Will Fritz  |  June 7, 2021

Category: In Depth Features

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10 Largest Class Action Settlements in American History
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Bad products, false advertising, and other shady business practices can often hurt American consumers. Fortunately, the US justice system has a pathway for consumers to be compensated for these slights: class action lawsuits. When particularly egregious actions are involved, settlements can reach incredible figures — sums which are paid out to consumers.

Class action lawsuits have been settled for amounts in the billions of dollars over allegations of all kinds of misconduct and poor products, from securities fraud to automobile emissions tampering to complications from breast implants.

Here is a roundup of 10 of the largest class action settlements in American history and how they’ve affected everyday consumers’ lives.

10. Breast implants

Dow Corning Corporation silicone breast implants were the subject of the 10th largest class action settlement in US history.
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Dow Corning Corporation agreed in 1998 to pay out more than $3.2 billion to around 170,000 women to settle a class action lawsuit claiming injuries and illnesses caused by silicone breast implants. The members of the class alleged they suffered things like surgery complications, implant rupture, rheumatoid arthritis and other ailments stemming from their implants.

9. Cendant Corporation accounting fraud

Accounting irregularities at Cendant Corporation led to the ninth-largest class action settlement in US history.
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Accounting irregularities uncovered at travel and real estate company Cendant Corporation in 1998 led to a $3.2 billion settlement that was approved for shareholders two years later. Cendant was formed via a merger between CUC International and HFS Inc. in 1997. Not long after that, former CUC accountant Casper Sabatino tipped off authorities to a scheme that prosecutors said inflated the value of CUC by more than $500 million. When the allegations were revealed, Cendant’s stock price dropped by more than $14 billion in a single day.

Sabatino, who apologized for his actions, and several other Cendant and CUC executives were sentenced to prison time in relation to the scandal. Cendant’s brands at the time included Avis, Century 21, Coldwell Banker, Howard Johnson and Ramada. The company spun off its real estate and hotel businesses and changed its name to Avis Budget Group in 2007.

8. Native American trust lands

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The federal government agreed to a $3.4 billion settlement in 2009 after 13 years of litigation over the question of whether it had improperly managed income from lands that were supposed to be held in trust for Native Americans. The class action stemmed from the 1887 Dawes Act, which enabled the Department of the Interior to take ownership of the trust lands, with the expectation that income derived from the lands would go to individual Native Americans. 

In 1996, Blackfeet Confederacy member Elouise Cobell and four other Native American representatives filed the class action lawsuit against the Department of the Interior and the Department of the Treasury, claiming that the federal government had not in fact distributed income from operations on the trust lands as promised, which included things like oil drilling. Congress passed legislation in 2010 designating $1.4 billion to the members of the Class and $1.9 billion for a Land Buy-Back Program and a newly created educational scholarship fund for American Indian and Alaska Native students.

7. Fen-Phen diet drugs

American Home Products changed its name to Wyeth after being forced to pay the sixth-largest class action settlement in US history.
(Photo Credit: 360b/Shutterstock)

In 2000, a federal judge approved a $3.75 billion settlement in a class action lawsuit against drug company American Home Products, makers of fenfluramine, after the fen-phen diet drug combination was linked to potentially fatal heart valve damage. 

The company — which changed its name to Wyeth two years after the settlement was approved — sold the products under the brand name Pondimin until 1997, after a Mayo Clinic study made the connection between the drugs and heart damage. More than 6 million people took fen-phen before sales stopped.

6. WorldCom accounting fraud

WorldCom, the long distance telephone company that has since changed its name and been purchased by Verizon, had to pay out more than $6.1 billion in settlements after it admitted that the company had inflated assets between 1999 and 2002
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WorldCom, the long distance telephone company that has since changed its name and been purchased by Verizon, had to pay out more than $6.1 billion in settlements after it admitted that the company had inflated assets between 1999 and 2002. 

WorldCom disclosed it misreported around $3.9 billion in 2002, then later disclosed another $3.3 billion in misreported profits. WorldCom’s founder and former CEO Bernard Ebbers, along with other workers and executives, served prison time for the scandal, though Ebbers was released early from his sentence and died in 2020.

5. Visa/Mastercard antitrust

Visa, Mastercard, and banks including Bank of America, Citigroup, and J.P. Morgan Chase & Co. agreed in 2018 to a $6.2 billion settlement in a lawsuit alleging the card companies had fixed swipe fees to benefit the banks
(Photo Credit: Chepko Daniel Vitalevich/Shutterstock)

Visa, Mastercard, and banks including Bank of America, Citigroup, and J.P. Morgan Chase & Co. agreed in 2018 to a $6.2 billion settlement in a lawsuit alleging the card companies had fixed swipe fees to benefit the banks. The lawsuit, which dates back to 2005 and was brought on behalf of merchants who pay the swipe fees, had already been settled in 2012. However, opponents rejected that settlement, arguing it limited merchants’ ability to file future suits. The 2018 settlement represented about a $900 million increase over the original one.

4. Enron securities fraud

In the biggest securities settlement of all time, shareholders in Enron were approved to receive $7.2 billion in 2008 after years of litigation over the infamous scandal.
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In the biggest securities settlement of all time, shareholders in Enron were approved to receive $7.2 billion in 2008 after years of litigation over the infamous scandal. Enron used accounting techniques, including mark-to-market accounting — essentially allowing the company to list estimates of profits rather than actual profits — to misrepresent earnings. 

