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Properly Evaluating and Defending Class Action Complaints
By: Austin T. Hamilton, Esq. and Charles B. Jimerson, Esq.
Jimerson Birr
Class action complaints are not a novel concept. Nevertheless, there appears to be an increase in class action complaints alleging violations of consumer protection laws such as Fair Debt Collection Practices Act (FDCPA), Florida’s Consumer Collections Practices Act (FCCPA), Fair Credit Reporting Act (FCRA), or Telephone Consumer Protection Act (TCPA). While consumer protection lawsuits already pose a risk to many businesses due to the consumer’s ability to recover actual damages, statutory damages and attorneys’ fees, adding the potential exposure to a class of consumers significantly increases the risk.
Upon being served with a class action complaint, executives, general counsel and other business leaders should evaluate the allegations of the complaint, evaluate whether the allegations support class certification and evaluate the magnitude of the potential risk exposure. After these initial considerations, corporate counsel should work with competent outside counsel to develop an action plan for defending against the class action with an eye towards disposing of the lawsuit as swiftly as possible.
This article seeks to provide a high-level overview of class action complaints, considerations to be given and potential strategies for successfully defending the class action.
Initial Considerations: Evaluating the Potential Risk Exposure
One of the initial considerations is to assess the potential risk exposure. In order to do so, business leaders must evaluate the allegations of the complaint and understand what makes up the class. According to Rule 1.220, Florida Rules of Civil Procedure, the class of members must be defined in the complaint. Presuming the class is properly defined, business leaders should perform an internal evaluation of the potential claims to determine the potential number of class members and the potential monetary exposure to the business.
In addition to an internal risk-exposure analysis, business leaders should review their insurance policies to determine whether there may be insurance coverage for the allegations in the complaint.
Properly Defending the Class Action Complaint
In properly defending a class action complaint, businesses must develop a defense strategy. The strategy will likely depend on the specific allegations of the complaint. While entire books are written on class actions, this article will generally discuss challenging the standing of a class representative and defending precertification discovery.