Why You Should Be a Representative Plaintiff

In March 2011, after lengthy and contentious NFL labor negotiations fell apart, NFL players filed a lawsuit alleging violations of federal antitrust, state contract, and tort laws. The representative plaintiffs were Drew Brees, Peyton Manning, and Tom Brady, among other star players.  Shortly after, four retired NFL players, including Hall of Fame defensive end Carl Eller and Pro Bowl running back Priest Holmes, filed a similar federal class action lawsuit acting as representative plaintiffs.

The terms “representative plaintiff” and “representative action” may mean very little to those outside the legal community or a court room, but, as these football stars are discovering, they can be very important in bringing change and remedy when wrongful conduct causes harm and violates individual rights.  The reality is that you don’t have to be a star NFL quarterback to be a representative plaintiff or to file a representative action.  This begs the question: what is a representative action and how does one become a representative plaintiff?

Class action lawsuits and derivative action lawsuits

A “representative action,” can refer to both a “class action” and a “derivative action.”  In a class action lawsuit, one or a few parties sue on behalf of themselves and other parties that are similarly situated, also referred to as a “class.”  In a securities class action, the representative plaintiff is an individual or institutional shareholder who seeks monetary and other benefits for the class of shareholders and/or former shareholders.

In a shareholder derivative action, the representative plaintiff is one or more individual or institutional shareholders who pursue claims on behalf of a corporation against negligent or fraudulent company leaders.  Representative plaintiffs in a derivative action lawsuit seek to improve the public company’s corporate governance, to secure monetary payments in the form of damages or the recovery of assets from defendant officers or directors, and/or to remove individual board members or members of executive management whose misconduct injured the corporation.

What does it mean to serve as a representative plaintiff?

By serving as a representative plaintiff, you play a vital role in representing similarly situated individuals or entities in pursuing important legal rights.  You ensure their interests are protected and pursued by taking a stand against unfair treatment, wrongdoing, or fraud. As a representative plaintiff, you are informed about significant developments in the case and work with attorneys to make important strategic decisions regarding the conduct and disposition of the litigation.

Take a stand against wrongdoing and fraud

Every year, many individuals and entities serve as representative plaintiffs in significant lawsuits.  As a shareholder, you can take a stand against corporate fraud and other misdeeds by  acting as  a representative plaintiff when your stock investment suffers due to corporate wrongdoing. Representative plaintiffs working with lawyers have recovered billions of dollars through representative actions – money that may otherwise have stayed in the bank accounts of greedy corporate executives. These legal actions have also resulted in changing the way corporations conduct business by requiring the institution of effective corporate governance measures.

Without a representative plaintiff to pursue claims against wrongful conduct, the culprits may be left unaccountable for their actions at your expense.  Hiring a competent law firm like Robbins Umeda LLP can help you to address the wrongdoing and hold individuals accountable.

Robbins Umeda LLP represents clients on a contingency basis – we are not paid unless we succeed in recovering monetary or other substantial benefits for our clients.  Whatever the outcome, representative clients of Robbins Umeda LLP are not asked to pay for our fees or costs.

Learn more

To learn more about your rights as a shareholder and becoming a representative plaintiff, contact us.

You can read more about acting as a representative plaintiff in shareholder derivative actions, securities fraud class actions, and corporate merger and acquisition class actions by visiting our FAQs pages.

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