Many class actions suits that you hear about in California are related to personal injury claims on the part of a large group of people. Class actions or mass torts may be filed when a company sells a defective product, for example, that causes injuries to many people. In one recent case, a class action suit is being filed against JPMorgan Chase for supposedly misleading investors.
Investors involved in the lawsuit claim that JPMorgan Chase misled them about how safe $10 billion mortgage-backed securities were. The bank sold the securities prior to the financial crisis that impacted the entire nation. According to reports, this is not the first action taken in regard to JPMorgan Chase. The company previously settled state and federal probes with a $13 billion payment.
The current class action involves investors who purchased certificates from trusts that were created by JPMorgan Chase. The investments occurred prior to March 23, 2009.
According to reports, a judge has certified the class action on a limited basis. Class actions must be certified before they can continue, and they can be certified in different ways. In this case, the judge certified the case to continue with regard to JPMorgan Chase's liability in the matter. However, he did not certify regarding damages.
The judge said that it was not clear how the damages could be valued, since the market was not very liquid at the time. He left it open for the plaintiffs to seek future class certification on damages if they can value the certificates that were purchased.
Class actions can be complicated, involving multiple steps and legal requirements just to get to the court case. Seeking knowledgeable assistance regarding participation in any class action claim is a good way to ensure you are taking the right steps at the right time.
Source: Reuters, "JPMorgan to face U.S. class action in $10 billion MBS case" Jonathan Stempel, Oct. 01, 2014