Simply put, a class action is a lawsuit brought by a member or members of a large group of people, making claims for themselves, and all others with similar claims.
Rule 23 of the Federal Rules of Civil Procedure defines three kinds of class actions. The first type may be brought where separate lawsuits might adversely affect other members of the class or the defendant in either of two ways – if the piecemeal litigation resulting from separate suits might impose inconsistent standards of conduct on the defendant, or if multiple suits might “impair or impede” the class members from protecting their various interests. In the second type of class action, a class seeks some type of relief compelling the defendant either to cease a certain activity or to perform some other type of action. In the third category of class action lawsuit, there are questions of law or fact common to the entire class that predominate over questions peculiar to each individual plaintiff, and a class action suit is a more efficient means to resolve the controversy. Under the third type of class action, individual members of the class may “opt out” of the litigation if they do not want to be bound by the results of the suit. Courts have held that due process requires that absent class members be given adequate notice, adequate representation, and adequate opportunity to opt out, before they can be bound by a final judgment in the suit (Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 105 S. Ct. 2965, 86 L. Ed. 2d 628 ).