Class action lawsuits have emerged over the years as a powerful tool for groups of people, such as consumers, to collectively bring legal action against a single or collective entity. However, despite its usefulness in a legal setting, there are still many misconceptions regarding how it is utilized. To help address these misconceptions, we’ve turned to the work of Juan Monteverde, a leading securities attorney in New York City whose efforts include legal actions tied to class action lawsuits. Read on for a closer look at the attorney’s work and the helpful insights it can provide into the way class action lawsuits function in the U.S.
A Look at Monteverde’s Professional Achievements
In order to better understand this field of law, let’s first take a look at the kinds of cases and legal actions in which Juan Monteverde participates in a professional capacity. This work is conducted through his law firm, Monteverde & Associates, which has emerged in the New York City area as a top advocator of shareholder rights. While based in the city, and conducting much of its work locally, the firm is licensed to practice on a national level and regularly does so. This has seen its efforts be connected to legal actions at a variety of levels of appellate courts, all the way up to the U.S. Supreme Court.
Much of the firm’s work centers around protecting investors and consumers in cases of corporate misconduct. Past cases have involved instances where shareholders have incurred financial losses due to fraud or where consumers have incurred such losses due to misleading advertising. The firm engages in work beyond this, but this can be a key point to recognize as it does a good job of illustrating one possible context of a class action lawsuit — a case where a corporate entity may have caused harm or loss to a group of people.
In general, the firm works with two types of cases when it comes to shareholder rights. The first type of case is typically conducted at the state level and involves what’s considered to be “breaches of fiduciary duty.” These cases often come about when a board of directors fails to execute its duty to engage in “care, good faith, and loyalty.” This can manifest in many ways, but an example of this might be when a member of the board gets rewarded in some way for selling the company to another firm. If this reward and/or sale comes at the expense of the shareholders of the company, this action may constitute a breach of fiduciary duty.
A second type of case related to the firm’s work is one that is usually conducted at the federal level. These cases involve what is known as a “proxy statement.” When a merger takes place, the involved companies are required to create these statements in order to provide an in-depth understanding of the company’s valuation and its activity as a whole. However, if a company misrepresents itself on a proxy sheet, for instance, to make its valuation appear lower, it can be a violation of the law. Again, such activity could be detrimental to shareholders and could result in financial loss due to unfair compensation during a merger.
Why the Impetus for Class Action
Now that we have an understanding of the type of work conducted at the attorney’s firm, we can begin to have a better understanding of why this work lends itself to class action lawsuits. Let’s first consider the case of a legal action in which there is a single plaintiff. Perhaps that individual has been financially harmed to a great degree and feels that this financial harm is potentially the result of illegal action by another party. In this case, the individual may feel it prudent to attempt to recoup their losses by hiring an attorney and going through the considerable difficulty of mounting a lawsuit.
This model for civil litigation may work in a case where an individual has incurred substantial financial loss, but what about in a case where an individual has incurred a relatively small loss? In these cases, an individual may not feel compelled to mount legal action, even if they feel their loss is the result of illegal conduct. Logically we can see that such an individual may not feel it is worth their time, or that it may not make financial sense, to engage in such a lawsuit. Now let’s consider such a situation where a large group of individuals have all incurred relatively small financial losses as the result of potentially illegal activity. Even though no single individual may want to bring legal action on their own, collectively that group may have experienced substantial financial loss.
The Power of Class Action
The above situation brings us to the power of a class action lawsuit. In such a case, a group of individuals who have all incurred relatively small financial losses can collectively bring legal action against the entity that has caused their loss. Such a case can then proceed forward with the legal action attempting to recoup some of the losses of the individuals participating in the case. Even though it may not have made sense for any single individual to mount such a case, collectively the group of individuals can try to find a legal resolution to their situation. This illustrates how this type of class action lawsuit can be an incredibly powerful tool for finding justice and recouping financial loss when it occurs on a large scale.
While there is still much more that can be said on the topic of class action lawsuits, our hope is that the above information has provided an understandable introduction into the power of this legal tool. By using such a tool, attorneys and plaintiffs can be better empowered to come to equitable conclusions to legal disputes. The work of Juan Monteverde illustrates this concept well and can be used as a guide for individuals interested in this type of legal action. Look for further information from the attorney or his firm if you’re interested in additional learning on this or related subjects.