TurboTax
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These Companies Had to Pay Massive Sums to Settle Lawsuits Against Them

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TurboTax
Kimberly White / Stringer / Getty Images Entertainment / Getty Images North America

Big Business Fails

Corporations may enjoy many of the same rights as citizens under American law, but they certainly aren't punished the same way for wrongdoing. Since an organization itself can't serve jail time, often the only recourse is seeking monetary damages. Here are some of the costliest big-business court settlements ever reached. The affected companies include TurboTax, which just agreed to pay out $141 million after being sued for misleading customers with ads for "free" tax filing services.


Related: Companies That Have Filed for Bankruptcy Since the Pandemic Began

Don't Smoke
solidcolours/istockphoto

Philip Morris, R.J. Reynolds, Brown & Williamson, and Lorillard

$206 billion
The largest civil litigation settlement in U.S. history occurred in 1998 between the attorneys general of 46 states, Washington, D.C., and five U.S. territories, and the nation's four largest tobacco companies. The companies agreed to significantly reduce their marketing and lobbying presences and begin making annual payments to states of $206 billion over 25 years, funding both medical care for people with tobacco-related illnesses and anti-smoking campaigns.

BP Oil Spill
landbysea/istockphoto

BP

$20 billion 

In 2016, a federal judge in New Orleans approved a settlement forcing oil company BP to pay $20 billion in reparations for an offshore oil spill in the Gulf of Mexico, approximately six years after the fact. The final amount covered Clean Water Act penalties and environmental damages from the initial explosion, which killed 11 workers and spilled 134 million gallons that spread across 43,000 miles.


Related: 29 Times Companies Tried to Trick Consumers

Know Your Neighborhood
jeremyiswild/istockphoto

Bank of America

$16.65 billion
Bank of America has been the subject of several major lawsuits owing to its involvement in the 2008 financial crash. At the time this settlement was announced, in 2014, it was the largest federal settlement with a single company in American history. Bank of America agreed to pay more than $16 billion to resolve investigations into sales of thousands of toxic mortgage securities.

Volkswagen
jetcityimage/istockphoto

Volkswagen

$14.7 billion
In 2016, a U.S. judge approved Volkswagen's $14.7 billion settlement with regulators and the owners of 475,000 VW vehicles, which used a secretly installed software to cheat diesel emissions tests. The maker of the beloved Beetle began buying back the affected cars, which emitted up to 40 times the legally allowed pollution levels, that November from owners, who also received up to $10,000 in additional compensation.

Monsanto RoundUp
NoDerog/istockphoto

Bayer

$10.9 billion
German pharmaceutical company Bayer agreed to pay nearly $11 billion to settle thousands of lawsuits over subsidiary Monsanto’s weed-killer Roundup. The settlement aims to clear nearly 100,000 lawsuits filed by people ranging from homeowners to farmers who say they developed cancer because of the product. Some 25,000 cases still remain. In three previous Roundup cases, awards totaling more than $2.3 billion have been ordered, but those cases are being appealed. 

Enron
James Nielsen/Stringer/Getty Images News/Getty Images North America

Enron

$7.2 billion
Enron was the world's largest energy trader until the end of 2001, when it came out that its remarkable financial success was the result of widespread accounting fraud. Almost seven years later, financial institutions accused of participating, like Bank of America, Citigroup, and J.P. Morgan Chase, had to pay a cumulative $7.2 billion to reimburse the company's investors and shareholders.

WorldCom building
Getty Images/Stringer/Getty Images News/Getty Images North America

WorldCom

$6.1 billion
In 2015, WorldCom Inc. investors had to pay roughly $6.1 billion to more than a dozen investment banks and 830,000 individual investors, owing to an $11 billion accounting fraud that resulted in the telecommunication company's dissolution three years earlier. Investment banks settled the case to avoid potential future liabilities, while the company's former chief executives Bernard Ebbers and Scott Sullivan received jail time for their crimes.

Prescription Drugs
amesy/istockphoto

American Home Products

$3.75 billion
More than 9,000 lawsuits were filed against pharmaceutical company American Home Products after its combined diet drug fen-phen was linked to potentially fatal heart valve damage in 1997. In 1999, the company agreed to pay $3.75 billion in compensation — up to $1.5 million per user — in a national settlement.


Related: 18 Prescription Drugs That Cost More Than a Car

Wellbutrin
Wikimedia Commons

GlaxoSmithKline

$3 billion
Pharmaceutical companies have been the subject of many massive settlements over unlawful drug promotions, but the largest to date was GlaxoSmithKline's $3 billion agreement in 2012. The total amount comprises $2 billion in civil charges under the False Claims Act and $1 billion in criminal charges related to their misbranding and lacking safety reports for their products Paxil, Wellbutrin, and Avandia.

