Unjust Enrichment: The Common Class-Action Cause of Action, Explained

Unjust enrichment is an equitable claim that lets a plaintiff recover a benefit a defendant received and kept at the plaintiff's expense when it would be unfair to let the defendant keep it. It generally requires that the defendant received a benefit, that the benefit came at the plaintiff's expense, and that the circumstances make retaining it unjust. Because it does not depend on a contract, it is often raised in consumer cases where a company collected money it should not have been allowed to keep.

The exact formulation varies by state, but most courts require three things: (1) the defendant received a benefit; (2) the benefit came at the plaintiff's expense; and (3) it would be inequitable, or unjust, for the defendant to retain the benefit without paying for its value. Some states add that the plaintiff must lack an adequate remedy at law, which is why unjust enrichment is often pleaded in the alternative to a contract or statutory claim.

Breach of contract enforces a promise the parties actually made; unjust enrichment applies when there is no enforceable contract but one party still ended up with something it would be unfair to keep. For that reason a valid contract covering the same subject usually bars an unjust-enrichment claim, and plaintiffs typically plead unjust enrichment "in the alternative" in case the contract claim fails. It is sometimes called quasi-contract because the law imposes an obligation to pay even though the parties never agreed to one.

The usual remedy is restitution — the defendant must give back the value of the benefit it was unjustly given, measured by the defendant's gain rather than the plaintiff's loss. In some cases this takes the form of disgorgement, where a defendant surrenders profits it should not have been allowed to keep. In a class action, that recovery is typically distributed to class members on a pro rata basis after fees and costs.

Consumer class actions often involve money a company collected across a large group of buyers — through allegedly false advertising, hidden or improper fees, or defective products — where individual contracts are thin, missing, or vary from person to person. Unjust enrichment lets plaintiffs frame the case around the company's gain instead of each consumer's individual deal, so it is frequently pleaded alongside statutory consumer-protection and warranty claims. Being named in such a claim is an allegation, not a finding that any wrongdoing occurred.