- 10 hours ago
From deceptive business practices to environmental disasters, corporate wrongdoing can lead to astronomical legal consequences. Join us as we reveal the companies that faced colossal lawsuits due to their questionable actions and decisions. These corporations learned the hard way that cutting corners can result in billions of dollars in settlements and irreparable damage to their reputations.
Category
🗞
NewsTranscript
00:00So let's be clear about this. Our company was dishonest with the EPA and the California Air Resources Board.
00:08Welcome to WatchMojo, and today we're counting down our picks for the companies whose products, actions, or decisions led to massive and well-known lawsuits.
00:15Roxanne is the latest plaintiff in the state's first class action suit.
00:20Number 10. Nokia vs. Apple
00:23In the late 2000s and early 2010s, a new global trend started where people replaced their Motorola Razr, BlackBerrys, or Nokia phones with technology's newest shiny spectacle, the iPhone.
00:33Endless Entertainment
00:34The first iPhone was released in 2007, and in 2023, Apple was the world's largest smartphone retailer.
00:40But those 16 years weren't all smooth sailing.
00:43In 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.
00:51Nokia says Apple has infringed several of its patents and has launched a number of lawsuits with the aim of proving it.
00:58Apple hit back calling these extortion tactics.
01:01This wasn't the first time the companies had crossed paths as they had been suing each other for patent infringement since 2009.
01:07The lawsuit was settled for an undisclosed amount estimated to be around $2 billion.
01:11The swift settlement surprised investors who'd expected the dispute to be ugly and lengthy.
01:16Number 9. GSK PLC
01:18It's probably not that surprising that a pharmaceutical company was caught engaging in greedy and deceptive business practices.
01:24Who wants to be a millionaire?
01:25In 2012, GSK PLC, then called GlaxoSmithKline, agreed to pay a whopping $3 billion in criminal and civil penalties to the U.S. government.
01:35This monumental payout was a result of an investigation that followed multiple whistleblower complaints against the company.
01:40Doctors for years were paid kickbacks to over-prescribe GlaxoSmithKline drugs.
01:46The crux of the investigation's findings was that GSK had falsely advertised two of its drugs, Paxil and Welbutrin, as being approved for use on minors.
01:55The company was also investigated for exaggerating the safety of its diabetes drug, Avandia.
02:00In 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.
02:08It was millions of dollars to go on speaking tours to a European pheasant hunt to tickets for Madonna concerts.
02:16Number 8. Dow Corning
02:18Dow Corning was founded in 1943 as a Dow Chemical Company joint venture, primarily to look into silicone products for the U.S. military.
02:25The company eventually diversified into thousands of other products, including sealants, adhesives, and breast implants.
02:31Beginning in 1977, lawsuits began to trickle in, alleging that Dow Corning's breast implants made their users sick, alleging the implants caused cancer before extending to other diseases like lupus and rheumatoid arthritis.
02:42Women are frightened.
02:44They were led to believe that Dow Corning was going to own up to their responsibility.
02:50The 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.
02:59We needed to use this action to allow us preventively, while our business is still healthy, to keep that healthy so that we can keep our operations going, but also so that we can meet our obligations to the global settlement and a fair resolution for everyone.
03:13Dow Corning eventually offered a settlement of $3.2 billion to plaintiffs and emerged from bankruptcy in 2004.
03:19We have a set sum of money that women will be able to rely on.
03:23Number 7. Wyeth Pharmaceuticals
03:24Tonight, the first Illinois class action lawsuit is filed over Fen-Fen.
03:29From Ozempic to Weight Watchers, bariatric surgery to good old-fashioned exercise.
03:34There have been numerous ways to lose weight over the years.
03:36Some work great, others not so much.
03:38Take Fen-Fen, for example.
03:40This two-for-one combo of fenfloramine and fentermine was brought to you by Wyeth Pharmaceuticals, Inc., then American Home Products Corporation.
03:47Fen-Fen was introduced in the early 90s and did well enough until reports emerged in 1997
03:51that fenfloramine potentially led to various heart problems.
03:55The FDA requested the drug be withdrawn and America's lawyers declared war.