Tyco Fire & Security headquarters in Boca Raton (also home to Sensormatic and SimplexGrinnell)
Tyco Fire & Security headquarters in Boca Raton (also home to Sensormatic and SimplexGrinnell) by Coolcaesar (CC BY-SA)

Tyco International

$2.92 billion
In 2002, two former CEOs of Irish security systems company Tyco International were jailed for embezzling more than $150 million and inflating income by $5.8 billion, eventually being declared guilty of more than 30 individual violations. Five years later, the company agreed to pay $2.92 billion to settle investor lawsuits for accounting fraud. Unlike Enron, Tyco continued to thrive following the scandal.

Mortgage Interest Credit
Mykola Komarovskyy/shutterstock

Cendant Mortgage

$2.83 billion
In 1998, just months after being created from a merger, consumer services provider Cendant uncovered massive accounting fraud leading to a large fall in stock prices and one of the decade's largest corporate scandals. The next year, Cendant agreed to pay a then-record $2.83 billion to shareholders as compensation, but bounced back with a series of acquisitions in the early 2000s before splitting into four separate companies.

Wisconsin, Internet Access (But Not For Much Longer!)
deepblue4you/istockphoto

AOL-Time Warner

$2.8 billion
Before, during, and after their merger in 2001, telecommunications companies Time Warner and America Online engaged in illegal accounting tricks to inflate advertising revenues and defraud 625,000 shareholders from 1998 to 2002. In 2007, the merged companies had to compensate shareholders and institutions that lost money to the tune of $2.8 billion, contributing to a $1.2 billion drop in net income from the previous year.

Caller ID Spoof
jaminwell/istockphoto

Nortel Networks

$2.5 billion
In 2006, multinational telecommunications company Nortel agreed to pay $2.473 billion back to two plaintiffs for accounting fraud, on the condition that the settlement contain no admission of wrongdoing by the company. The payout was split between cash payouts and reissued stocks, and almost certainly contributed to Nortel's bankruptcy and dissolution starting in 2009.

Doing Finances in an Office
Chalirmpoj Pimpisarn/istockphoto

Bank of America

$2.4 billion
Bank of America Corp. must be used to shelling out billions to settle class-action lawsuits by now. One settlement involving the company in 2012 stipulated they reimburse shareholders $2.43 billion for concealing crucial information during its purchase of Merrill Lynch & Co. at the height of the 2008 financial crisis. While competitors were moving on from the crisis, the nation's second-largest bank lost money in the third quarter of that year owing to the embattled acquisition.


Related: Successful Businesses Launched During Economic Downturns

abdominal or bladder pain
hsyncoban/istockphoto

Takeda

$2.4 billion
Like Nortel, Takeda Pharmaceuticals submitted to a multibillion-dollar settlement while still denying all liability for the issue at hand. In more than 9,000 claims, the Japanese company was accused of concealing the risk of bladder cancer associated with its big-selling diabetes drug Actos. In the 2015 settlement, Takeda agreed to pay $2.4 billion while arguing the benefits of Actos far outweighed the risks, justifying their decision to keep it in circulation.

Pfizer
tupungato/istockphoto

Pfizer

$2.3 billion
In 2009, pharmaceutical company Pfizer was found guilty of fraud for promoting "off-label" uses — those not preapproved by the Food and Drug Administration — of its painkiller Bextra. It agreed to pay $2.3 billion to settle civil and criminal allegations for illegal marketing, at the time making this both the largest health care fraud settlement and the largest criminal fine ever imposed.

silicone gel breast implants
Ivan-balvan/istockphoto

Dow Corning

$2.3 billion
Dow was the world's leading maker of silicone gel breast implants from 1964 to 1992, when a flurry of lawsuits contending they caused health problems forced their removal from the market. The lawsuits drove the company to declare bankruptcy in 1995, before it agreed to pay $2.3 billion to settle claims from 240,000 women between $2,000 and $250,000 per individual in 2004, while still contending there was no link between their products and the alleged ailments.

Johnson & Johnson
JHVEPhoto/istockphoto

Johnson & Johnson

$2.2 billion
In 2013, global health care giant Johnson & Johnson and its subsidiaries had to pay over $2.2 billion to settle criminal and civil liabilities, owing to allegations that they promoted prescription drugs for uses not preapproved by the FDA and paid kickbacks to physicians and pharmacy providers. This was another of the largest health care fraud settlements in U.S. history. 

Navient Corporation Indianapolis Location. After the split from Sallie Mae, Navient services and collects on student loans I
jetcityimage/istockphoto

Navient

$1.85 billion
Navient, one of the largest student loan servicing companies in America, will have to pay up after being sued for unfair practices. Attorneys claimed Navient enticed federal student loan borrowers into long-term forbearance instead of low-cost repayment plans, leading many borrowers deeper into debt as interest accrued. Around 350,000 federal student loan borrowers will receive about $260 each due to Navient’s practices, and Navient will have to fully cancel the remaining balances of private loans for about 66,000 students.

