Not All Lawsuit Settlements Are Created Equal

A Lawsuit can take many forms, be it an individual action by a single plaintiff, or a class action involving as many as thousands of plaintiffs all having a similar complaint and pursuing a like-minded goal.

Class Action Lawsuits are, for many a preferred pathway through the courts, given that an individual lawsuit generally involves a greater commitment of time and effort—and sometimes cost—on the part of the plaintiff. Class actions, on the other hand, only require that a plaintiff with a justified complaint mirroring that of the lead plaintiff and others in the class, to register as a class participant and qualify for a share of settlement proceeds.

However, not all Lawsuit Settlements are created equal.

In the class action arena, the recent decision by the US Supreme Court that a massive class action against Wal-Mart alleging discriminatory hiring and promotion practices could not go ahead was a blow to well over one million potential class participants across the country. The class was denied, in part, due to the sheer volume of participants, which would make the class, according to the decision, unwieldy. The decision would not preclude plaintiffs from launching individual lawsuits against the juggernaut defendant, although some suggested that settlements could be smaller.

Others in the legal community will tell you that individual settlements by way of a single lawsuit tend to be higher per capita than an equal share of a settlement delivered via class action.

But then there is the case of Holloway et al v. Best Buy. The latter is the largest electronics dealer in the US. The class action, filed in US District Court in California back in 2005, accused Best Buy of discrimination against African-American, Latino and female employees.

According to various sources, nine plaintiffs will share $200,000. Advocates of the settlement note that the greater value is the commitment by the defendant to alter policies and practices designed to prevent future discrimination in such areas as hiring, assignment, promotion and exempt compensation.

At the same time, however, $10 million from the Best Buy settlement will go to pay court costs and legal fees.

Meanwhile, single plaintiffs bringing a qui tam lawsuit on behalf of the federal government can often walk away with millions. Thus, not all Lawsuit Settlements are created equal.

The fact remains however that a Lawsuit, in whichever form is deemed most effective and appropriate, is often necessary to pursue and secure justice when a party, or parties are wronged through no fault of their own.

And Class Action Lawsuits, for many, represent the easiest way to get there.