When Enron and Blockbuster entered into a partnership to enter video-on-demand, for example, Enron listed its expected earnings from the expected growth of that market, rather than actual earnings. Enron also used what are known as “special purpose vehicles,” or SPVs, to hide debt and losses. The schemes caught up with Enron when analysts began questioning the company’s earnings, and Enron’s stock price dropped from a high of $90.95 in 2000 to just $0.26 on Dec. 2, 2001, the day the company went bankrupt. 

Shareholders had to have purchased Enron stock between September 1997 and the date the company went bankrupt in December 2001 to be eligible for a payout in the settlement.

3. Volkswagen emissions scandal

A $14.7 billion settlement was approved in 2019 in connection with the Volkswagen emissions scandal.
(Photo Credit: Muhammad Izzat Termizie/Shutterstock)

A $14.7 billion settlement was approved in 2019 in connection with the Volkswagen emissions scandal. The German automaker had installed “defeat devices” that allowed more than 500,000 of its diesel vehicles to automatically detect the conditions of an emissions test in the United States and change their driving behavior. This allowed the cars to deceive emissions regulators — they would appear compliant with emissions rules while under test conditions, but switch to deliver more power, and more emissions, when in normal driving mode. 

The settlement, reached three years after the Environmental Protection Agency first filed its lawsuit against Volkswagen in 2016, included a $10 billion buyback program, and payments and emissions fixes to owners who did not wish to sell their vehicles back to Volkswagen.

2. BP Gulf of Mexico oil spill

In April 2010, the Deepwater Horizon oil rig, operated by oil company BP, exploded in the Gulf of Mexico off the coast of Louisiana, killing 11 workers and injuring 17. The disaster resulted in the second-largest class action settlement in US history.
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In April 2010, the Deepwater Horizon oil rig, operated by oil company BP, exploded in the Gulf of Mexico off the coast of Louisiana, killing 11 workers and injuring 17. The explosion caused thousands of barrels of oil to leak into the gulf for months — BP originally estimated about 1,000 barrels per day, but the U.S. government later estimated the leak peaked at more than 60,000 barrels per day. 

The leaking oil well was finally capped in September 2010. The largest maritime oil spill in history, the incident resulted in an oil slick of more than 57,000 square miles spreading over the Gulf of Mexico and more than 1,100 miles of shoreline being polluted with oil. The federal government and five states on the Gulf of Mexico reached a $20 million settlement with BP in October 2015.

1. Big Tobacco

The Big Tobacco settlement was the largest in US history.
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Of all of the class action lawsuits in US history, the Big Tobacco settlement by far takes the cake for the largest settlement of all time.

The Tobacco Master Settlement Agreement — reached in 1998 between the four largest cigarette manufacturers in the United States and attorneys general of 46 states, five US territories, and the District of Columbia — required the tobacco companies to pay out more than $206 billion to the included states over 25 years, plus another $9 billion per year in perpetuity. Florida, Minnesota, Mississippi and Texas, which have their own tobacco settlements, were the only four states not to sign onto the agreement.

The agreement — which currently dwarfs all other class action settlements in size, with the next largest barely reaching the $20 billion mark — settled dozens of separate state lawsuits filed to recover the billions of dollars in health care costs associated with smoking.Ultimately, dozens more tobacco companies signed onto the agreement, promising to pay for decades of marketing their addictive products to children and the negative health impacts that went along with that.

In addition to payments to states, the $206 billion settlement included $1.5 billion for an anti-smoking campaign and various stipulations on the ways tobacco companies can market their products, including prohibitions on things like targeting youth, brand name sponsorship of concerts and other events, paid product placements of tobacco products in media, outdoor advertising, using cartoons to advertise tobacco products, and more.

Now, is it possible we will ever see another settlement as large as the Tobacco Master Settlement Agreement?

Technology — specifically online privacy — may be one arena in which there is the potential for a large class action lawsuit to result in a settlement that breaks the record of the Tobacco Master Settlement Agreement in the next 10 years, class actions lawyer Daniel Karon said.

“I would think something technology or privacy based, considering all the peril that goes along with people’s technological experiences,” Karon said.  

At the other end, Karon thought one area in which it might be unlikely to see large settlements is climate change lawsuits, despite the growing damage the United States is likely to face from rising temperatures and sea levels in the next century.

“Causation could be tough,” he said. “I mean, who do you blame when Miami beaches start to erode, whose fault is that?

“Kind of like COVID,” Karon continued, “you get sick, you don’t know who causes it. Seems to be the same kind of theory in a sense — if you know climate is eroding, how do you know who caused it?”

Those are the Top 10 largest class actions in American history!

Class action lawsuits can result in hefty settlements for consumers that can reach amounts in the millions or, as the lawsuits described here illustrate, even billions of dollars. But many consumers likely don’t even realize they can get money from these settlements. That’s where Top Class Actions comes in — we are here to track class action lawsuits and settlements throughout the legal process, and our In-Depth Features section will continue to track case studies, patterns, historical settlements, and more.

Are there any important class action settlements you think we missed? Let us know in the comments!

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18 thoughts on10 Largest Class Action Settlements in American History

  1. Stephanie Lee Clune says:

    please add me to the law suit I am 45 and have been smoking since I was 15 years old and have tried to quit on my own but have failed several times

  2. Michelle Nelson says:

    Please add me.I have smoked for more than 20 years

    1. John Houser says:

      I’m 72 and had 40 heart caths 2 bypass 2 tar and a heart transplant I smoked fo 40 years now have cancer

  3. Lindsey Bielski says:

    Please add me the the tobacco settlement. I started smoking 25 years ago and have tried everything and can’t stop

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