| Chapter
9
Covering
Civil Courts
By Maurice
Possley
Class Actions
When a class action lawsuit is filed, a judge ultimately will decide whether
the lawsuit is appropriate to proceed as a class action, as well as the membership
of the class. It is important to remember that class action lawsuits seek to
be declared a class action—the designation is not automatic. In recent
years, class action lawsuits have become the target of legislators and in early
2005, President George W. Bush signed the Class Action Fairness Act, a bipartisan
effort to move class-action lawsuits with claims of more than $5 million and
plaintiffs from different states into federal court.
Class action lawsuits have provided benefits to consumers in many
instances, however. For example, General Motors paid millions of
dollars to settle claims brought by owners of Oldsmobiles that
were built with substandard transmissions. And in 1999, makers
of the diet drug Phen-Fen settled class action litigation for about
$4 billion—that included continued testing costs of patients—after
the drug was taken off the market when some users suffered heart
valve damage.
--Monetary damages fall into two basic categories—compensatory
and punitive. Compensatory damages are actual amounts of financial
losses that can be proved and are sought to compensate the plaintiff.
The proof can be in many forms, ranging from medical bills to lost
wages to lost business income. In the case of wrongful death lawsuits,
this can be lost income over the life span of the deceased. Punitive
damages are in addition or alternative to compensatory damages
and are designed to punish the defendant for engaging in the conduct
in question as well as to set an example for others who would engage
in similar conduct. In the case brought by Stella Liebeck, the
81-year-old woman who sued after spilling hot McDonald’s
coffee, the jury awarded $200,000 in compensatory damages and $2.7
million in punitive damages. A third form of damages is called
nominal damages (frequently $1) when there is no evidence of a
clear amount of damages, but the judge or jury finds the plaintiff
has prevailed in the lawsuit. A fourth form is called liquidated
damages, which is an amount set forth in a contract that parties
to the contract agree will be paid if a breach of the contract
is determined later.
--Injunctions take various forms, but all basically
carry the same meaning—a party is enjoined or ordered to
take a specific action or refrain from taking a specific action.
These orders can range from reinstatement to a job, a prohibition
against dismissal from a job, an order to clean up pollution or
an order to halt a looming strike by workers.
There are different types of injunctions, including:
--Temporary restraining order. Commonly referred
to as a TRO, a lawsuit may seek an immediate hearing before a judge
requesting that an order be entered that maintains the status quo
pending a hearing on the claims of the lawsuit. A temporary restraining
order can be entered without the defendant being present in court.
It is designed to prevent a threatened harm from occurring—one
that may cause irreparable damage. A TRO goes into effect when
it is served upon the parties in question. It is not a ruling on
the merits and it is intended to last only until a hearing on the
merits of the issue in question can be conducted. These temporary
restraining orders can be used to freeze bank accounts, shut down
public dangers such as environmental pollution, or block pending
union strikes.
--Preliminary injunction. Generally, a request
for a TRO, if granted, sets the stage for a preliminary injunction
hearing where evidence is presented and a judge issues a decision.
A preliminary injunction is not a final ruling in the case, but
is generally an indication that the party obtaining such an injunction
may win the case. A judge, in granting a preliminary injunction,
generally must find that the plaintiff has a substantial likelihood
of success following a full hearing at a later date and that irreparable
harm will occur if the injunction is not entered. The judge is
required to balance the hardships that may occur to both sides
in the case, as well as whether any public interest is affected.
--Permanent injunction. This is the final order
that evolves from a preliminary injunction and is the order that
ultimately will be appealed if an appeal is filed. A permanent
injunction may follow another hearing or may result in an agreement
between parties following issuance of a preliminary injunction
so that the losing party may seek an expedited appeal.
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