Class Action Lawsuits

Securities class action lawsuits are required to be filed in the federal courts when the amount of the alleged damages is in excess of $5 million. Additionally, cases must be filed in federal court when less than two-thirds of the class members, including the lead plaintiff, are citizens from a single state. The Federal Rules of Civil Procedures Rule 23 requires that four criteria be met:

• Large Number of Defendants
• Common Facts or Issues of Law
• Similar Claims and Defenses
• Fair and Adequate Representation

Once all of the criteria have been met the Court will certify the class action lawsuit and appoint class action member counsel. At this point in time, a notice of class action lawsuit is given to all class members, through the most practical method available. The notice must specify the nature of the action, who is a class member, the claims of the class members and legal issues to be addressed. The notice of class action lawsuit process must exclude any class members who requests exclusion. This request must be made before the deadline which is determined by the Court. This is known as the “opt-out” deadline. The decision to “opt out” of a class action lawsuit is made when an individual has an economic advantage to file an individual securities arbitration claim.