Top 10 Companies That Triggered HUGE Lawsuits

Welcome to WatchMojo, and today were counting down our picks for the companies whose products, actions, or decisions led to massive and well-known lawsuits.

#10: Nokia vs. Apple

In the late 2000s and early 2010s, a new global trend started where people replaced their Motorola razors, Blackberries, or Nokia phones with technologys newest shiny spectacle: the iPhone. The first iPhone was released in 2007, and in 2023, Apple was the worlds largest smartphone retailer. But those 16 years werent all smooth sailing. In 2016, Apple found itself in a legal brawl when it was sued by Nokia for 32 patent violations, covering various parts of the phone and its systems. Apple hit back calling these extortion tactics. This wasnt the first time the companies had crossed paths as they had been suing each other for patent infringement since 2009. The lawsuit was settled for an undisclosed amount estimated to be around $2 billion.

#9: GSK plc.

It is probably not that surprising that a pharmaceutical company was caught engaging in greedy and deceptive business practices. In 2012, GSK plc (then called GlaxoSmithKline) agreed to pay a whopping $3 billion in criminal and civil penalties to the US government. This monumental payout was a result of an investigation that followed multiple whistleblower complaints against the company. The crux of the investigations findings was that GSK had falsely advertised two of its drugs, Paxil and Wellbutrin, as being approved for use on minors. The company was also investigated for exaggerating the safety of its diabetes drug Avandia. In a made-for-Hollywood plot twist, GSK had also bribed doctors with hunting trips, speaking engagements, and other luxury gifts to push their medications on patients.

#8: Dow Corning

Dow Corning was founded in 1943 as a Dow Chemical Company joint venture, primarily to look into silicone products for the U.S. military. The company eventually diversified into thousands of other products including sealants, adhesives, and breast implants. Beginning in 1977, lawsuits began to trickle in alleging that Dow Cornings breast implants made their users sick, alleging the implants caused cancer before extending to other diseases like lupus and rheumatoid arthritis. The trickle eventually became a flood, and by 1995 the company was facing around 20,000 lawsuits from hundreds of thousands of plaintiffs. forcing it to declare bankruptcy. Dow Corning eventually offered a settlement of $3.2 billion to plaintiffs and emerged from bankruptcy in 2004.

#7: Wyeth Pharmaceuticals

From Ozempic to Weight Watchers, bariatric surgery to good old-fashioned exercise, there have been numerous ways to lose weight over the years. Some work great, others not so much. Take Fen-Phen for example; this 2-for-1 combo of fenfluramine and phentermine was brought to you by Wyeth Pharmaceuticals Inc. (then American Home Products Corporation). Fen-Phen was introduced in the early 90s and did well enough until reports emerged in 1997 that Fenfluramine potentially led to various heart problems. The FDA requested the drug be withdrawn and Americas lawyers declared war. Over 50,000 lawsuits were filed against Wyeth and the company at one point offered a $3.75 billion settlement with the litigation estimated to have cost them around $14 billion.

#6: Visa & MasterCard

Credit card use has now become so ubiquitous that many people don't even carry cash anymore, opting instead for the ease and convenience of the tap or swipe. But theres a cost to this convenience as retailers are forced to pay an interchange or swipe fee for the privilege of accepting credit cards. In 2005, a class-action lawsuit was filed against Visa and Mastercard alleging the two companies worked with banks to keep these interchange fees high. An initial 2012 settlement was rejected by a US appeals court since it didnt favor many of the plaintiffs. Visa and Mastercard finally settled the lawsuit for $5.5 billion in 2019. 5 years later, they settled another lawsuit on unlawful ATM transaction fees for $198 million.

#5: WorldCom

WorldCom was founded in 1983 and grew exponentially over the next 17 years by acquiring dozens of telecommunication companies. The company struggled significantly however in the wake of the dot com bubble and their failed Sprint merger and was forced to take on significant debt to maintain its stock price. A 2002 internal company audit also uncovered that WorldCom had grossly manipulated its balance sheets, inflating revenue and downplaying expenses. This triggered an SEC investigation that eventually found WorldCom had inflated its assets by $11 billion. The company subsequently filed for Chapter 11 bankruptcy, the largest filing of its kind at the time. Its CEO served 13 years in prison and the company, and its financial partners paid over $6.1 billion in lawsuit settlements.

