So you think you've been wronged...

Receiving a Settlement from a Class Action Suit

by Debra Karplus


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You're chatting with your 60-year-old neighbor, Mike, about the perils of aging when he mentions that he's had three hip replacement surgeries. Mike doesn't look like a freakish guy with more than the usual two hips! Mike proceeds to tell you that he was part of a large class action suit of faulty hip replacement parts. Perhaps you heard in the news about a product you own that's been part of a class action suit or maybe you even received something in the mail. What should you do?

How do you find out if you could be a plaintiff in a class action suit?

Mike is one of several thousand people who received a financial settlement of $250,000 ($125,000 after legal fees) being a plaintiff in a class action suit against Johnson and Johnson DePuy's Acetabular (upper part of the hip bone) System. Marketed in 2005, the part was allegedly not properly tested for safety through clinical trials. Several patients who received the DePuy hip via hip replacement surgery began complaining. A recall was ultimately announced in August 2010, according to Drugwatch.com. The New York Times, NYTimes.com, stated that 12% of the patients who received this hip replacement needed additional surgery, as in the case of Mike. Mike admits that the settlement helped him financially, but given the choice, he clearly would've rather avoided the discomfort and aggravation of having had the "extra" hip surgery!

Possibly you purchased Airborne®, an over-the-counter product marketed as a cold remedy. People were encouraged to ingest this product if they experienced cold symptoms or were going to be in close proximity to others on an airplane, crowded shopping mall, or indoor stadium. A class action lawsuit followed, according to NPR.org in a March 8, 2008 report, that Airborne® was making false claims and was nothing more than a dietary supplement that's not regulated by the US Food and Drug Administration. Well-intended consumers who'd purchased the product gathered up receipts as proof-of-purchase and eventually received a full refund, as part of the $23.3 million lawsuit against the makers of Airborne®.

Search online "class action suits" and you'll find several websites listing the many small and large class action suits occurring every day on products that you may have innocently purchased because they were supposedly good for you and safe for your body, auto, or home. Websites like ForThePeople.com, Consumer-Action.org, and ClassAction.org are a few places where you can view databases of products you may currently own that are part of some litigation.

Maybe you purchased Tom's of Maine® toothpaste. Tom's of Maine markets this product as "natural," but a September 9, 2015 class action suit states that people who can prove purchase of this toothpaste and file a claim by May 7, 2016 will be reimbursed for the product.

Under investigation is Lumber Liquidators® laminate flooring, which allegedly contains dangerous levels of formaldehyde. If this is something that you've had installed in your home recently, you may want to keep current on the news for a potential class action suit that you could receive a benefit.

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What should you do if you win a large settlement from a class action suit?

So, maybe you had purchased about $100 of Airborne® products. That relatively small settlement likely will not change your financial situation in any notable way. Stick the money into your checking account and carry on with your life.

But if a check shows up in the mail for $125,000 from the DePuy hip system failure, as it did for Mike, put together a sensible strategy. Mike states that he deliberately avoided additional attorneys who suggested that they might be able to further help him but, in fact, were only "preying" on his winnings. He instead made an appointment with a financial planner in the wealth management department of his bank to help him develop a workable plan.

Mike says he was relieved to learn that his settlement from this class action suit was not considered to be taxable income, so Mike was able to allocate the money first to pay medical expenses and then to pay off all of his consumer debt. He gave some of the proceeds to his adult children and his grandchildren. And, as per the recommendation of the financial planner, he invested the remainder into three mutual funds.

Reviewed March 2017


Debra is an occupational therapist, accountant, teacher and freelance writer. She is a writer for Advance for Occupational Therapy Practitioners. She also writes for Grand Magazine, has some items (fiction and non fiction) selling on Amazon.com (kindle), has written several travel articles for the Champaign-Urbana News-Gazette and several articles for freelancewriting.com and volunteers as a money mentor for the university of illinois cooperative extension money mentoring program. Learn more about her at DebraKarplus.blogspot.com.

Take the Next Step:

  • If you think that you might be a party to a class action suit, take the time to research it now.
  • Make sure you're getting the best CD rate. Use our simple CD tool to find out. It's completely private, easy to use and you'll know what rate is available to you in seconds!
  • Learn how to make an effective consumer complaint.
  • Get control of your financial life. Subscribe to Financial Independence, a free daily email that provides you with the tools to help you gain that control and achieve financial independence. Subscribers get a copy of Are You Heading for Debt Trouble? A Simple Checklist for FREE!

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