The Largest Class-Action Legal Settlements In U.S. History

ACROSS AMERICA — Thousands of U.S. cities are on the cusp of receiving billions of dollars to address and fight the ongoing opioid epidemic, an amount representing one of the largest legal settlements in U.S. history.

In July, three U.S. drug distributors — AmerisourceBergen, Cardinal Health and McKesson — and drugmaker Johnson & Johnson agreed to pay a combined $26 billion to resolve thousands of state and local government lawsuits.

The opioid settlement is just one example in a long list of class-action lawsuits filed in U.S. courts.

A class-action lawsuit is a legal procedure that allows multiple people to come together and file a lawsuit against the same company or entity. Class-action cases are often meant to support those who may not have the means to pursue a claim independently.

Millions of people are likely to benefit from the forthcoming opioid settlement. At least 45 states have signed on or intend to sign on to the settlement, and at least 4,012 counties and cities will also receive compensation, according to a report by The Associated Press.

Have other class-action lawsuits ended in such massive settlements? While the opioid settlement is far from the first, it is significant. Here's a look at the top five largest class-action settlements in U.S. history:

1) Big Tobacco: $206 Billion (1998)

In 1998, 52 state and territory attorneys general and the country's four largest tobacco companies signed the Tobacco Master Settlement Agreement. The agreement, which remains the largest class-action settlement in U.S. history, required tobacco companies to pay out more than $206 billion to the included states over 25 years, plus another $9 billion per year in perpetuity.

In addition to resolving dozens of state lawsuits aimed at recovering billions of dollars in health care costs associated with treating smoking-related illnesses, the master settlement agreement seeks to reduce smoking in the United States, especially among youth.

Eventually, more than 45 tobacco companies settled with the states under the master settlement agreement, according to the National Association of Attorneys General.

Florida, Minnesota, Mississippi and Texas, which had their own tobacco settlements, were the only four states not to sign the agreement.

2) Opioid Epidemic: $26 Billion (2021)

In September 2021, AmerisourceBergen, Cardinal Health, McKesson, and Johnson & Johnson announced that enough states had agreed to a settlement of lawsuits over the opioid crisis for them to move ahead with the $26 billion deal. The payment is likely to represent the largest between drug companies and state and local governments over the addiction and overdose epidemic in the United States.

Prescription opioids such as OxyContin and Vicodin, and illicit ones such as heroin and fentanyl, are linked to more than 500,000 deaths in the United States since 2000, the AP reported.

In nearly all cases, state and city governments have agreed to put most of their shares toward drug treatment, education programs and other measures to fight the epidemic.

3) BP Gulf Of Mexico Oil Spill: $18.7 Billion (2015)

In 2015, BP and five Gulf Coast states ended years of litigation following a devastating oil spill in the Gulf of Mexico.

The lawsuit stemmed from a 2010 explosion on the Deepwater Horizon oil rig at the Macondo exploration well, according to NBC News. The blast killed 11 workers and released millions of barrels of crude oil into the Gulf of Mexico.

According to an outline filed in federal court, the settlement money was used to pay Clean Water Act penalties, resolve natural resources damage claims, settle economic claims and resolve economic damage claims of local governments.

Florida, Alabama, Mississippi, Louisiana and Texas were all involved in the settlement.

4) Volkswagen Emissions Scandal: $14.7 Billion (2016)

In 2015, the Environmental Protection Agency discovered that hundreds of thousands of Volkswagen cars sold in America had a "defeat device" in diesel engines that could detect when the engine was undergoing emissions testing. As a result, the software would modify the vehicle's performance to improve test results and ensure compliance, according to a report by Fortune. Under normal performance, however, the engines emitted far more pollution, including up to 40 times more nitrogen oxide, a significant contributor to asthma, bronchitis and emphysema.

The EPA sued the German automaker. In October 2016, U.S. District Court Judge Charles Breyer approved the final, $14.7 billion settlement, including a $10 billion buyback program, and payments and emissions fixes to owners who did not wish to sell their vehicles back to Volkswagen.

5) Enron Securities Fraud: $7.2 Billion (2008)

At the turn of the millennium, Houston-based energy company Enron became one of the nation's most sought-after companies, its overall stock worth skyrocketing ninefold in just one decade. However, when the dot-com bubble burst in 2000 and stock markets plunged, Enron's problems and lies were exposed.

In December 2001, Enron filed what was at the time the largest bankruptcy in U.S. history after it became apparent that its growth was based on accounting gimmicks that inflated the company's profits and made it more appealing to investors. Enron's 20,000 employees lost their jobs and $1.2 billion in retirement funds tied up in company stock, and its retirees saw $2 billion of their pension funds disappear, the Houston Chronicle reported.

Many Enron executives were indicted on various charges and sentenced to prison. Arthur Andersen LLP, Enron's accounting firm, also came under scrutiny and was indicted for obstruction of justice in 2002.

In 2008, a U.S. district court judge ruled that Enron shareholders whose holdings became worthless when the company collapsed would receive $7.2 billion in settlements. A bulk of the settlement was paid by JP Morgan Chase, Citigroup and the Canadian Imperial Bank of Commerce, all of which were accused of participating in Enron's fraud by helping executives disguise the company's debts.

In addition to the settlement, the Enron scandal resulted in a wave of new regulations and legislation designed to increase the accuracy of financial reporting for publicly traded companies.

The Associated Press contributed to this report.