Judge asked to OK final $295M deal to end Stericycle price hike class action; lawyers request $42M

By Scott Holland | Feb 15, 2018

A federal judge has been asked to grant final approval to a $295 million settlement deal ending a multi-state class action lawsuit accusing medical waste disposal company Stericycle of fixing prices for its “small quantity” customers under an automatic price increase policy.

The case had been, from its inception, overseen by U.S. District Judge Milton I. Shadur in Chicago; he died Jan. 14 at age 94.

According to a final settlement agreement filed Feb. 12, Shadur praised the agreement and especially the work of class attorneys Steve Berman, Garth D. Wojtanowicz and Elizabeth A. Fegan, of the firm of Hagens Berman Sobol Shapiro LLP, which stands to get $40 million in legal fees as well as $2.67 million in costs.

They represented named plaintiffs Lyndon Veterinary Clinic PLLC; ResearchDX LLC; Cochranton Veterinary Hospital; Amores Dental Care; McMackin & Simnoch P.C.; Madison Avenue Professional Building; and Greater Hampstead Family Medicine P.C.

Under the deal, Lake Forest-based Stericycle agreed to pay $295 million, which represents a recovery of about 32 percent of total class damages.

According to the plaintiff’s memorandum in support of the motion for final approval of the class settlement, submitted to U.S. District Judge Robert W. Gettleman, the terms also include relief changes that would “save class members approximately $160 million over the next three years, with a mechanism for monitoring Stericycle’s compliance to ensure the promised changes are carried out.”

The memo further noted there have only been two objections from more than 283,000 class members, “neither of which presents a legitimate concern much less a factual or legal basis for denying final approval.”

According to a Jan. 5 plaintiffs’ memo in support of the motion for legal fees, costs and incentive awards, the money going to Hagens Berman Sobol Shapiro represents only 8.79 percent of the total value of class relief and 13.56 percent of the cash portion of the settlement, “percentages far lower than awards commonly approved in similar class actions.”

Shadur certified the class in a ruling in February 2017, more than a year after the Hagens Berman firm requested class certification, which, in turn, came about three years after the firm filed suit in Chicago federal court in April 2013 against Stericycle on behalf of the Lyndon Veterinary Clinic in Fayetteville, N.Y. Other class actions were filed against Stericycle in Chicago, Southern California and Western Pennsylvania, leveling similar allegations and claims. A federal judicial panel then consolidated the cases into a single multi-district litigation and assigned the matter to Shadur in August 2013.

The complaints centered on annual price increases Stericycle handed to its smaller customers. The company collects and disposes of medical waste from jails, clinics, laboratories and other institutional and business clients. But according to the lawsuits, Stericycle violated “contracts by using an automated price increase to increase charges arbitrarily to ‘small-quantity’ customers without any notice or explanation,” while assessing “’undisclosed fees’ that were hidden increases buried in invoices.” Plaintiffs claimed Stericycle targeted its smaller customers to avoid wrangling over prices with larger institutional customers, with more resources to fight the price hikes.

According to the final settlement motion, the average class member will get more than $900, “with many receiving thousands or tens of thousands of dollars.” Stericycle also will cap annual price increases on current contracts to 6 percent, when in the past they’d been hiked as much as 18 percent twice a year.

Stericycle is represented in the action by attorneys with the firms of Duane Morris LLP, of Chicago, and Parsons Behle & Latimer, of Salt Lake City.

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Organizations in this Story

Duane Morris LLP Hagens Berman Sobol Shapiro, LLP Parsons Behle Latimer Stericycle Inc. U.S. District Court for the Northern District of Illinois

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