6 Expensive Business Lawsuits, Legal Disasters, and Product Recalls
July 7th, 2010
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The last few years have been tough going for the world’s biggest businesses. With revenues declining and workers seemingly disappearing, what were once the world’s most profitable companies have been reduced to mere shells – many of which required a government bailout in order to escape filing for bankruptcy.
But business recovery is occurring, albeit quite slowly in places. Employees are returning to work, orders are increasing, and consumer confidence is shooting up at record rates. All that’s missing for a return to yesterday’s business climate is a class action lawsuit or two.
We’ve scanned the web for the weirdest, most expensive, and most disastrous business lawsuits out there. From the RIAA’s evil actions against music fans to Walmart’s poor staffing choices and legal decisions, these six lawsuits represent a slightly different time for businesses – a time when customer were buying, and suing in equal numbers.
1. The $640,000 McDonald’s Coffee Lawsuit
In the absurd lawsuit hall-of-fame, there’s just one case that’s constantly mentioned: McDonald’s too-hot-coffee lawsuit. The giant restaurant chain was the target of a multi-million dollar lawsuit from New Mexico senior citizen Stella Leibeck. The Albuquerque resident purchased a cup of coffee from the McDonald’s drive-thru window, in the process accidentally spilling it over her pants.
After an eight-day hospital stay and two years of ongoing medical treatment, Stella’s lawsuit finally reached McDonald’s headquarters with a $640,000 settlement. While occasionally regarded as slightly trivial, this business lawsuit does have some serious logic behind it – McDonald’s coffee was considered too hot by the case’s jury, and Stella’s settlement was awarded to cover related medical expenses and lifestyle setbacks.
2. Walmart’s $9 Million False Arrest Lawsuit
When it comes to bad PR, it’s difficult to top American retailer Walmart’s spell as the most ‘evil’ corporation on the block. Despite being regarded by many economists as a force for good in the world, a growing number of American labor authorities and human rights activists contend that the multi-billion dollar company has treated its employees poorly.
However, Walmart’s most recent lawsuit was completely unrelated to employee treatment or compensation. The big-box retailer was sued by a would-be customer, who was unfortunately imprisoned after being wrongly accused of exchanging counterfeit Walmart vouchers. The Texas Southern University student was imprisoned for two days before eventually being freed and cleared of any wrongdoing.
Of course, Nitra Gipson didn’t stop her crusade against Walmart after being freed from temporary holding cells. The full-time student sued Walmart for $9 million in damages – one of the biggest retail settlements in decades. While the company plans to appeal the lawsuit, millions of dollars in damages have already been done, not just to Walmart’s bank accounts, but its public reputation.
3. The RIAA’s $108,000 Lawsuit Backfire
The Recording Industry Association of America (RIAA) certainly doesn’t boast the best public image. After failing to sue a deceased 83-year-old and preying on the families of young children, the recording industry collective decided to file suit against thousands of other file-sharing ‘criminals’ – each for six-figure sums.
One such victim, Tanya Anderson of Oregon, decided to fight back against the association’s patently evil tactics. Her legal team ended up winning their case against the RIAA, proving that Anderson’s hard drive lacked any substantial evidence of illegal file sharing. While Tanya’s countersuit failed to gain traction in the courts, her $108,000 payment from the RIAA certainly felt like welcome compensation.
4. PetSmart’s $1 Million Dog Poo Slip-Up
US-based pet supply and animal accessory store PetSmart never expected dog poo to cost them millions of dollars. An outlet in Virginia is the target of a recent lawsuit from Robert Holloway, who happened to slip on uncleaned and unseen dog ‘waste’ in the store’s outdoor section. As a result of slipping on the stray poop, Mr Holloway plans to sue the chain for $1 million.
While this may seem like the traditional American lawsuit, Mr Holloway may have reason to request so much from the chain store. After slipping on the stray dog feces, Mr Holloway fell and hurt his back, losing four false teeth and suffering a minor concussion. While we’d like to side with the store’s employees – it is a pet store, after all – leaving something both disgusting and potentially hazardous around isn’t a smart idea.
5. Horizon Realty’s $50,000 Twitter Outrage
Most companies engage in lawsuits with intentions of profiting from – or at least compensating for – potential losses. Chicago property firm Horizon Realty, however, achieved little more than a wave of bad publicity with their $50,000 lawsuit against Twitter user Amanda Bonnen. The suit alleged that Bonnen “maliciously and wrongfully” defamed Horizon Realty by publishing accounts of her moldy apartment on Twitter.
In response to the frivolous lawsuit, the social media world erupted in conversation. From negative reports of past dealings with Horizon Realty to plans of bringing the company down, feedback to the lawsuit was overwhelmingly negative. Horizon eventually dropped the case, but we believe the amount of feedback generated online cost the company much more than $50,000.
6. Microsoft’s $350 Million Antitrust Settlement
Microsoft certainly aren’t new to lawsuits. The multi-billion dollar technology company has been sued multiple times, both by private citizens and public groups. An antitrust lawsuit in the late 20th century cost the company millions of dollars and thousands of hours in wasted time, with several key employees and company executives forced into lengthy testimonies and long-term trial events.
However, it was Microsoft’s 2004 New York lawsuit that seems to have cost the company dearly. In response to antitrust claims from state government, Microsoft were forced to issue a $12 rebate for every customer in New York. The truly gigantic settlement is believed to have cost Microsoft approximately $350 million – a major financial setback for even the world’s richest software company.
Uno Chicago Grill pizza chain has won the court approval for it 
