There have been numerous high profile class action lawsuits over the years, many involving securities fraud. But other famous class action lawsuits relate to pharmaceutical drugs, credit card abuses, and dangerous or unhealthy products.
Here, we present the top 10 class action lawsuits either won, settled or pending and in terms of damages sought as compiled by LawInfo.com. (Note: although corporations may be found legally and financially responsible for damages in these types of cases, they are almost always settled rather than taken to trial, and settlement agreements stipulate the defendant did not admit to any wrongdoing.)
Click ahead to see the top 10 US class-action lawsuits of all time.
By Constance Parten
Posted April 19, 2010
Status: Settled 2006
Amount: $2.4 billion
Two separate class-actions covered investors who held Nortel stock from Oct. 24, 2000 through Feb. 15, 2001, and from April 24, 2003 through April 27, 2004. The lawsuits were filed under federal securities laws for fraud.
Nortel was a leading supplier of fiber-optic equipment to emerging Internet companies. After the Internet bust caused the company’s sales to vanish, the company started creating false accounting entries showing steady equipment sales. When the fraud was uncovered, Nortel’s stock eventually fell to $0.47 from a high of $124.
Status: Settled 2005
Amount: $2.5 billion
Investors in AOL Time Warner stock sued the company for fraud under federal securities law. The company was alleged to have improperly accounted for dozens of advertising transactions between 1998 and 2002.
The alleged transactions created the appearance that they were generating revenue when, in reality, were just shifting money back and forth. The alleged false earnings statements inflated the company’s value by $1.7 billion.
Status: Settled 2000
Amount: $3.1 billion
A lawsuit representing all investors who held stock in Cendant from May 31, 1995 through Aug. 28, 1991, was filed against the company for securities fraud. In 1998, Cendant disclosed that for the prior 10 years the company had been fraudulently overstating its income by up to $500 million. Executives created false profit statements which caused an increase in the value of the company’s stock.
When the false profits were discovered, the value of the company collapsed. In addition to being sentenced to jail, former Vice Chairman Kirk Shelton was ordered to reimburse Cendant $3.27 billion at a monthly rate of $2,000.
Status: Settled 2007
Amount: $3.2 billion
A series of class-action lawsuits were filed against Tyco International Ltd., former officers and directors of Tyco, and PricewaterhouseCoopers, alleging that these individuals and entities made false and misleading public statements and omitted material information about Tyco's finances in violation of Sections 10(b), 14, 20A and 20(a) of the Securities Exchange Act of 1934.
Status: Settled 1994
Amount: $3.4 billion
After years of litigation claiming women suffered autoimmune disease from their silicone breast implants, the major breast implant manufacturers (Corning, Baxter, Bristol-Meyers Squibb/MEC, 3M) settled class action litigation for $3.4 billion. At the time, it was the largest class action lawsuit in history.
Status: Judgment 2001
Amount: $5 billion, later reduced to $500 million
This class action lawsuit related to the Exxon Valdez oil spill affecting thousands of people and more than 1,300 miles of coastline.
A federal judge ordered ExxonMobil to pay punitive damages and interest to thousands of commercial fishermen, cannery workers, land owners, Alaska natives and others who were harmed by the spill.
Status: Settled 2005
Amount: $6.2 billion
This class-action lawsuit represented investors who held World Com stock from April 29, 1999 through June 25, 2002. Lawsuits were initiated against World Com, and individual employees Bernard Ebbers (CEO), Scott Sullivan (CFO) David Myers (Controller) and Buford Yates (Accounting Director) for fraud.
The main charges of fraud stemmed from improperly classifying expenses as “capital costs” and inflating revenue statements with false entries. The Securities and Exchange Commission (SEC) later stated that the earnings and assets had been falsely stated by over $11 billion.
Status: Settled 2006
Amount: $7.2 billion
Investors in Enron corporate stock filed lawsuits under both federal and state securities laws against Enron Corporation, individual Enron officers and directors, Enron’s accountant Arthur Anderson, individual Arthur Anderson partners and employees, and Enron’s former law firm Vinson & Elkins.
The lawsuit’s primary contention was that Enron engaged in fraud by concealing from investors losses by Enron-controlled special purpose entities (the Raptors). Because Enron’s primary corporate losses were attributed to these entities, those losses were not disclosed in annual reports or SEC filings.
In total, the $7.2 billion in settlements reached by Enron to compensate shareholders whose stock became worthless during the company collapse is the largest payout to date in a shareholder securities class action.
Status: Pending (filed 2000)
Amount: Seeking $11 billion
A female employee is suing Wal-Mart Stores for sexual discrimination under Title VII of the Civil Rights Act of 1964 claiming that after several years of excellent work evaluations she was denied a promotion. The case was converted to class-action status to represent every female employee from 1998 onwards.
Status: Settled 1998
Amount: $206 billion over 25 years
Each individual state, represented by that state’s Attorney General, filed suit against each of the top six tobacco companies in state court. To settle the individual suits, tobacco companies Brown & Williamson Tobacco Corporation, Lorillard Tobacco Company, Philip Morris Incorporated, R.J. Reynolds Tobacco Company, Commonwealth Tobacco, and Liggett & Myers entered into a joint settlement.
The individual lawsuits were filed under the different states’ consumer protection and anti-trust laws for the recovery of smoking-related health care costs covered by each state under their Medicare/Medicaid programs, and to enforce laws designed to reduce smoking by those less than 18 years of age.
The master settlement agreement released the tobacco companies from further litigation in state courts.