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Class Action History: The Big Tobacco Case

One of the biggest suits in class action history was a case that named four massive tobacco companies as defendants to cover smoking-related illness medical costs. This suit, which finished in 1998, resulted in one of the largest payouts in class action history. This case was part of a huge cultural shift away from cigarette smoking, leading to the current relative rarity of cigarette smokers.

Big Tobacco Class Action

Background

Since its discovery, tobacco has been a huge part of several human cultures. In the west, it’s long enjoyed a spot as the vice of choice of everyone from cattle workers to Wall Street bankers, and everyone in between. However, over the past twenty-five years or so, smoking tobacco has largely fallen out of vogue. After all, it poses a number of health risks, and it can be an expensive vice to keep up with.

However, the biggest shift in recent memory related to tobacco was the 1998 class action suit leveled against a group of four companies that represented “Big Tobacco” in the public eye. Two of the companies named as defendants, Philip Morris and RJ Reynolds, were some of the biggest tobacco companies in the world at the time.

The Suit

The suit in question wasn’t a traditional class action lawsuit, as it involved public prosecutors. However, the four companies involved in the litigation agreed to a $206 billion settlement to help cover medical costs for people suffering from tobacco smoking-related illnesses. Attorneys general from 46 states were involved in the settlement, making it one of the most prolific class action settlements of all time.

As a result of the settlement, the four companies resolved their outstanding liabilities in a class action suit that was leveled at the entire tobacco industry. This was seen by many as a huge blow to the industry, and a seismic shift in the way that tobacco would be sold and discussed in the public forum.

To this day, the $206 billion payout, which would be paid over the course of 25 years, remains one of the largest class action settlements of all time.