Biggest Class-Action Lawsuits of All Time
Class-action lawsuits are usually brought against large corporations or entities by high-profile attorneys or firms on behalf of any number of clients who have alleged to have been harmed by the actions of said corporation or entity. They are similar in nature to the settlements that the U.S. government elicited from the tobacco industry in the 1990s, except that in class-action suits, the individual plaintiffs actually get to see some of the money. Those listed below are among the largest awards ever brought to bear in our courtrooms.
7. Fiber-optic giant Nortel Networks settled two separate class-action suits, which had been filed on behalf of investors, for a total of $2.4 billion in 2006. They had falsified equipment sales reports and were sued for fraud under federal securities laws after shareholder's saw their stock, once valued at $124 a share, plummet to 47 cents a pop.
6. In 1995, a company called Cendant had to admit to its investors that it had been falsifying financial records for the past decade, and that their figures were roughly half a billion dollars off the mark, forcing a settlement of $3.1 billion. Former Vice Chairman Kirk Shelton had to pay back the company to the tune of $3.27 billion (at the rate of, inexplicably, $2,000 a month) and also had to serve jail time.
5. Another big player in the telecommunications game, Tyco, fell in line with the other dominoes of the day, taking the accounting firm PriceWaterhouseCoopers down with them. They finally settled a series of class-action suits in 2007 for $3.2 billion, found guilty under laws that had been on the books since the Great Depression.
4. A class-action suit was settled in 1994 when women claimed that their silicone breast implants had caused them to suffer from damaged immune systems sued the major producers of the implants (most notably Corning, Baxter and Bristol-Meyers Squibb). The total: $3.4 billion.
3. In 2001, a federal judge ordered Exxon-Mobil to pay $5 billion to those affected by the Valdez oil-tanker spill off Prince William Sound in Alaska. Years later, the amount was reduced to just $500 million. The spill adversely affected roughly 1,300 miles' worth of Alaskan coastline.
2. Much of the post-9/11 stock market crash can be laid at the feet of Worldcom, a company that was brought up on fraud charges. The Securities and Exchange Commission determined that Worldcom's books had been not cooked, but burned, with over $11 billion in discrepancies. The class-action settlement amount was just over half of that, at $6.2 billion.
1. The name "Enron" has become synonymous with fraud, as the energy-trading giant collapsed at just about the same time as did Worldcom. With top dogs Jeffrey Skilling and Ken Lay run through criminal courts as well, Enron's class-action settlement weighed in at $7.2 billion.