#4: The Enron Scandal

Throughout the 1990s, Enron had been the envy of Wall Street, became Americas largest natural gas seller and was named Americas Most Innovative Company by Fortune Magazine. It soon emerged however that this success was largely due to fraudulent business practices and misleading financial statements. Enrons credit rating dropped, its cash reserves were depleted, and its debt skyrocketed. Finally, with its stock practically worthless, Enron declared bankruptcy in late 2001. Its investors had lost $74 billion and its employees their savings. Shareholders filed multiple lawsuits, including a $ 40 billion lawsuit that led to a $7.2 billion settlement in 2008. Thousands of employees were also awarded over $100 million to partially recoup lost pensions and 401(k)s.

#3: Volkswagen Emissions Scandal

In 2013, West Virginia University researchers found unusually high emissions of nitrogen oxides or NOx gases coming from Volkswagen vehicles. This led the U.S. Environmental Protection Agency (EPA) to issue Volkswagen an order of violation of the Clean Air Act. Volkswagen admitted to programming their diesel engines software to manipulate NOx emissions. The software was able to switch from a lower emission mode during testing to a higher emission mode when driving on the road. The scandal affected 11 million cars globally, rocking the automobile industry and earning international attention with clever names like Dieselgate and Emissionsgate. In the U.S., Volkswagen faced steep criminal penalties of $2.8 billion and settled civil litigation for $14.7 billion.

#2: BP & Deepwater Horizon

On April 20, 2010, a mix of hydrocarbons, oil, and drilling mud were released onto the Deepwater Horizon drilling rig. The resulting fires and explosions killed 11 people, injured 17 others, and unleashed 5 million barrels of oil into the Gulf of Mexico, making it the worlds largest accidental marine oil spill. Investigations identified multiple technical failures that helped cause this disaster. Over 130 lawsuits were filed against rig owner Transocean, drilling operator BP, cementer Halliburton, and others. A federal court found that most of the blame fell on BP with a judge citing their gross negligence and willful misconduct. In 2015, BP agreed to a settlement of $18.7 billion, and are estimated to have paid over $54 billion in environmental clean-up and economic damages.

Before we unveil our top pick, here are a few honorable mentions.

Petróleo Brasileiro S.A. (Petrobras)

The Brazilian Petroleum Giant Settled a U.S. Corruption Class Action Lawsuit for $3 Billion

Meta

Paid $725 Million to Settle Lawsuits Related to the Cambridge Analytica Scandal

Bank of America

Settled a Lawsuit Filed by Shareholders Over Its Acquisition of Merrill Lynch for $2.4 Billion

Cendant

The Travel & Real Estate Firm Was Sued for Over $3 Billion for Massively Inflating Its Profits

McDonalds

The Lawsuit Over 3rd Degree Burns from Hot McDonalds Coffee Received National Attention

#1: The Tobacco Master Settlement Agreement

When studies emerged linking smoking to lung cancer and other issues, hundreds of individuals sued the tobacco companies with little success. In the mid 1990s, states began suing tobacco companies for the increased cost smoking brought to public health systems like Medicaid. Faced with the prospect of lawsuits from nearly the entire country, the tobacco companies sought a universal settlement. In 1998, the four largest tobacco manufacturers (Phillip Morris, Reynolds Tobacco, Brown & Williamson, and Lorillard Tobacco) signed the tobacco master settlement agreement with 46 states, Puerto Rico, Washington D.C. and the Virgin Islands. The agreement restricted their youth marketing practices and included payments of $206 billion over 25 years, the largest corporate settlement in history. More than 45 tobacco companies eventually joined the agreement.

Which of these lawsuits shocked you the most? What other companies and lawsuits should have been on this list? Let us know in the comments below