Alzheimer's Disease
Xesai/istockphoto

Abbott Laboratories

$1.5 billion
In a case of unlawful promotion of prescriptions for uses beyond those approved by the FDA, global health care company Abbott Laboratories pleaded guilty and agreed to pay $1.5 billion in 2012 for misbranding the drug Depakote as viable treatment for schizophrenia and aggression in elderly dementia patients.

Novartis HQ
Novartis HQ by Andrew Hecht (CC BY)

Novartis

$678 million
This month, the Justice Department announced that the drugmaker Novartis agreed to a massive settlement over charges that it basically bribed physicians to use its cardiovascular and diabetes drugs by paying hundreds of millions of dollars for bogus speaker programs where no meaningful presentations were made. High-prescribing doctors were paid tens or hundreds of thousands of dollars in honoraria and treated to lavish meals at high-end restaurants like Peter Luger Steak House in New York and Commander's Palace in New Orleans. The case represents the biggest whistleblower settlement under the federal anti-kickback law, according to whistleblower Oswald Bilotta's attorney.

black couple at the bank
fizkes/istockphoto

Countrywide Financial

$335 million
Before it became the mortgage unit of Bank of America, Countrywide Financial suffered the Justice Department's largest residential fair lending settlement in history in 2008, providing $335 million in compensation to over 200,000 African-American and Hispanic borrowers who were discriminated against from 2004 to 2008 by being charged higher fees and interest rates than their non-Hispanic, white counterparts.

U.S. Treasury check
wsmahar/istockphoto

Salomon Brothers

$290 million
In 1992, investment bank Salomon Brothers agreed to pay $290 million to settle charges that it had systematically submitted phony bids in treasury auctions that finance the national debt. This ruling was simultaneously a victory for the embattled firm, as the government in turn agreed not to bring criminal charges for the millions of dollars gained illegally through the scheme.

EpiPen Epinephrine Auto-Injector for Allergic Emergencies
smartstock/istockphoto

Vitaris

$264 million

Drugmaker Vitaris will pay big to settle a lawsuit over the EpiPen, a critical treatment for severe allergic reactions. The suit alleged that Vitaris, then known as Mylan, tried to delay lower-priced generic competitors of the EpiPen from reaching the market. Mylan dramatically raised EpiPen prices, from $100 in 2008 to $500 in 2016, stirring protests. Plaintiffs including both customers and insurers were asking $1 billion in damages at trial. 


Related: Medical Bill Horror Stories

Nebraska, Controlled Substances
Charles Wollertz/istockphoto

AmerisourceBergen, Cardinal Health, McKesson, and Teva Pharmaceutical

$260 million
In a last-minute settlement with two Ohio counties in 2019, drug distributors AmerisourceBergen, Cardinal Health and McKesson and drugmaker Teva Pharmaceutical agreed to pay $260 million for their role in the opioid crisis. The move came just before a nine-week federal trial was scheduled to start. The companies had sought a global settlement worth $48 billion that would have covered all opioid litigation against them.

Black woman working late in the office
FG Trade/istockphoto

Bank of America

Amount: $160 million
Bank of America took a hit owing to its 2008 acquisition of Merrill Lynch in 2013, when the latter agreed to pay $160 million to settle a class-action racial discrimination lawsuit brought by a longtime employee. Up to 1,200 former and current Lynch employees were eligible to receive compensation in one of the largest settlements ever to result from a race bias lawsuit, based on allegations that the company created a segregated workforce.

TurboTax
Kimberly White / Stringer / Getty Images Entertainment / Getty Images North America

TurboTax

$141 million

The latest company that's agreed to pay up is TurboTax, which is shelling out $141 million to settle a lawsuit accusing the company of misleading customers by promising free tax filing services. Nearly 4.4 million taxpayers will receive restitution, to the tune of about $30 for each year they were steered to a paid version of TurboTax even though they were eligible for a free version that was part of an IRS program for low-income filers.

Remington Arms Logo
Remington Arms Logo by Suzutuki (CC BY-SA)

Remington

$73 million

The families of five children and four adults killed in the Sandy Hook school massacre in 2012 have reached a $73 million settlement with Remington, the manufacturer of the gun used in the shooting, as well as Remington's insurers. Although the dollar amount isn't as big as others on this list, the implications are huge. While gun manufacturers have some protections against wrongful death lawsuits under federal law, this lawsuit focused on the company's marketing strategies, which were alleged to have played up the militaristic qualities of the rifle in violation of a Connecticut law against deceptive marketing. The families have also obtained — and, more important, can make public — thousands of pages of Remington's internal company documents in hopes of preventing future gun tragedies.