Before getting straight into the main topic, we should know what a lawsuit is, “A lawsuit is a civil court of law process initiated by one or more parties against another”. Only a few statutes are still operating that use the old term “suit in law.” The term “lawsuit” refers to the civil action in which a plaintiff seeks a legal or equitable remedy from a court. Still, we can easily identify the biggest collection lawsuits to ever take place in NYC.
A Quick Background
A typical civil court docket in 1990 contained cases with two opposing sides, each with a counsel, most often involving business problems, including disputes over contracts, injuries, and other damages.
The attorneys made their points, and the judge, acting as a neutral arbiter, decided based on those legal and factual grounds.
Thirty years later, the same docket is dominated by instances in which a corporate represented by an attorney sues an individual, generally without the benefit of legal representation, for money due.
Debt claims, also known as consumer debt and debt collection lawsuits, are the most prevalent sort of such business-to-consumer cases. A typical debt claim case involves a business—often a firm that purchases delinquent debt from the original creditor—suing an individual to collect on a debt.
These claims are usually for less than $10,000 and commonly for less than $5,000 and typically involve unpaid medical bills, credit card balances, auto loans, college debt, and other kinds of consumer credits, other than housing, etc.
For more than ten years, the American Bar Association and legal advocacy organisations like the Court Services Corporation and the National Legal Aid and Defenders Association have raised concerns about troubling developments in the civil legal system. And judicial officials have taken note.
A nationwide organisation of state supreme court chiefs presented a report in 2016 urging that courts implement guidelines to promote a more fair and just civil legal system, particularly in debt collection matters.
Chief justices from numerous supreme courts have formed task groups to investigate the matter further, using funding from private foundations.
However, until recently, these talks were primarily limited to court officials, legal aid activists, and other parties worried about the legal profession’s future.
Most states’ policymakers have been excluded from discussions about how and why civil court systems are shifting; the extent to which the changes may cause financial harm to American consumers, particularly millions of people in the US who are trapped in long-term debt cycles; and potential solutions to these issues.
The Pew Charitable Trusts wanted to investigate what local, state, and national statistics on debt collection cases exist and what insights that data may give to assist state policymakers adapt to changing circumstances in civil courts.
This study was reinforced by reviewing debt claims research and conversations with consumer experts, creditors, lenders, attorneys, and court officials.
The primary conclusions are:
Fewer individuals use the courts for civil cases.
- In recent decades, debt claims have dominated state civil court dockets.
- Consumers pay a high price for default judgements.
- States gather and disclose very little information on their civil judicial systems, including debt cases and collection lawsuits.
- States are beginning to identify and make policies to resolve debt claim problems.
Based on the research and promising efforts in a few countries, we have identified three initial steps states can take to improve debt collection case handling:
- Track data on debt claims to understand better how these cases affect parties and at what phases of civil procedures courts can best assist litigants.
- Examine state regulations, court rules, and customary practices to establish methods that allow both parties to present their claims properly.
- Modernizing the relationship between courts and their customers by providing all parties with relevant and timely procedural information and moving more processes online in ways accessible to users with and without attorneys.
It’s not every day that corporations agree to pay $2 billion or more in restitution to victims of reckless business activity.
However, this is one of the largest class action settlements. Class action settlements of this scale are unprecedented. They are also of great public importance. Nonetheless, compiling a comprehensive list of these cases is difficult.
That is partly because class action settlement amounts are a shifting target until payments are issued, which occurs several months after the parties reach an agreement.
To complicate matters further, defendants may negotiate different settlements during the process. The court must evaluate and approve distribution plans, which the court of appeals can also review.
Here Are The 5 Biggest Collection Lawsuits In NYC History
1. $ 206 TOBACCO SETTLEMENTS BILLION
In 1998, four tobacco corporations agreed to a $206 billion settlement to pay medical expenses for smoking-related diseases at a minimum level. General attorneys from 46 states took part in this single settlement, which provided annual payments over two decades. Making this the biggest of all collection lawsuits in NYC history.
Due to the involvement of public lawyers, this is not a traditional class action, but the agreement resolved long-standing liability in class action litigation for the tobacco industry.
Many participating governments have been chastised for using settlement monies as collateral for bond financing, bringing money into public accounts sooner but decreasing the overall settlement value when bonds are repaid with interest.
2. $14.7 BILLION VOLKSWAGEN EMISSIONS SCANDAL
A federal judge in San Francisco accepted a $14.7 billion settlement in 2016 due to a Volkswagen plot to cheat pollution testing on their diesel automobiles.
That deal included monies for automobile buybacks at pre-scandal market values and extra cash compensation to 475,000 diesel car owners.
3. $6.1 BILLION WORLDCOM ACCOUNTING SCANDAL
A federal judge in New York reached settlements of around $6.1 billion in shareholder fraud action against WorldCom in 2005. New York State Comptroller Alan Hevesi launched the action on behalf of WorldCom shareholders and investors. The new york
pension funds were included. One of the bondholders initially agreed to pay $2 billion. Former WorldCom CEO and CFO were both sentenced to prison for their roles in the WorldCom accounting scam.
4. A $3.4 BILLION SILICON BREAST IMPLANTS
In the mid-1990s, manufacturers of silicone breast implants agreed to settle accusations that they had caused autoimmune and connective tissue diseases in women.
According to California Law Review, the manufacturer’s group, led by Dow Corning, first paid $4.75 billion, but the settlement crumbled because the number of claims surpassed expectations.
The remaining manufacturers, including Bristol-Myers Squibb, eventually agreed to a $3.4 billion settlement, while Dow Corning settled its claims in bankruptcy court.
5. $2.5 BILLION NORTEL ACCOUNTING FRAUD
Two federal courts in New York authorised a $2.45 billion settlement in 2006 regarding the alleged recording of fraudulent sales at Nortel Networks.
The transaction included a mix of cash and partnership in a new issue of company shares to a group of investors that was leaded by public pension funds in New Jersey and Ontario.
The Big Tobacco payment is the biggest payout in US history, out of all class-action lawsuits.
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