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Do's and Don'ts When You Receive A Class Action Demand Letter
- Immediately make certain that no one in the company is deleting files or e-mails that might pertain to the case. This is required by law. You can give a variety of reasons without revealing there is a threatened class action.
- Contain the problem. No one should know there is a threatened class action except the people involved in decision making. You want to keep the matter out of social media. One disgruntled employee can put it into the blogosphere and make things doubly difficult for the company.
- No food labeling class action has ever gone to trial. They get knocked out in pretrial motion practice or they settle. You need to evaluate the strength of your case early on to pick a strategy.
- Food class actions are attorney-driven. Some attorneys will settle early (i.e. in the first 6 months). Other attorneys insist on filing the action to gain leverage. Figure out the type of adversary you are facing and factor that into your strategy.
- Class action demand letters give you thirty days to respond. Use that time wisely. Drill deep into your case so you are positioned to execute step 6, below, before the thirty days end.
- Every class action has strengths and weaknesses. Many defenses are very technical and specific to class actions. It's key to put your strengths and their weaknesses into a detailed letter attacking the plaintiff and send it before the first thirty days elapse so you set the tone for settlement discussions and other negotiations. This letter is an important opportunity to get ahead of the case that should never be wasted.
- Don't show weakness. You need to display credibility. Even the best strategy can't succeed if the person executing it has no credibility. Your response letter (step 6, above) needs to come from someone who knows the class action game. Plaintiffs' counsel will recognize an experienced adversary and give the proper respect. This is no place for rookies.
Defending class actions is like hunting a moving target. It takes experience, strength and timing to get the best result.
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