billions of dollars for investors. The firm is has represented investors as lead counsel in actions against, among others, Rite Aid, Sotheby’s, Waste Management, Inc., Sunbeam, Boston Chicken, and IKON Office Solutions, Inc. The expertise and experience of Berger & Montague in successfully conducting major securities and other complex litigation have been recognized by courts throughout the country. To read what judges have had to say about our attorneys, visit the Judicial Praise section of this web site.
|
