There’s reason to fear Meta’s historic $18B settlement will mostly help . . . the lawyers

In the wake of this week’s $18 billion Meta settlement, it’s worth noting that attorneys in class-action lawsuits always claim they’re seeking huge payouts to win justice for victims — yet some ugly news from New Jersey again shows how little the real victims ever see.
Some 25 Garden State towns blew at least $2.3 million from the 2021 nationwide opioid settlement on naked self-dealing and utter nonsense.
So a crusade in the name of mitigating the harm done to individuals and communities really adds up to little more than a shakedown to benefit the lawyers who sued and local officials who got to spend freely.
Look at the shopping list:

$73,000 on a custom Mustang for Atlantic City’s police department.

Nearly $150,000 handed over in Camden to a nonprofit for . . . identifying broken streetlights.

$600,000 on “opioid awareness concerts” in Irvington.

Some $53 million is reportedly simply sitting in municipal accounts as towns like Summit just hold the cash.

The settlement language ordered the funds go to fight addiction and fund prevention — so heads should be rolling.

But insiders are all too used to how settlement cash ends up in the pockets of everyone but the victims of negligence or malice such litigation always pretends it will help.
The plaintiffs of record — of whom there can be millions in any given class — routinely receive pittances, while the fat-cat lawyers who “represent” the class get even richer.
In the opioid settlement, lawyers’ fees hit $2.3 billion; one firm, Motley Rice, took home $396 million — and appealed the award because it wasn’t big enough.
Legal fees climbed above $10 billion in the 1998 tobacco Master Settlement, with even more going to state-level slush funds.
Another dodge is to shower a good chunk of the payout on “charities” allied to political powers-that-be.
Google settled a 2010 class action with literally zero going to the vast bulk of the plaintiffs; a few got token awards and the lawyers took their hefty cut, then the rest went to nonprofits picked . . . mysteriously.
The corruption can start at the top: In 2018, the Obama administration gave nonprofits close to $400 million as part of a settlement over alleged Department of Agriculture racism against Native Americans.

I was working on a draft on this topic earlier this week, but the Post’s article will (mostly ) do. Here’s a bit of my own take, compiled with help from ChatGTP which pulled up some of the specific data. The AI points out an important distinction: While private class action suits: “Consumers didn’t know that Fruit Loops weren’t made from fruit”, for instance, or “Cheeze-Wiz isn’t 100% cheese” are brought by lawyers for lawyers, with that group of sharks pocketing the proceeds while the class members receive 49¢ coupons for their next purchase, these government suits aren’t brought in the name of individual “victims”, but on behalf of state coffers.

Your memory is substantially right about the tobacco settlement, but I’d put an important qualification on the broader conclusion. There are really three different phenomena that tend to get lumped together: state-AG settlements, private class actions, and mass-tort/MDL settlements. They distribute money very differently.

The tobacco settlement is an unusually strong example of the thing you remember. The 1998 Master Settlement Agreement wasn’t principally compensation for smokers. The states sued to recover public costs associated with smoking, particularly Medicaid and other health expenditures*, and the settlement deliberately gave the states enormous discretion over the money. The agreement itself imposed no restriction on what states could spend it on.

The subsequent numbers are fairly remarkable. GAO examined state allocations during FY2000–05 and found:

Use Share

Health care generally 30.0%

Budget shortfalls 22.9%

Unallocated 11.9%

General purposes 7.1%

Infrastructure 6.0%

Education 5.5%

Debt service 5.4%

Tobacco prevention/control 3.5%

Everything else ~8%

So only 3½ cents of every settlement dollar went specifically to smoking prevention, cessation, counter-advertising, etc. Nearly 23% went straight to plugging budget holes. Other money went to infrastructure, education, general funds, economic development, debt service, and even payments to tobacco growers.

That makes your recollection of the tobacco settlement pretty accurate. Calling all of those expenditures "slush funds" is rhetorically loaded—Medicaid, schools and infrastructure aren't inherently frivolous—but the important substantive point is correct: most of the money was neither paid to injured smokers nor devoted to smoking cessation/prevention.

But there's an important reason for that

The tobacco litigation wasn't actually a giant class action on behalf of smokers. It was primarily states asserting their own claims, especially for public health-care costs. Consequently, an individual smoker wasn't legally the plaintiff whose damages were being recovered.

