Billions of Dollars Is High Price to Pay for Companies that Lose a Lawsuit

An enormous compensation sum of $23 billion, to be paid by a tobacco multinational, is only the last in a long series of lawsuits. Here are some of the most resounding cases.

Cynthia Robinson was seeking justice, but she probably wasn’t counting on getting so much money out of it. The decision by the jury of the Escambia County Court in Florida came as a great surprise. For the death of her husband, a hardened smoker whom she lost to cancer in 1996 at the age of 36, the U.S. multinational tobacco company R.J. Reynolds (whose brands include Camel, Winston and Pall Mall) will have to pay out some $23.6 billion to Ms. Robinson. Cynthia’s husband smoked three packs of cigarettes a day; according to the widow, R.J. Reynolds did not advertise clearly enough the health implications of such a strong tobacco addiction. The judge vindicated her reasoning. The hierarchies of the multinational company said that they were uneasy about the result. The company’s vice president, J. Jeffery Raborn, said that the jury’s verdict “goes far beyond the realm of reasonableness and fairness … ”

The total compensation figure secured by the jury certainly sets the record for a single lawsuit in a Florida courtroom, but not if we look at other similar decisions made in the American justice system over the years.

These are decisions (and compensation figures) that made history, as well as inspiring films and books. However, these cases were borne out of the original and somewhat strange initiatives of angry American citizens, as well as ultimately being attempts to win millions of dollars from any old company or public body. Here is a brief rundown of the most famous U.S. (legal) cases.

The agreement on the compensation to be paid by the tobacco industry in 1998 was a case that cost six American multinationals the huge sum of $206 billion, to be paid over the course of 25 years. It was a case that was brought by 46 states and was coordinated by the Department of Justice. What were they asking for? They sought compensation for the health expenses incurred by every single state, for the care of patients who were suffering from health problems related to their tobacco consumption, and the lack of publicity about its effects on the human body.

An understanding for a record compensation figure of $13 billion for subprime mortgages with the company JP Morgan secured the highest figure ever agreed to between the U.S. government and a private company. The decision in 2013 ended a long legal battle between the Obama administration and the investment bank. JP Morgan admitted to its responsibility in the handling of toxic loans, which subsequently caused the most serious economic crisis in the U.S. since the Great Depression. They were thus able to come to an agreement for compensation.

A class action for new breasts was won by female consumers who brought a case against the biggest silicon breast implant company in the United States because of the widespread problems reported by those who had had surgery. In particular, many women reported that they suffered from autoimmune conditions following implant surgery. The 1994 settlement was for a sum of $3.5 billion. At the time, it was the biggest class action case ever brought to trial in the U.S.

“Erin Brockovich” was a film in which the protagonist was played by Julia Roberts. The name refers to the story’s heroine, an environmental activist who defeated the Pacific Gas & Electric Company. The case was an important one. It was Brockovich who convinced the residents of Hinkley, California to take the company to trial, alleging that the drinking water was contaminated with hexavalent chromium. In the end, the legal battle was successful and PG&E had to pay the very high sum of $333 million in 1996.

These few examples of legal cases exemplify decisions that were successful for those who brought them to trial. We can take these cases seriously. But there are others that might be seen as somewhat more original: for example, the case brought by Anton Purisima against New York City. Having been bitten by a dog on a bus and photographed during the event, Purisima asked the New York City administration for more money than exists on the face of the earth — some $2,000,000,000,000,000,000,000,000,000,000,000. It was difficult to take him seriously.

Stella Liebeck, 79, brought a case against McDonald’s when she drank a cup of coffee that was too hot. The legal battle carried on for several months. Stella wanted a settlement figure of $2.7 million. In the end, a New Mexico judge secured a figure of around $500,000.

In 2006, Allen Heckard took Michael Jordan and Nike to court. He wanted a figure of around $800 million from the pair. Why? He maintained that he was a lookalike of the basketball legend, and that as a result he could not go out in public without being mistaken for being him. In reality, Allen was much shorter and he did not win the case.

In 2004, Marcy Meckler was attacked by a squirrel outside an American mall in Skokie, Illinois. Meckler brought a case against the mall, accusing it of failing to warn its customers about the presence of animals. She asked for $50,000. She didn’t get it.

On the other hand, in 2005, Michele Knepper won her case against a telephone directory company. She suffered complications after a liposuction procedure that had been carried out by a dermatologist whom she didn’t know, and whom she had found in the telephone listings. The doctor’s name was the first on the list among the other numbers available, a sort of hidden advertising. She won the case and took home some $1.2 million.