03:59Attorneys say that within a few weeks, class action lawsuits will be filed in all 50 states.
04:04Over 50,000 lawsuits were filed against Wyeth, and the company at one point offered a $3.75 billion settlement,
04:11with the litigation estimated to have cost them around $14 billion.
04:14They should have at least warned the doctors to tell their patients that the side effects are real.
04:21Number six, Visa and MasterCard.
04:23Credit card use has now become so ubiquitous that many people don't even carry cash anymore,
04:28opting instead for the ease and convenience of the tap or swipe.
04:32But there's a cost to this convenience as retailers are forced to pay an interchange or swipe fee
04:36for the privilege of accepting credit cards.
04:38In 2005, a class action lawsuit was filed against Visa and MasterCard,
04:42alleging the two companies worked with banks to keep these interchange fees high.
04:46An initial 2012 settlement was rejected by a U.S. appeals court since it didn't favor many of the plaintiffs.
04:51Visa and MasterCard finally settled the lawsuit for $5.5 billion in 2019.
04:57Five years later, they settled another lawsuit on unlawful ATM transaction fees for $198 million.
05:04MasterCard says the agreement brings some closure to a long-standing dispute by delivering certainty to business owners.
05:11Number five, WorldCom.
05:13WorldCom was founded in 1983 and grew exponentially over the next 17 years
05:17by acquiring dozens of telecommunication companies.
05:20The company struggled significantly, however, in the wake of the dot-com bubble
05:24and their failed Sprint merger and was forced to take on significant debt to maintain its stock price.
05:29A 2002 internal company audit also uncovered that WorldCom had grossly manipulated its balance sheets,
05:34inflating revenue and downplaying expenses.
05:36This triggered an SEC investigation that eventually found WorldCom had inflated its assets by $11 billion.
05:42The company subsequently filed for Chapter 11 bankruptcy, the largest filing of its kind at the time.
05:48Its CEOs served 13 years in prison and the company and its financial partners paid over $6.1 billion in lawsuit settlements.
05:56Cooking the books to the tune of $11 billion, Bernie Ebers was convicted on nine felony counts.
06:01Number four, the Enron scandal.
06:03Congress wants to know what caused the Enron meltdown.
06:06Congress wants to know why employee retirement funds were wiped out while at the same time top executives were personally making millions.
06:13Throughout the 1990s, Enron had been the envy of Wall Street,
06:16became America's largest natural gas seller and was named America's most innovative company by Fortune magazine.
06:22It soon emerged, however, that this success was largely due to fraudulent business practices and misleading financial statements.
06:28Enron's credit rating dropped, its cash reserves were depleted, and its debt skyrocketed.
06:32Finally, with its stock practically worthless, Enron declared bankruptcy in late 2001.
06:37The scandal that followed was epic.
06:39It made household names out of previously obscure business executives.
06:43Its investors had lost $74 billion and its employees their savings.
06:47Shareholders filed multiple lawsuits, including a $40 billion lawsuit that led to a $7.2 billion settlement in 2008.
06:55Thousands of employees were also awarded over $100 million to partially recoup lost pensions and 401ks.
07:01I'm not saying that they didn't have any good ideas or do anything, but they tried to monetize things before they were really ready.
07:08Number 3. Volkswagen Emissions Scandal
07:10In 2013, West Virginia University researchers found unusually high emissions of nitrogen oxides, or NOx gases, coming from Volkswagen vehicles.
07:19This led the U.S. Environmental Protection Agency, EPA, to issue Volkswagen in order of violation of the Clean Air Act.
07:25If you're a VW shareholder or employee today, the letters stand for very worried.
07:31Volkswagen admitted to programming their diesel engine software to manipulate NOx emissions.
07:36The software was able to switch from a lower emission mode during testing to a higher emission mode when driving on the road.
07:42What VW has admitted is a massive technical fraud.
07:45The scandal affected 11 million cars globally, rocking the automobile industry and earning international attention with clever names like Dieselgate and Emissionsgate.
07:55In the U.S., Volkswagen faced steep criminal penalties of $2.8 billion and settled civil litigation for $14.7 billion.