[•*Fun fact: the court trying the case to refused to admit evidence of how many billions states had collected in tobacco taxes, because that number dwarfed their claimed damages.]

That distinction explains something that otherwise looks rather outrageous: How can you settle hundreds of billions of dollars' worth of claims over injuries caused by cigarettes without giving the injured smokers the money?

Because, legally, that wasn't really the claim being settled.

This is quite different from a conventional Rule 23 consumer class action—for example, "Company illegally charged 12 million customers $20 each." In that case the settlement fund ordinarily belongs principally to the class, subject to fees, administration expenses, and court approval.

There are legitimate criticisms of private class actions, especially settlements where individual class members get $3.72 coupons while class counsel receives millions. But that is a somewhat different pathology from what happened with tobacco.

And your point about the lawyers is partly right, too

The fees in these enormous public-interest/mass-tort cases can be staggering in absolute dollars. But they aren't usually "most" of the recovery.

The opioid settlements are illustrative. One major $26 billion settlement structure reserved about $2.3 billion—roughly 8.8%—for attorneys' fees, leaving roughly $23.5 billion for the governmental plaintiffs and opioid-abatement purposes. Courts also imposed limits intended to prevent lawyers from taking a second large contingency fee out of local governments' recoveries.

Eight or nine percent of $26 billion is an eye-popping amount of money, of course. But it isn't remotely a majority.

The more serious criticism is often where the other 90%-plus goes.

Opioids show both the problem—and an attempt to fix tobacco's mistake

The people designing the opioid settlements knew perfectly well what happened with tobacco. Consequently, most of the big opioid agreements require at least 85% of the proceeds to be used for "opioid remediation."

That's a significant improvement.

But "remediation" can be broadly defined, and implementation is messy. KFF Health News assembled a database of state and local spending and found more than $240 million reported for things that weren't opioid remediation; much of that was legal expenses, but some went into general funds and one county even allocated money to its road-and-bridge department. There are also transparency problems: for roughly a third of the money received in the first two years they studied, governments hadn't provided sufficiently useful public reports to track it.

And again, very little goes directly to victims or their families. A 2025 investigation reported that less than 2% of roughly $57 billion in expected opioid settlement funds had gone to affected families. Most is instead being used for treatment, naloxone, prevention, recovery housing, etc.

That isn't necessarily misappropriation. There is a defensible public-policy argument that preventing the next 10,000 overdose deaths is a better use of $500 million than dividing it among families of people who have already died.

But it does mean that someone hearing "$50 billion settlement over the opioid epidemic" could reasonably come away with a badly mistaken impression about who is actually receiving the $50 billion.

Which brings us to Meta

The comparison you're making is especially interesting because the new Meta agreement appears to have been consciously structured with these precedents in mind.

The just-announced agreement is up to $17.1 billion, involving 47 states plus D.C. and several territories, and is expressly described as the largest state consumer-protection settlement other than Big Tobacco. It also imposes substantial prospective restrictions on Meta's treatment of minors.

But here's the detail that jumps out in light of your question:

The settlement requires at least 50% of state payments to be used for compensatory restitution and remediation.

That sounds much better than tobacco—until you read the state-specific provisions. They illustrate exactly the concern you're raising.

For example, California's allocation includes money for children's mental-health/social-media remediation, but also:

$20 million annually for several years for the AG's consumer-protection enforcement fund;
$9 million annually for another public-law-enforcement fund;
$1 million annually for a privacy/piracy fund;
$10 million deposited directly into California's General Fund.

Colorado gets even broader discretion: its AG may use its share for costs and fees, restitution, future consumer-fraud or antitrust enforcement, consumer education or "public welfare purposes." Connecticut can put money into its General Fund or other funds for lawful purposes, although it remains subject to the settlement's 50% restitution/remediation floor.

But wait, there’s more! Suits against oil companies and gun manufacturers are just getting going. The former are mostly about revenue generation, the latter are intended to bankrupt the industry.

There's also a deeper conceptual issue here. State AG litigation increasingly functions partly as regulation by lawsuit. The government obtains money plus behavioral restrictions that a legislature or regulator might otherwise have imposed. Once you see these cases that way, it's less surprising that the proceeds look like public revenues rather than damages awards.