United States

While group or collective proceedings have centuries’ old antecedents, modern class action practice in the United States originated in 1966 with the amendments to the Federal Rules of Civil Procedure. Among the key driving forces then was the civil rights movement; as one commentator put it “to create a class action system which could deal with civil rights and, explicitly, segregation.” Today, while the focus of class actions has unquestionably broadened to encompass commercial, as well as civil rights, access to justice is the pulse of class action practice.

Reports indicate that, in 2025, U.S. courts granted 297 approved class certification in whole or in part at a rate of approximately 68%. While this rate is more or less consistent with the two prior years, the value of the ten largest U.S. class action settlements last year far exceeded the total amounts in 2024, 2023 and the years before.

Rule 23 of the Federal Rules of Civil Procedure governs class actions in United States federal court. It sets forth both prerequisites and types of class actions. To proceed as a class, plaintiffs must establish numerosity, commonality, typicality, and adequacy of representation under Rule 23(a). Then plaintiffs must satisfy one or more of the 23(b) categories; for example, predominance and superiority under 23(b)(3).

Rule 23 also governs certification orders, notice, judgment, and the appointment and duties of class counsel.

U.S. state class action rules are modeled after Rule 23. Some states have adopted versions of Rule 23 directly into their civil procedure rules; others retain broader or narrower definitions. The core idea remains the same, providing a procedural mechanism for multiple similarly-situated plaintiffs to litigate collectively where individual suits would be impractical.

Rule 23 is procedural and applies across subject areas, but there are some constitutional principles that restrict its use where individualized issues dominate. In addition to civil rights claims, class actions may be used for all kinds of consumer fraud claims including:

• Breach of warranty.
• Defective products.
• Wage and employment.
• Antitrust or competition violations.

Due process generally discourages and sometimes forbids certification if doing so would relieve plaintiffs of proving individualized elements such as causation, reliance, or damages, or prevent defendants from presenting individualized defenses.

A class action allows a group of similarly situated plaintiffs to file and prosecute a lawsuit on behalf of a larger group or “class.” Generally speaking, a certified class action applies to all class members who do not formally exclude themselves from the outcome. The legal definition of a class action under Rule 23 is that one or more members of a class may sue or be sued as representative parties on behalf of all members only if:

• The class is so numerous that joinder of all members is impracticable.
• There are questions of law or fact common to the class.
• The claims or defenses of the representative parties are typical of the claims or defenses of the class.
• The representative parties will fairly and adequately protect the interests of the class.

A class action is a strong, effective procedural mechanism to assert and vindicate alleged wrongs on behalf of similarly situated individuals or entities, often where proceeding at scale effectively redresses an imbalance between smaller value or uneconomic claims against larger, better resourced defendants.

Class action attorneys generally work on a “no win, no fee” contingency basis. Their costs (or disbursements) and their recovery WIP (Work in Progress) or lodestar (as it is called in the United States) are either paid from or in addition to the class recovery, subject to fulsome open court approval. The presiding court will review the fee request, supported by data regarding time and funds expended. Contingent fee recoveries can range from 10 to 35% based on many factors, including the recovery, complexity of the case, and resources expended.

Average class action lawsuits take two to three years from filing to final distribution, though appeals can extend timelines to five years or longer. Many factors impact the timetable including the motion practice of both sides, the complexity of the case, the scale of discovery, and the efficiencies of the parties and the court itself. 

Generally, the standing requirements are that the plaintiff (and putative class representative) must personally have:

• Suffered some actual or threatened injury.
• That injury can fairly be traced to the challenged action of the defendant.
• That the injury is likely to be redressed by a favorable decision.

With some exceptions, for example the Fair Labor Standards Act, regarding employment claims, U.S. class actions are brought by class representatives on an opt-out basis on behalf of a class. That means once the class is certified, all individuals or entities within the class definition are presumptively included in the class and are represented by class counsel.

Depending on the proposed class definition, the size of the class can range from double digits to tens of millions.

Case management by the courts is indispensable to effective and efficient class action process in the United States. The Federal Judicial Center publication “Managing Class Action Litigation: A Pocket Guide for Judges” states “[c]lass actions demand that judges play a unique role. There is no such thing as a simple class action. Every class action has hidden hazards that can surface without warning”.

Rule 16 of the Federal Rules of Civil Procedure mandates pre-trial case management conferences, including of class actions, which, together with the attendant case management statement filed by the parties, provide critical disclosure to the court, the parties and the class of the status, progress, pace, and prospective resolution of class action proceedings.

The United States’ robust discovery system provides for document production, written interrogatories and oral depositions as well as expert evidence, and class actions are no exception. The class plaintiff should expect to provide discovery of his or her claim, including to sit for a deposition. These rules facilitate extensive discovery in class actions both in advance of the class certification motion, and, if the motion is granted, thereafter. As an appellate court ruled; “discovery in aid of the certification decision often includes information required to identify the nature of the issues that actually will be presented at trial. In this sense, it is appropriate to conduct controlled discovery into the ‘merits’, limited to those aspects relevant to making the certification decision on an informed basis.”

Class action remedies typically involve the defendant paying a negotiated sum to the class and/or injunctive relief associated with the claims (such as procedural, commercial, or behavioral changes by the defendant entity).

Class action settlements are generally resolved through mediation, facilitated by third-party neutrals. Generally speaking, putative class action settlements are vetted by the court and the class through a two-step process. Firstly, preliminary approval where the parties present the proposed terms to the court, and thereafter to the class, via a court-approved notice program. Secondly, final approval where the court reviews and assesses the class members’ response to the notice and proposed settlement.

The basis of each class member’s recovery should be described in the class notice and/or on the claims administrator’s website. Factors may include the specifics of the particular claim, how long the claimant used a specific product or platform, and the number of claimants.

The provision of class recoveries has rapidly evolved from paper checks arriving via snail mail to electronic transfers by direct deposit and digital apps (such as Venmo). Courts increasingly require a published report of the claims rate and class members’ recoveries.

Generally speaking, if a presiding court approves a settlement agreement after the final approval hearing, the court must make and enter a judgment. The judgment should and, in some jurisdictions, must include a provision for the retention of the court’s jurisdiction over the parties to enforce the terms of the judgment. 

There are consistently attempts to reform the class action regime in the United States. Among the latest are corporations’ use of forced arbitration to eliminate contingent class action litigation in favor of individual arbitration claims.