Class Action Lawsuit – What You Need to Know

In September 2019, three law firms filed a class action lawsuit against the maker of GreenPan (source).  I asked my husband as to whether the lawsuit against GreenPan should be a matter of concern for us, and this is what he had to say.

It is difficult to know whether we should be concerned about this at this stage.  I am going to speak from a position of neutrality.  Some attorneys specialize in suing companies, and others represent companies.  If you asked either of these groups, you might get a biased answer.  So, I will let you know my thoughts on this with as little bias as I can (I have represented both sides in lawsuits, although I have never represented a plaintiff in a class action).

Filing a lawsuit

Firstly, anybody can file a lawsuit for any reason.  For example, I can sue my wife because she is wearing gray today.  Or, I could allege that she killed me.  Ultimately, neither of these lawsuits would go well for me, but I could file them anyway. 

So, just because a party files a lawsuit does not mean that the allegations in the lawsuit have merit.  That is to say, many lawsuits are dismissed before trial because they lack merit.  This happens every day in courtrooms all over the country.  So, we can’t really tell anything about the merit of a lawsuit just because it was filed.  

Before we see if the lawsuit against GreenPan has merit, it is important for us to understand how a class action lawsuit comes about. 

How a class action lawsuit works

Class action lawsuits were invented so that plaintiffs can obtain a remedy when the amount they are seeking is very small.  Since lawyers are expensive, most people simply can’t afford to hire one.  It can take hundreds of thousands of dollars, or more, to file and prepare a case for trial, and to try it. 

So, if someone goes to the store, and buys some pans and feels they have been cheated out of a couple of hundred dollars, then it would not make any sense to file a lawsuit.  That is to say, it would cost a lot more to prepare the complaint than the pans are worth.  (True, the plaintiff could file a small claims lawsuit, but to prove the case, would probably have to hire expert witnesses, who charge even more than lawyers do, so small claims would not help the plaintiff.)

Many cases like this are filed by attorneys who work on a contingent basis, instead of an hourly basis.  In other words, they obtain their fees by a portion of any amount that they recover for their clients.  (Additionally, attorneys’ fees are awarded to plaintiff’s counsel in some class actions.) 

However, in our hypothetical case, the most the plaintiff could probably recover is a couple hundred dollars, because that is what the plaintiff paid to purchase the pans.  And the lawyers could recover only about $100.  That will not motivate any lawyer to file the case, because it would cost more than that to file the case.

So, class action lawsuits were invented as a way for holding defendants accountable for their actions when the damages they might do to any one person would be small, but the impact on society as a whole might be much bigger.  Is this the case with the lawsuit against GreenPan?  Read further to find out.

Why a class action lawsuit is attractive to attorneys

Class actions are lawsuits filed not only on the behalf of the named plaintiff, but also on behalf of all others who are similarly situated (i.e. the class of persons).  In this way, the lawyers filing the case can add up the damages suffered by all persons who are in the same situation.  Thus, a case worth a couple hundred dollars can become a case with a value of hundreds of thousands, or millions, of dollars.  This makes the case attractive for attorneys to take and file.

However, it’s now important to consider how, when and under what conditions plaintiffs’ lawyers in class actions are paid.  (Follow the money!)  Just because a plaintiff’s lawyer files a lawsuit does not mean that they will get paid.  To clarify, the lawyers are only paid if they (1) win (and collect money), or (2) settle the case with the defendant. 

This means that before filing a lawsuit, a plaintiff’s lawyer must decide whether it is likely that he or she will be paid when the case is done, which might not be for years.  So, most attorneys who practice in this area are careful to only file cases that they feel have merit.  (Some lawyers are reckless, though, and will file lawsuits that either lack merit, or which they have not investigated thoroughly.  Often this comes from inexperience.)

Attorney representation of the lawsuit against GreenPan

In the class action lawsuit against the maker of GreenPan, the plaintiff has three law firms representing her.  In other words, not one lawyer, but three different law firms, felt there was merit to the case before they filed it.  Because I do not know these firms, I can’t speak to whether they are good attorneys or not.  Nevertheless, the fact that there are three firms working on this tells me that the lawyers are probably conservative and careful, and that they are probably proceeding after investigating the case.

Additionally, this case is relatively new, and I have not reviewed the pleadings on file with the court.  Moreover, there are two sides to every story, and I have not reviewed what the manufacturer’s defenses may be.  Hence, the only conclusion I can draw as an attorney from the above is that the lawsuit bears watching. 

Best,

William T. Webb

P.S. To learn more about GreenPan non-stick cookware, head over to my post.

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