Novartis HQ
Novartis HQ by Andrew Hecht (CC BY)

27 of the Biggest Lawsuit Settlements Against Companies

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Novartis HQ
Novartis HQ by Andrew Hecht (CC BY)

Big Business Fails

Corporations may enjoy many of the same rights as citizens do under American law, but they certainly aren't punished the same way for wrongdoing. Since an organization itself can't serve jail time, companies found guilty of wrongdoing in a court of law are usually let off with just a fine whether they're accused of overpromising rewards to consumers or much worse. This often pales in comparison to the amount gained through the offending behavior, such as in the case of America's opioid crisis, which is the focus of several settlements, or the recent $678 million settlement involving the drug company Novartis, which basically bribed doctors to use its products. The following are some of the most costly court settlements in American history.

Related: 27 Times Companies Tried to Trick Consumers

Don't Smoke
solidcolours/istockphoto

Tobacco Master Settlement Agreement

Amount: $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 persons with tobacco-related illnesses and anti-smoking campaigns.

Stop Smoking
mariusFM77/istockphoto

R.J. Reynolds Tobacco Co.

Amount: $23.6 billion
In addition to ongoing fines for the tobacco master settlement, the R.J. Reynolds Tobacco Co. — maker of Pall Mall and Camel cigarettes — was ordered to pay $23.6 billion in 2014 to the widow of a man who died in 1996 from lung cancer. The case, which produced one of the largest wrongful death verdicts for a single plaintiff in Florida's history, originated from the tobacco company's deceptive marketing practices.

Related: The Dirty Secrets 25 Popular Brands Don't Want You to Know

BP Oil Spill
landbysea/istockphoto

BP

Amount: $20 billion
In 2016, a federal judge in New Orleans made the final ruling for 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.

Know Your Neighborhood
jeremyiswild/istockphoto

Bank of America

Amount: $16 billion
Bank of America has been the subject of several major lawsuits owing to its involvement in the 2008 housing market crash. In 2014, it became the subject of the largest single federal settlement in the history of corporate America when it agreed to pay more than $16 billion to settle investigations into their sales of thousands of toxic mortgage securities like subprime loans.

Volkswagen
jetcityimage/istockphoto

Volkswagen

Amount: $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

Amount: $10.9 billion 
German pharmaceutical company Bayer has 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

Amount: $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, were ordered 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

Amount: $6.1 billion
In 2015, WorldCom Inc. investors were ordered 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

Amount: $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.

Wellbutrin
Wikimedia Commons

GlaxoSmithKline

Amount: $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

Amount: $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

Amount: $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 was ordered 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

Amount: $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 were forced 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

Amount: $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

Amount: $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: 24 Successful Businesses Launched During Economic Downturns

abdominal or bladder pain
hsyncoban/istockphoto

Takeda

Amount: $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

Amount: $2.3 billion
In 2009, pharmaceutical company Pfizer was found guilty of fraud for promoting "off-label" uses – those not pre-approved by the FDA – of their painkiller Bextra. They were ordered 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

Amount: $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.

farm cornfields
Kotenko_A/istockphoto

USDA

Amount: $2.3 billion
Likely the nation's largest civil rights settlement ever, Pigford v. Glickman was a 1999 class action lawsuit filed against the USDA, alleging widespread racial discrimination in the federal institution's allocation of billions of dollars in rural economies throughout the 20th century. In two settlements to date, the USDA has been ordered to pay a cumulative $2.5 billion to compensate thousands of black and minority farmers who lost their farms between 1983 and 1999 owing to these well-documented practices.

Johnson & Johnson
JHVEPhoto/istockphoto

Johnson & Johnson

Amount: $2.2 billion
In 2013, global healthcare giant Johnson & Johnson and its subsidiaries were ordered 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. In 2019, the company was also ordered to pay $572 million to the state of Oklahoma for the company's role in the opioid crisis. That amount was subsequently lowered to $465 million. The company announced that it would appeal the judgment.

Alzheimer's Disease
Xesai/istockphoto

Abbott Laboratories

Amount: $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

Amount: $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.

Both sides of a single 10mg OxyContin pill.
Both sides of a single 10mg OxyContin pill. by Psiĥedelisto (CC BY)

Purdue Pharma

Amount: $634.5 million
In 2007, Purdue Pharma pleaded guilty to misleading the public about the risk of abuse and duration of effects for OxyContin — the brand-name painkiller considered largely responsible for the opioid epidemic. Purdue was ordered to pay $634.5 million for ignoring and profiting from the drug's potential for abuse and encouraging doctors to overprescribe it for more than a decade. Purdue is still plagued by litigation concerning the epidemic, while its former chairman has patented a new drug to help cure opioid addiction. In September of 2019, it reached a tentative settlement to pay $3 billion, declare bankruptcy and divest of pharmaceutical holdings worldwide.

Related: 18 Prescription Drugs That Cost More Than a Car

black couple at the bank
fizkes/istockphoto

Countrywide Financial

Amount: $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

Amount: $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.

Nebraska, Controlled Substances
Charles Wollertz/istockphoto

AmerisourceBergen, Cardinal Health, McKesson and Teva Pharmaceutical

Amount: $260 million
In a last-minute settlement with two Ohio counties in October of 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.