5 Biggest Class Action Settlements or Verdicts Ever
Every day, there are numerous class actions making their way through the courts at both the state and federal level. Some go on for years without ever reaching the critical stage of class certification by the court which often is the crucial step towards settlement – the famous employee discrimination class action suit brought on behalf of female employees of Wal-Mart went on for 11 years before reaching a final defeat in 2011 at the US Supreme Court.
Others reach success, however, with a spectrum of payouts on behalf of the class. A few reach the mega-heights of settlements in the billions. Below, we take you through the five biggest class action settlements or verdicts in US history.
Tobacco Master Settlement Agreement (1998): $206 Billion
While not technically a class action as this consolidation of cases was brought by 46 state attorneys general on behalf of their states against numerous tobacco makers, it merits inclusion for its sheer size and similarity to a typical class action. Philip Morris, R.J. Reynolds, Lorillard, and Brown & Williamson settled with the attorneys general for costs incurred by the states for treating smoking-related illnesses in their Medicaid programs and also protected the companies from future private litigation. The $206 billion is in the process of being paid to the states over 30 years.
Enron Securities Class Action (2006): $7.2 Billion
Shortly after 9/11, Enron shocked the world by going bankrupt after being considered one of the largest, most innovative and profitable companies in the world up until right before its bankruptcy. Investigations revealed rampant corruption by executives to hide company losses and present false financials to investors, who lost everything when the stock went to nothing. Those same investors received the largest securities class action settlement in history: $7.2 billion.
Worldcom Securities Class Action (2005): $6.2 Billion
Close behind Enron is the similar situation that occurred at WorldCom at around the same time. In the late 1990s, WorldCom was posed to be the largest communications company in the world, but when a proposed merger with Sprint fell through, its CEO Bernie Ebbers began engaging in manipulations to keep the company’s stock price high, including taking $400 million from the company to prevent him from having to sell his stock. That was just the tip of the iceberg of the financial wrongdoing, and the company went into bankruptcy. In 2005, investors received a $6.2 billion settlement in their securities class action.
Exxon Valdez Oil Spill Litigation (2001): $5 Billion
Prior to the 2010 BP oil spill, the most infamous oil spill in recent history had been the Exxon Valdez oil spill in 1989 which spilled millions of gallons of oil into Prince William Sound, Alaska when the tanker accidentally ran ashore. Twelve years later, a jury awarded $5 billion in punitive damages to around 32,000 plaintiffs in the class (about $150,000 per plaintiff on average), although that number was later reduced to $500 million.
Dow Corning Breast Implant Litigation (1998): $3.2 Billion
While silicone breast implants became popular in the 1970s and 1980s, by the early 1990s it became well-known that the implants caused a significant risk of rupturing and causing autoimmune disease. Numerous individual and class action lawsuits were filed against implant manufacturer Dow Corning, eventually sending it into bankruptcy, with the largest class action settlement reaching $3.2 billion.