No business owner wants to hear that his or her company is being sued in a class action lawsuit. Aside from the obvious implication that you’ve somehow upset a whole lot of people, the downsides of defending a class action lawsuit are abundant due to the high costs associated with increased complexity. If you find yourself on the defending end of a class action lawsuit in Wisconsin, it’s best to have an understanding of a few key concepts.

Class Action Basics

Unlike most lawsuits, which are brought by a single plaintiff, class action lawsuits are brought by multiple plaintiffs against (usually) a single defendant. There are a number of characteristics that these plaintiffs must have in order to bring a suit in state courts. Wisconsin law provides:

“When the question before the court is one of a common or general interest of many persons or when the parties are very numerous and it may be impracticable to bring them all before the court, one or more may sue or defend for the benefit of the whole, except that no claim may be maintained against the state or any other party under this section if the relief sought includes the refund of or damages associated with a tax administered by the state.”

The Wisconsin statute is fairly vague in comparison to Federal Rule 23, which governs class action lawsuits brought in federal courts. Many have lamented the lack of clear guidance, and reforms have been suggested for a better class action law. In the meantime, numerous cases have helped provide a little more understanding about Wisconsin class action lawsuits.

Wisconsin Class Action Requirements

Before a class action lawsuit can occur, a judge must certify the class.  Over the past 40+ years, the Wisconsin judiciary has identified the following requirements for class action plaintiffs:

  1. Common Interests – all members of the purported class must desire the same outcome.
  2. Representation – the named plaintiffs who will represent the class must have the same desire as the class.
  3. Joinder must be Impractical – the trial court must decide both common interests and whether joinder is impractical.

In addition to the above factors, before the court can certify the class, it must weigh the advantages of disposing of the entire controversy in one proceeding against the difficulties of combining divergent issues and persons.

Federal Class Action Guidance

If a class fails to certify, then the suit cannot be brought as a class action. Depending on the circumstances, this may be good or bad for a potential defendant. Unfortunately for Wisconsin litigants, case law governing class action certification is scant. However, Wisconsin does recognize federal law as persuasive authority on certification issues. Federal case law has revealed that the class must be bound by common questions of law and fact.

In a pivotal case in 2011, Wal-Mart Stores Inc. v. Dukes, significant strides were made to assist defendants in challenging the commonality issue. In that case, the Supreme Court tightened up the commonality conditions by requiring the plaintiff to show that the answer to a common question will resolve a central issue in the case. It also allowed for the production of substantial evidence, expert and other testimony to give insight into the questions of facts in the case, thereby allowing defendants to challenge the issue.

If your company is facing a class action lawsuit, contact the Wisconsin class action experts at Kerkman Wagner & Dunn today.

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