While national TV will attempt to televise British Patroleum’s newest attempt to plug their massive leak in the Gulf of Mexico this week, class action lawsuits continue to pop up against the embattled oil company. The Economist reports that in…
The Largest Class Action Settlements
It has been a big year for class action lawsuits. Most recently, the Equifax data breach has been hit with over 23 class action lawsuits so far. We have put together a small list of the largest class action lawsuits in America over the past two decades.
BP Oil Spill
Number of plaintiffs: 100,000
Total Award: $20 Billion
On April 20, 2010 the Deepwater Horizon oil rig experienced a major explosion which resulted in a massive oil spill. In the end a federal judge found that the spill was primarily BP’s fault due to gross negligence. This resulted in over $20 Billion in payouts from 100,000 plaintiffs.
Girls Just Want to Have Funds
Number of plaintiffs: 1 million
Total Award: Potentially $300 billion
By a close 6-5 decision in April 2010, the 9th Circuit Court of Appeals approved the class action, saying that WalMart, the world’s largest employer, must address the claims that it pays women less than men for the same jobs and is less likely to promote women for management positions. It is important to note that gender discrimination in the workplace is regrettably prevalent throughout society. Even in 2010, women earn on average 79 cents for every dollar men earn.
In a somewhat anemic official statement, a WalMart spokesman said “we do not believe the claims….WalMart is an excellent place for women to work and fosters female leadership among our associates and in the larger business world.” It’s unclear how much cash #1 on the Fortune 500 could be on the hook for, but some estimate up to $300,000 per instance of discrimination, for a total $300 billion if all one million women receive payments. I guess that’s the cost of the first half of their slogan (and apparent business model) “Save money. Live better.”
Department of the Inferior
Date: December, 2008
Number of plaintiffs: 300,000
Total Award: $3.4 billion
In a long-standing class action lawsuit settled last year, a group of Native Americans sued the United States government for grossly mismanaging their assets derived from oil, gas, and mineral rights, resulting in significant loss of income. The original complaint alleges that the Department of the Interior and the Bureau of Indian Affairs failed to keep records and destroyed documents proving their breach of trust to cover up their negligence. In the largest ever class action lawsuit against the government, more than 300,000 individuals initially asked for $27.5 billion in 1996. Last year, Attorney General Eric Holder agreed to pay the plaintiffs $3.4 billion, $2 billion of which would be set aside for a land consolidation scholarship program to benefit Native American investments.
“If it was me, I would fight on for another 100 years, I was not tired,” said Elouise Cobell of Montana’s Blackfeet Tribe. “I wanted to continue to fight on, but the deciding factor was, I live in Indian country and I see every single day people dying without their money and you just can’t take it anymore.” She added “We’ve suffered too long in the government’s hands and now it’s time for change.”
Breast. Settlement. Ever.
Date: February, 1994
Number of plaintiffs: 10,000
Total Award: $4.75 billion
About two decades ago, women with breast implants began noticing a correlation between their implants and a rise in illnesses such as lupus, scleroderma, and arthritis. The plaintiffs sued three major implant companies, Dow Corning, Bristol-Myers Squibb, and Baxter International, for medical fees and related damages. In 1993, a partnership of the defendants agreed to pay $4.75 billion over thirty years, one of the largest medical payouts ever. The class action lawsuit consolidated the claims of 10,000 patients, including 3,500 from California.
In a statement at the time, the companies maintained that their breast enhancing products were safe, adding that they settled the lawsuits in order to prevent additional legal action. It seems like quite a price tag for a safe product, which threw Dow Corning into a 9-year bankruptcy protection, ending in 2004.
Date: September, 2008
Number of plaintiffs: 1.5 million people and entities
Total Award: $7.2 billion
Remember when the sub prime bubble burst two years ago and a handful of Wall Street firms sent the economy into disarray? Well that happened a decade ago, too, on a much smaller, but much more sinister scale. In 2001, it was revealed that Enron lied about key financial information to keep investments coming in. When the scheme was uncovered, the company quickly went bankrupt amidst a deluge of lawsuits from angry investors. Plaintiffs originally asked for $40 billion, but after a six year legal battle, Enron agreed to pay $7.2 billion in the largest ever settlement for securities litigation. The second largest was in a related WorldCom accounting scandal, which the company settled for $6.1 billion.
Plaintiff awards ranged from $6.50 per share to $168.50 per share, depending on the size of the original investment. Plaintiff attorneys were also pleased with the result, especially considering that a judge awarded the firm managing the class action $688 million. “We’re pleased that the court recognizes the tremendous amount of work, skill and determination required to overcome significant obstacles in this complicated case and recover over $7 billion for defrauded investors,” said Patrick Coughlin, the firm’s chief trial attorney.
Playing the Market
Date: December, 1997
Number of plaintiffs: 1 million +
Total Award: $1 billion
In another financial malfeasance class action, a group of plaintiffs took on more than 30 brokerage firms for fixing prices to squeeze out more cash from investors. Among others, the class action targeted Merrill Lynch, Lehman Brothers and Goldman Sachs (yeah, those guys) for keeping the gap between buying and selling prices of stocks artificially wide to promote additional investments between 1989 and 1994.
Three years later, the Wall Street cohort agreed to pay $1 billion to duped investors, the largest civil antitrust settlement in history at the time. Still, the brokerages denied wrongdoing. “Although we believe our practices were entirely proper, it made no sense to continue litigating the merits of practices that are no longer followed when the matter could be resolved on an industry wide basis,” said Merrill Lynch spokesman Bill Halldin. It seems, however, that the events of the last two years indicate that the settlement wasn’t enough to get Wall Street to clean up its act.
Up in Smoke
Date: July, 2000
Number of plaintiffs: 700,000
Total Award: $144.8 billion (revoked May, 2003)
In 2000, a Miami jury awarded $144.8 billion, by far the largest class action settlement in history, to more than 700,000 plaintiffs who claimed they suffered from tobacco-related diseases. To their dismay, the plaintiffs never got their hands on the full amount, since an appeals court ruled three years later that the amount was excessive and “fundamentally unfair.” The 68-page report was peppered with strong language and concluded that “mere participation in the tobacco industry does not does not destine a corporation to legal suicide on the shores of bankruptcy.”
Flying the Crooked Skies
Date: June, 1992
Number of plaintiffs: 12.5 million
Total Award: $410 million
In the early days of the Internet, users weren’t quite as smart about technology and privacy as we are now. When it appeared that a group of four major airlines exploited this fact between 1988 and 1992, millions of plaintiffs lined up to target American, Delta, United, and USAir airlines in a massive class action lawsuit. The plaintiffs alleged that the airlines manipulated an online website, Airline Tariff Publishing Co., to fix prices for flights departing from 34 airports nationwide.
In 1992, the airlines settled for $44 million in cash and $365.5 million in travel coupons. Though this cash award is lower than some other suits on this list, it was one of the largest class actions ever filed at the time, including about 12.5 million angry customers. “While damages are not huge for the individual ticket buyer – for the whole class together are massive,” said an attorney who represented the plaintiffs. “That was the genesis of the lawsuit and we’re very pleased that the matter has been solved.”