Top Ten Class Actions
Class action suits generally involve large corporations who have caused harm to thousands of people. Common issues include discrimination, misuse of funds or harmful medications. Class action suits follow federal guidelines under the Rules of Civil Procedure.
Master Tobacco Settlement
The Tobacco Master Settlement was brought against the U.S. tobacco companies Phillip Morris, Brown and Williamson, Lorillard and R. J. Reynolds. Forty-six states sued the tobacco companies for reimbursement of their Medicaid expenses caused by tobacco related health issues. The states won, and the tobacco companies agreed to change their marketing practices and pay the states for their expenses.
Wal-Mart vs. Dukes
One woman, Betty Dukes, started this legal action against Wal-Mart. Dukes alleged that Wal-Mart discriminated against female employees when it came to promotions, pay raises, available training, job responsibilities and retaliation against female employees who brought up these issues. The U. S. Supreme Court ruled in favor of Wal-Mart saying that the plaintiffs did not constitute a class as each plaintiff's circumstances is different. With no group to form a class, there is no case.
Nortel Securities Litigation
Nortel was found guilty of misrepresenting its revenues and earnings during a certain time periods. This perpetrated fraud on investors. The investors believed that the stock was worth more than it actually was. Investors experienced significant losses when they later tried selling their shares. Nortel paid out over four billion dollars to investors that lost money.
AOL Time Warner
In 2002, AOL Time Warner was accused of violating the Securities Act of 1933 and the Securities Exchange Act of 1934. When AOL and Time Warner merged, the company was accused of knowingly issuing false and misleading statements and omitting material facts regarding the corporationís financial condition to the public and potential investors. This caused financial losses to investors.
The United States District Court of the Southern District of New York required the corporation to create a settlement account of over $2.5 billion in cash. Each investor that lost money due to the inflated stock prices can file a claim to recover their losses. Each claimant will be paid out of this settlement fund. The Court has detailed the terms of the settlement and who can qualify for reimbursement.
Starting in 1995, Cendant padded its financial statements creating $500 million in fake profits just to look good to investors and Wall Street. Once this accounting fraud was discovered, investors lost billions of dollars. The investors immediately filed a class action lawsuit. After several years in court, Cendant was ordered to pay investors almost $3 billion dollars.
In 2003, Tyco was accused of violating the Securities and Exchange Act of 1934 by providing false and misleading statements about its finances. This action caused shareholders to lose money. The courts ordered Tyco to place over $3.2 billion in a settlement fund. Those proving a claim would receive reimbursement from the fund. Since 2003, the fund has been distributed to all claimants.
Breast Implant Litigation
What began as a single lawsuit over ruptured implants in 1977 has grown to eight class action lawsuits against breast implant manufacturers. In 1994, the first class action suit was filed against Dow Corning, Bristol-Myers, Baxter, 3M and Squibb. By 1995, approximately 400,000 women had been reimbursed under the class action suit. Since then, seven additional class actions suits have been filed. The breast implant manufacturers have settled these cases with those affected.
The 1989 Exxon Mobil oil spill released up to 750,000 barrels of oil in Prince William Sound in Alaska. Thousands of birds, otters, seals and Orcas died in the oil spill. Approximately 1,300 miles of coastline suffered from the oil spill. In 2001, Exxon was ordered to pay $500 million in punitive damages to thousands of fisherman, cannery employees, land owners and Alaska natives.
The United States Court of the Southern District of New York approved the final settlement in the Worldcom, Inc. Securities Litigation case on December 14, 2012. Those who purchased publicly traded stock between 1999 and 2002 are eligible for any damages or injuries received during that time period. WorldCom sold $5 million in company bonds when it knew its books were fraudulent.
Enron was granted government deregulation that allowed it to publish financial statements without showing losses which made the company look profitable. Executives embezzled stockholder funds. The fake financial statements continued to attract additional investors bringing additional money into the corporation. While corporate executives were enjoying the investors' money, the company was going bankrupt. When the company did go bankrupt, investors lost almost $70 billion. Since the company is deregulated and has limited liability status, investors have only recovered a small amount of their losses.