Lawsuits of 2020 that Ended in Costly Settlements

In this article, we decided to take a look at the top cases of 2020 that resulted in big bills for some of the biggest global companies.

As many of us will be glad to see the back of 2020, we have begun rounding up and looking back on everything the past year has taught us. From the legal sector embracing more tech to allow for remote working during lockdown, to the heightened cybersecurity risks that come with it, lawyers across the globe have been on an unexpected ride.

We have seen abortion rights being questioned, Trump’s financial records being under scrutiny and LGBTQ+ rights being a step closer to equality with LGBTQ+ employees being protected from discrimination in the workplace nationwide under federal civil rights laws. A lot of progression and, admittedly, digression in some cases, has occurred in 2020.

 

Apple’s Class Action

Starting our yearly round-up is a class action suit that was issued in 2017 against Apple, where they were accused of purposely slowing down older models of the iPhone by adjusting their operating systems, in order to encourage users to buy newer products.

After a lengthy litigation, Apple agreed to pay the compensation of $113m. Apple acknowledged its update reduced power demands after researchers found unusual slowdowns in 2017, but had denied wrongdoing was for financial gain and settled the nationwide case in order to avoid the burdens and costs of litigation, court papers show.

This is not the only case Apple has seen this year. They have also been ruled to pay VirnetX $502.8 million in royalties for VPN on Demand, a feature that lets iOS users access a VPN connection, Bloomberg reported. The jury ruled that Apple owes VirnetX for patent infringement in an ongoing legal battle that has spanned 10 years. The dispute started in 2010, when VirnetX accused Apple’s FaceTime feature of infringing on VirnetX patents[1].

 

Marriott’s Data Breach 

Being one of the top five GDPR fines so far[2], the ICO had fined Marriott International Inc £18.4million for failing to keep millions of customers’ personal data secure, after the company exposed itself to the cyber-attack following  the acquisition of the Starwood hotels group. The attack, which occurred in 2014 from an unknown source, remained undetected until September 2018, by which time Starwood had been acquired by Marriott. The breach resulted in the attacker having access to customer’s names, email addresses, phone numbers, unencrypted passport numbers, arrival/departure information, guests’ VIP status and loyalty programme membership numbers[3]. The ICO concluded that Marriott failed to undertake sufficient due diligence after the acquisition and should have implemented appropriate security measures. Marriott – which was originally facing a whopping £99million fine – commented that they deeply regret the incident. They chose not to appeal the decision.

 

Facebook’s expensive facial recognition 

At the start of the year, Facebook was ordered to pay $550 million to settle a class action lawsuit over privacy violations. The case had stemmed from Facebook’s photo-labelling service, Tag Suggestions, which uses face-matching software to suggest the names of people in users’ photos. The suit said that Facebook had violated an Illinois biometric privacy law by harvesting facial data for Tag Suggestions from the photos of millions of users in the state without their permission, without telling them how long the data would be kept[4]. Facebook stated that the allegations had no merit. Class members — Illinois Facebook users from mid-2011 to mid-2015 — were expecting an approximate $200 each[5].

This is not the only settlement Facebook has seen. In May, Facebook agreed to pay $52 million to current and former moderators to compensate them for mental health issues developed on the job, in a landmark case which acknowledged the toll that content moderation takes on its workforce[6].

 

Volkswagen emissions class action

Volkswagen had agreed to settle with claimants participating in a class action lawsuit brought by German consumer group VZBV over the carmaker’s rigging of diesel emissions tests. Volkswagen was expected to pay out a total of 620 million[7] (the exact per claimant depends on the age and model of their car). The company had set aside 830 million to cover the costs of settlements with all participants involved in the VZBV class action.

 

Purdue Pharma’s opioid settlement

America’s opioid crisis remains ongoing and earlier this year the maker of OxyContin painkillers reached an $8.3bn settlement, agreeing to plead guilty to criminal charges. As part of the deal, the company will admit that it misled the Drug Enforcement Agency (DEA) through falsifying its drug diversion programme by reporting misleading information to the agency in order to boost Purdue’s manufacturing quota. Purdue Pharma –  which does not have enough money to cover the settlement – will have to make an initial $225 million payment to the US Government, with the company ultimately required to pay a total sum of $2 billion. The company also will face a $3.54 billion criminal fine and a further $2.8 billion in damages to resolve its civil liability[8].

 

Robodebt’s big mistake

The Robodebt scheme, formally Online Compliance Intervention (OCI), was a method of automated debt recovery employed by Services Australia as part of its Centrelink payment compliance program, which involved an automated system matching data from multiple government services.

It was ruled illegal by the Federal Court due to it having little human oversight, with countless people handed big debts for money they did not actually owe. The program was suspended in February, and a class action suit from law firm Gordon Legal was launched to seek compensation for victims of unfair debts. The case settled for more than AUS $1.2 billion[9], resulting in Prime Minister Scott Morrison apologising for any hurt, harm or hardship caused by the scheme.

 

[1]  https://www.macrumors.com/2020/10/30/apple-virnetx-503-million-patent-infringement/

[2] https://dataprivacymanager.net/5-biggest-gdpr-fines-so-far-2020/

[3] https://www.lexology.com/library/detail.aspx?g=b7444202-6ee7-41e7-99ff-c67ab1a650cf

[4]  https://www.nytimes.com/2020/01/29/technology/facebook-privacy-lawsuit-earnings.html

[5] https://techcrunch.com/2020/01/29/facebook-will-pay-550-million-to-settle-class-action-lawsuit-over-privacy-violations/

[6] https://www.theverge.com/2020/5/12/21255870/facebook-content-moderator-settlement-scola-ptsd-mental-health

[7]  https://uk.reuters.com/article/idUKKBN2220U7

[8] http://www.pharmafile.com/news/562241/purdue-pharma-pleads-guilty-opioid-charges-8bn-settlement-us-department-justice

[9]  https://thenewdaily.com.au/news/2020/11/16/robodebt-class-action-settlement/

 

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