08:03Volkswagen will also have to pay nearly $5 billion for environmental fines and towards emissions research.
08:10Number 2. BP and Deepwater Horizon
08:12Scientists are now reporting vast plumes of oil up to 10 miles long under the surface.
08:18On April 20, 2010, a mix of hydrocarbons, oil, and drilling mud were released onto the Deepwater Horizon drilling rig.
08:25The resulting fires and explosions killed 11 people, injured 17 others, and unleashed 5 million barrels of oil into the Gulf of Mexico,
08:32making it the world's largest accidental marine oil spill.
08:35But the total spill is so much worse than BP let on.
08:39Investigations identified multiple technical failures that helped cause this disaster.
08:43Over 130 lawsuits were filed against rig owner Transocean, drilling operator BP, cementer Halliburton, and others.
08:50A federal court found that most of the blame fell on BP, with a judge citing their gross negligence and willful misconduct.
08:57In 2015, BP agreed to a settlement of $18.7 billion and are estimated to have paid over $54 billion in environmental cleanup and economic damages.
09:07BP says it's put many millions into a healthcare program and has paid $14 billion in claims by individuals, businesses, and government,
09:15on top of $14 billion on response and cleanup.
09:19Before we unveil our top pick, here are a few honorable mentions.
09:22Petróleo Brasileiro, S.A. Petrobras.
09:25The Brazilian petroleum giant settled a U.S. corruption class action lawsuit for $3 billion.
09:31But in 2009, an investigation began to peel back the first layers of what turned out to be a colossal corruption scheme,
09:39with Petrobras at the center.
09:41Meta paid $725 million to settle lawsuits related to the Cambridge Analytica scandal.
09:46We would know what kinds of messaging you would be susceptible to and where you're going to consume that.
09:53And then how many times do we need to touch you with that in order to change how you think about something.
09:59Bank of America settled a lawsuit filed by shareholders over its acquisition of Merrill Lynch for $2.4 billion.
10:05This is really a bone of contention for Wall Street, it's a bone of contention for Albany, and even for D.C.
10:11Sendent. The travel and real estate firm was sued for over $3 billion for massively inflating its profits.
10:18McDonald's. The lawsuit over third-degree burns from hot McDonald's coffee received national attention.
10:23Stella Liebeck was a 79-year-old widow sitting in the passenger seat of a parked car when she was burned on February 27, 1992.
10:31Before we continue, be sure to subscribe to our channel and ring the bell to get notified about our latest videos.
10:38You have the option to be notified for occasional videos or all of them.
10:41If you're on your phone, make sure you go into your settings and switch on notifications.
10:47Number 1. The Tobacco Master Settlement Agreement
10:50When studies emerged linking smoking to lung cancer and other issues,
10:54hundreds of individuals sued the tobacco companies with little success.
10:57In the mid-1990s, states began suing tobacco companies for the increased cost smoking brought to public health systems, like Medicaid.
11:04Faced with the prospect of lawsuits from nearly the entire country, the tobacco companies sought a universal settlement.
11:09I think this will have an impact, probably a profound impact, on other states.
11:13In 1998, the four largest tobacco manufacturers,
11:17Philip Morris, Reynolds Tobacco, Brown & Williamson, and Lorillard Tobacco,
11:21signed the Tobacco Master Settlement Agreement with 46 states, Puerto Rico, Washington, D.C., and the Virgin Islands.
11:28The agreement restricted their youth marketing practices and included payments of $206 billion over 25 years,
11:34the largest corporate settlement in history.
11:37More than 45 tobacco companies eventually joined the agreement.
11:40The tobacco industry has surrendered, and they have surrendered on our terms.
11:46Which of these lawsuits shocked you the most?
11:48What other companies and lawsuits should have been on this list?
11:50Let us know in the comments below.
11:52I thought, oh, I hope he's counting digits on the verdict for him.
11:57And he was.
Recommended
12:26
|
Up next
11:20
14:34
17:22
11:04
11:35
14:06
13:18
11:34
13:11
17:43
11:35
32:49
9:48
10:05
12:10
Be the first to comment