Class action lawsuits have led to some significant settlement payouts, with amounts reaching into the billions. Below is a list of the largest class action settlements ever recorded, showcasing the scale of these legal outcomes.
The Top 10 Class Action Settlements
Tyco The Tyco accounting scandal of 2007 resulted in over $3 billion in settlements. Tyco International contributed around $3 billion, while accounting firm PwC covered the remaining $200 million. CEO Dennis Kozlowski was sentenced to prison and ordered to pay nearly $167 million in restitution, while CFO Mark Swartz also served time and paid $72 million in restitution.
Cendant Cendant Corp faced a class action in 2000, leading to a $3.2 billion payout approved by federal judges in New Jersey. The lawsuit claimed that a merger had artificially inflated the company’s share value, and the ensuing scandal resulted in a $14 billion loss in stock value in just one day. Key executives, including Chairman Will Forbes and Vice Chairman Kirk Shelton, were imprisoned.
Silicon Implants A mid-1990s class action over silicon breast implants resulted in a payout of $3.4 billion (down from $4.75 billion) due to health issues linked to the implants. Although the initial settlement fell through, manufacturers like Bristol-Myers Squibb ultimately agreed to the $3.4 billion payout, while Dow Corning settled its claims in bankruptcy court.
American Indian Trust In 2011, a $3.4 billion settlement was reached in a case against the American Indian Trust, alleging misuse of funds from land trust accounts dating back to the 19th century. Approximately 325,000 individuals received payouts of about $1,000 each, with distributions beginning in 2012.
American Home Products The 2000 class action involving the dietary drug Fen-Phen resulted in a $3.75 billion payout due to associations with heart valve damage. A total of $1.5 billion was allocated to affected users.
WorldCom The 2005 WorldCom accounting scandal led to a record $6.1 billion class action settlement. Shareholder fraud was at the center of this case, with JP Morgan contributing $2 billion. Executives Bernie Ebbers and Scott Sullivan faced prison time for their roles in the fraud.
Enron The Enron securities fraud case from 2008 resulted in a $7.2 billion payout. The company was accused of defrauding customers prior to its bankruptcy. Major banks, including JP Morgan and Citigroup, contributed significant portions of the settlement, benefiting nearly 1.5 million individuals, including institutional investors.
Volkswagen Following the 2016 emissions scandal, Volkswagen reached a $14.7 billion settlement for cheating on diesel emissions tests. This settlement was intended to cover vehicle buybacks and provide cash settlements to around 475,000 affected diesel car owners.
BP Gulf of Mexico At $20 billion, this settlement is among the largest in history, approved by federal judges in 2016. The funds addressed federal penalties, with approximately $5 to $6 billion directed to state and local governments. Notably, BP could claim $15 billion of this settlement as a tax write-off.
1998 Big Tobacco Class Action Settlements The largest settlement ever recorded occurred in 1998 against major tobacco companies like Philip Morris and RJ Reynolds, costing $206 billion. This monumental payout covered medical treatments for smoking-related illnesses and was set to be distributed over 25 years, involving public prosecutors, which is uncommon in class action cases.
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