An Illinois federal judge has granted preliminary approval to a $295 million settlement between Stericycle Inc. and a nationwide class of customers allegedly hit with hidden and arbitrary price increases. The settlement agreement secures at least $900 for each settling class member and ensures the medical waste disposal company will start capping future price increases at 6 percent for existing customers and 8 percent for future customers within 60 days of the initial approval. The company also agreed to incorporate more transparent pricing and to submit to three years of compliance oversight by a retired federal judge. In granting the initial okay, U.S. District Judge Milton I. Shadur found the settlement provides ample opportunity for any objections and addresses every relevant consideration.

The multidistrict litigation (MDL) was consolidated and assigned to Judge Shadur in 2013. The case began when Lyndon Veterinary Clinic PLLC of New York initially filed suit against the waste company in 2013. The case’s allegations and defined class pertain to the company’s “small-quantity” customers, which accounted for more than half of the company’s revenue in early 2016. Each class-member customer signed a contract outlining a fixed fee for the collection and disposal of medical, pharmaceutical or hazardous waste. The Plaintiffs alleged the company freely increased rates sometimes as much as 18 percent in one year, violating contract terms that require increases be tied to operational changes or waste-law compliance. Judge Shadur certified the class in February over Stericycle’s objection that each customer’s contract contained significantly different terms, finding those differences to be either inconsequential or outliers that would otherwise disqualify the customer from class membership.

Excluded from the class are three other class-action suits Judge Shadur sent back to Tennessee, reversing an earlier MDL panel decision that initially consolidated them with the Illinois action. Those cases – one brought by a group of state dentists, the second by a group of physicians and the last a group of veterinarians – were all filed in July 2016 and claim nearly $9 million in total damages. Also excluded are Stericycle customers who settled a qui tam action for $28.5 million in 2016 that alleged the company illegally overcharged government entities.

The case is In re: Stericycle Inc. Steri-Safe Contract Litigation (case number 1:13-cv-05795 and MDL number 2455) in the U.S. District Court for the Northern District of Illinois.


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