Duane Morris: 2022 Was a Banner Year for Class Action Settlements

Drugmakers and distributors that settled misconduct allegations related to the national opioid epidemic led to a banner year for class-action plaintiffs in 2022, with 15 settlement agreements that totaled $1 billion or more, according to a report by the Duane Morris law firm.

The number of billion-dollar settlements set a new annual record, surpassing even the extent of settlements from Big Tobacco litigation two decades ago, said Gerald L. Maatman Jr., a Duane Morris partner in Chicago and a general editor of its annual Class Action Review.

“The numbers today dwarf the numbers from back then,” Maatman said. “There’s this notion of social inflation. Juries today, post-pandemic, are very different from juries prior to the pandemic.”

Opioid litigants dominated the list of billion-dollar settlements in 2022. McKesson agreed to pay $7.4 billion to settle national litigation over prescription drug abuse. AmerisourceBergen, Cardinal Health, Walgreens, Purdue Pharma, Johnson & Johnson, CVS Pharmacy, Teva Pharmaceuticals, Walmart, Abbvie also settled class-action lawsuits for more than $1 billion each.

In aggregate, class-actions and government enforcement lawsuits against opioid manufacturers, retailers and distributors garnered more than $50 billion in settlements for the year. When the final tally is completed over the next several years, the total for opioid settlements may top $100 billion, the report says.

Plaintiffs’ attorneys set the table for even more billion-dollar settlements in coming years. The plaintiff’s bar succeeded in class certification motions 77% of the time in 2022, a success rate that requires corporate clients to endure, at the very least, an expensive discovery process.

Maatman said class-certification often entices defendants to settle cases to avoid the cost of further litigation. He said cases that are certified rarely go to trial.

“In class-actions, class certification is like the holy grail,” he said.

And because class-action lawsuits are big cases that promise big payouts, they tend to attract talented legal professionals who know how to make a case stick, Maatman said.

The report says privacy violations will likely continue to provide a rich target for class-action litigation this year. While the federal government hasn’t made any policy changes favorable to the plaintiff’s bar, several states have passed new laws that protect consumers from privacy intrusions. Illinois, for instance, passed the Biometric Privacy Act in 2008.

Class-action lawsuits alleging BIPA violations first made headlines in 2018. The report says the minefield is becoming more treacherous as other states consider “copycat” statutes. Biometric privacy lawsuits are not considered a top compliance priority for businesses nationwide.

The past year also saw a wave of wiretapping violation lawsuits that targeted companies that use technologies that track user activity on their websites, based on the theory that such practices violate electronic interception provisions of various state laws when done without consent.

While Congress has not enacted any new data privacy requirements, many states have adopted dither own rules. New privacy laws take effect in California, Colorado, Connecticut, Utah and Virginia this year\.

“Companies can expect an exponential increase in these types of class actions in 2023,” the report says.

The 456-page report can be ordered here.