The act of failing in a group. The group must be at least two people, which is pretty obvious. Clusterfailing includes but is not limited to: Tripping, doing something stupid, or just being plain stupid. Verbal action does not always count as a cluserfail action.
After Chet saw twelve bandgeeks slip and fall in the mud on the field at his high school football game, he knew he had witnessed a clusterfail.
When you suddenly, completely, and epicly fail (see epic fail) at EVERYTHING YOU POSSIBLY COULD for no particular reason, and with no action you could have possibly taken, even if you had known that these events would occur for the entire duration of your mortal existence.
Total extinction of the majority of life on Earth, your girlfriend is cheating on you, and you just learned that Satan has doomed you to reincarnate as a McDonald's cherry pie?