When a person or a group or an organization decides to sue another person or group or organization, these cases are termed class-action lawsuits. If you win, you are awarded whatever amount the court decides to compensate you with. The US has seen many class-action lawsuits. Let’s check out some of the biggest class-action lawsuits in the US.
The Tobacco Master Settlement Agreement of 1998
Smoking tobacco was a leisure event in the states. From teens to bedridden retirees, everyone who wanted stress relief was encouraged to smoke. This was because of a lack of any scientific research into its adverse effects.
The four major United States tobacco companies would often capitalize on this need for America to smoke and make billions selling tobacco cigarettes.
However, by the 1970s, this changed. Many people started suing these companies under various lawsuits but ultimately lost. By the mid-1990s, things got worse for the industry. Various attorney generals had started legal proceedings against these major corporations.
By 1998, after reaching an agreement with various individual settlements with multiple states, the master settlement agreement was reached in these class-action lawsuits. The companies in question agreed to pay a minimum of $206 billion over the first 25 years of the agreement.
This is, to date, the single largest settlement ever agreed upon by anyone in the united states of America.
$206 billion is a huge amount, but that’s not the only high-end lawsuit the country has seen; the next one is just as crazy.
The BP Gulf Of Mexico Spill of 2010
A company called BP had a tragic accident under its watch on April 20, 2010, which caused a major oil spill in the Gulf of Mexico off the coast of New Orleans. The trials began shortly after the April 20 incident.
Initially, BP held that the oil spill was a tragic accident and was not a grossly negligent act. However, in a landmark judgment, Judge Carl J. Barbier found that BP had committed gross negligence. This was a significant judgment since a negligent ruling meant BP could not file for any income tax returns over any settlements paid regarding the oil spill.
The United States Department Of Justice pushed for the stiffest possible fines for the company, which was increased four-fold due to the negligence ruling. After much court fare and plenty of settlement meetings and court dates, on July 2, 2015, an $18.5 billion settlement was announced to be used for Clean Water Act penalties. By 2016, that number reached $20 billion to cover other claims as well.
The oil spill was a huge environmental disaster, and its effects are still recounted and felt. It led to major reform changes and stricter actions by the government to ensure this does not repeat in the future.
Volkswagen Diesel Emissions Scandal of 2015
The United States Environmental Protection Agency (EPA) issued a notice of violation of the Clean Air Act to the German car manufacturing company Volkswagen Group. It was found that Volkswagen had willingly programmed their diesel engines to activate their emissions controls only during laboratory emissions testing.
This facilitated the vehicles’ pollution output to meet the US standards during regulatory testing, while they emitted easily upwards of up to 40 times more on-street driving. it opened to door to several class-action lawsuits.
This software was deployed in about 11 million cars by Volkswagen. The company had a barrage of settlements to keep and had already recalled all its cars once the courts decided to step in. Counting the various settlements in various countries and recall costs and exchanges, the total settlements reached approximately $14.7 billion.
Enron Scandal and Class-Action Lawsuits
A seemingly innocent accounting scandal involving Enron Corporation was called the Enron scandal. The company hired a staff of executives for the express purpose of defrauding by using accounting loopholes, special purpose entities, and poor financial reporting. It successfully hid its billions of dollars in debt accumulated from various failed deals and projects over a long duration of time.
The company’s Chief Financial Officer, Andrew Fastow, and other executives quickly and on multiple opportunities misled Enron’s board of directors and also its audit committee on the high-risk accounting practices the company was secretly performing and pressured Arthur Andersen, the companies audit firm, to ignore the issues.
As the company blew up in the scandal, the holdings became insignificant. Eligible shareholders received $7.2 billion in settlements under a distribution plan approved in federal court. District Judge Melinda Harmon ruled that the law firm which ran Enron shareholder litigations for six years get a $688 million-plus interest for its work.
The Enron scandal was the first fraud of this magnitude ever committed and left a severe dent in financial marketing. Accounting firms’ liability was increased to make sure they are unbiased in the future.
Visa/ Mastercard Antitrust Class-Action Lawsuits
We all use Visa or MasterCard for our daily transactions. But they are also one of these largest lawsuit bearers in history. Both individually and together defrauded the merchants to pay higher fees to avail their services. This one, however, is still fresh. The settlement is not complete.
In December 2013, a settlement worth $7.25 billion was approved by a District Court Judge called John Gleeson. However, it was reversed, and one for $6.24 billion was made before the district court on November 7, 2019.
What prompted such large and trusted brands to stoop so low? We’ll never know, but the one thing we do know is that the fine of accountability is always paid.
Well, these are the magic numbers that brought major corporations to their knees and gave one point more to the commoner. There are various other similar class-action lawsuits in the US, but that’s all for now.