Class action
A class action is one lawsuit brought by a few people on behalf of a larger group that was harmed in the same way by the same company.
Also called: class action lawsuit, class suit, class action case
A class action is one lawsuit brought by a few people on behalf of a larger group that was harmed in the same way by the same company.
What it means
A class action is a lawsuit that one or a few people file on behalf of a much larger group, called the class. Instead of thousands of people suing separately over the same problem, one case covers everyone who was affected in the same basic way. Common subjects include hidden fees, data breaches, misleading labels and privacy violations.
In federal court, the rules come from Rule 23 of the Federal Rules of Civil Procedure. Many states have their own, similar rules. A judge has to approve the class before the case can go forward as a class action, and has to approve any settlement as fair, reasonable and adequate.
If you fit the description of the class, you are usually a member automatically. You don't hire the lawyers or pay them out of pocket. In a settlement, though, you normally still have to file a claim to get paid, unless the payments go out automatically.
What it means for you
Class actions are why you can get a notice about a case you never heard of. If you are a class member, the result can affect your rights whether or not you do anything. You can usually file a claim, opt out to keep your own right to sue, object to the deal, or do nothing. Doing nothing generally keeps you in the class and bound by the result, and in most cases means no payment. Check the deadlines on the official notice. Filing a claim directly with the settlement administrator costs nothing. Owed finds class action settlements you may qualify for and reminds you before the deadlines; you submit each claim yourself.
Example
Say a streaming service adds an undisclosed $2 fee to the bills of three million customers. Nobody is going to sue over $2. But two customers sue for the whole group, and a judge certifies a class of everyone charged the fee during a set period. The company later agrees to a settlement fund. Each class member gets a notice and can file a claim for a share.
FAQ
No. If a court certifies a class that covers you, you are included automatically and stay in unless you opt out by the deadline in the notice. To get paid from a settlement, you generally still have to file a claim.
Being a class member does not cost you anything, and filing a claim with a settlement administrator is free. The judge must approve class counsel's fees, which come from the settlement fund or are paid by the company, as the settlement states.
Related terms
- Fed. R. Civ. P. 23, Class Actions (Cornell Legal Information Institute)
- Federal Rules of Civil Procedure, as of Dec. 1, 2025 (U.S. Courts)
- 28 U.S.C. § 1332(d), class action jurisdiction (Cornell Legal Information Institute)
Updated Oct 18, 2026. Plain-English definitions for general information — not legal or tax advice.