Corporate defendants saw unprecedented settlement numbers across all areas of class action litigation in 2022 and 2023, and so far, 2024 is on pace with the last two years. 

The cumulative value of the top 10 settlements across all substantive areas of class action litigation hit near record highs in 2023, second only to the settlement numbers observed in 2022.[1]

When the numbers for 2022 and 2023 are combined, the totals signal that corporate defendants have entered a new era of heightened risks and higher stakes in the valuation of class actions. On an aggregate basis, across all areas of litigation, class actions and government enforcement lawsuits garnered more than $51.4 billion in settlements in 2023, almost as high as the record-setting $66 billion in 2022. Combined, the two-year settlement total eclipses any other two-year period in the history of American jurisprudence.

Let's look at how the numbers compare so far this year.

As of the end of the first quarter, the aggregate settlement total across all areas of class action litigation and government enforcement lawsuits is $19.8 billion. It is anticipated that these numbers will increase across the board by the end of the year.

So far this year, there are three settlements over the billion-dollar mark. Last year, parties resolved 14 class actions for $1 billion or more in settlement, making 24 billion-dollar settlements in the last two years. Reminiscent of the Big Tobacco settlements nearly two decades ago, 2022 and 2023 marked the most extensive set of billion-dollar class action settlements and transfer of wealth in the history of the American court system.

The plaintiffs class action bar has scored rich settlements thus far in 2024 in virtually every area of class action litigation. The following list shows the totals of the top five settlements in 2024 so far in key areas:

• $14.24 billion — products liability/mass tort class actions
• $1.65 billion — antitrust class actions
• $1.21 billion — securities fraud class actions
• $558 million — consumer fraud class actions
• $388.95 million — data breach class actions

Here, we take a closer look at three of the top settlements in the first quarter of 2024 that are especially notable, two for their high dollar amounts, and one for the novel and relevant subject matter.

$10.5 Billion Settlement in Aqueous Film-Forming Foams Products Liability Litigation

In one of the largest multidistrict litigations over the last several years — In re: Aqueous Film-Forming Foams Products Liability Litigation — with over 7,000 actions included in the MDL, defendant 3M Co. will pay at least $10.5 billion and up to $12.5 billion in a settlement that was approved in late March by the U.S. District Court for the District of South Carolina.[2]

The settlement will resolve claims by utilities that 3M was liable for the damage they have and will incur due to the per- and polyfluoroalkyl substances that were used for decades in specialized fire suppressants, called aqueous film-forming foams, and sprayed directly into the environment, reaching drinking water.

3M's settlement will resolve claims from approximately 12,000 public water systems in the U.S. affected by PFAS contamination. Only a small portion of water systems opted out of the settlement, and all objections were dismissed by the court in granting final settlement approval.

While this settlement addresses some claims, 3M still faces personal injury lawsuits and state claims related to PFAS. 3M had ceased production of perfluorooctane sulfonate, known as PFOS, in 2000 and announced plans to discontinue all PFAS production by 2025.

Additional settlements in this litigation have been reached between the public water systems and other defendants, including DuPont De Nemours Inc. and Tyco Fire Products LP, which are not included in this settlement figure.

The aqueous film-forming foams deals will be similar in size and scope to the Big Tobacco and opioid settlements that we have seen previously. It reflects a larger trend involving a notable increase in class actions asserting environmental allegations, reflecting a heightened social and environmental consciousness.

The plaintiffs bar has developed a growing emphasis on environmental, social and governance initiatives, seeking to hold organizations accountable for their environmental impact. This increased emphasis has resulted in new causes of action.

Defendants can expect this shift to responsibility for environmental impact, with its huge settlement dollars, to continue in 2024 and beyond.

$350 Million Settlement in Alphabet Inc. Securities Litigation

In what has been deemed one of the largest privacy class action settlements to date and the fourth-largest securities settlement in California, the parent company of Google, Alphabet Inc., agreed to settle claims stemming from a 2018 Wall Street Journal report revealing a software flaw that exposed Google Plus user data.[3]

In In re: Alphabet Inc. Securities Litigation, shareholders alleged that Google failed to disclose the incident, citing insufficient breach reporting triggers, despite internal warnings of regulatory interest and reputational harm. When the data exposure became public, Google's stock price dropped by 5.9%.

The settlement amount received preliminary settlement approval in April in the U.S. District Court for the Northern District of California, and manifests the growing significance of privacy-related issues in corporate liability.

This settlement highlights the risks that companies face in the privacy and cybersecurity domains. At the same time, it stresses the importance of transparency in disclosing security vulnerabilities. While this litigation did not garner the largest of securities fraud settlements, it is inevitable that the privacy class action space will continue to grow through 2024.

Privacy class actions cover a wide range of possible liability theories, and the plaintiffs bar is using these different ways to bring claims and secure high-dollar settlements. The potential use of data breach allegations in connection with securities fraud liability — especially for inadequate disclosures of security breaches — is something defendants should be mindful of in the aftermath of any breach.

$1.25 Million Settlement in National Coalition on Black Civic Participation v. Wohl

Although not the most staggering in terms of dollars recovered, the settlement in National Coalition on Black Civic Participation v. Wohl is noteworthy nonetheless.[4]

In this class action before the U.S. District Court for the Southern District of New York, two conservative conspiracy theorists in April agreed to settle claims related to a robocall campaign that allegedly spread false information about mail-in voting to Black voters before the 2020 election. The settlement will split the funds between affected voters and the New York Attorney General's Office, with the latter distributing funds to affected New Yorkers.

The campaign aimed to dissuade Black voters from using mail-in ballots by making robocalls that falsely told them their personal information would be added to a public database and used by police departments to track outstanding warrants or for mandatory COVID-19 vaccinations. The call then warned that voters should not be "finessed into giving your private information to the man" and should "beware of vote by mail."

The conspiracy theorists previously pled guilty to fraud in connection with the scheme.

There have been several lawsuits filed against companies and individuals that were unlawfully seeking to invalidate the 2020 election results, but the National Coalition On Black Civic Participation settlement is novel in resolving claims of spreading false information to protected categories of voters.

Protect Democracy Project and the Electronic Privacy Information Center filed amicus briefs in support of the plaintiffs, and the U.S. Department of Labor filed a statement of interest in support of finding that Section 11(b) of the Voting Rights Act prohibits threats and attempted threats of nonphysical harm without any necessary showing of racial targeting.

As it becomes easier to reach mass quantities of voters using technology, defendants must be cognizant in crafting messages to avoid any targeted approach that could be seen as influencing voters by intimidation.

Conclusion

The high-dollar settlements of the past two years suggested that the plaintiffs bar would continue to be as aggressive, if not more, with their case filings and settlement positions.

Since class certification rates remained high in 2023, with over 74% of class certification motions being granted by courts, the plaintiffs bar has had advantageous positions from which to negotiate. These aggressive positions will continue as long as courts continue to grant certification in high numbers. From the data on settlements so far this year, it certainly looks to be the case.

 References

[1] Duane Morris Class Action Review – 2024, at 2-3(Duane Morris Class Action Review – 2024 -https://online.flippingbook.com/view/954167557/10/).

[2] In re: Aqueous Film-Forming Foams Products Liability Litigation , MDL 2873 (D.S.C. Mar. 29, 2024).

[3] In re: Alphabet Inc. Securities Litigation, Case No. 18-CV-6245 (N.D. Cal Apr. 9, 2024).

[4] National Coalition on Black Civic Participation v. Wohl , Case No. 20 Civ. 8668 (S.D.N.Y. Apr. 8, 2024).

Reprinted with permission of Law360.