$295M settlement reached on behalf of Stericycle customers

A $295 million settlement has been reached on behalf of a nationwide class of Stericycle customers, following a class-action lawsuit accusing the company of engaging in a price-increasing scheme that automatically inflated customers’ bills up to 18 percent biannually, according to a news release from Hagens Berman, the Chicago-based law firm that represented the class.

Under the settlement agreement, which brings relief to a class of dentists, medical clinics, veterinary clinics and other small businesses, Stericycle will also discontinue the pricing practices at the core of the lawsuit within 60 days of preliminary approval by the court. Stericycle’s compliance with the settlement terms will be monitored for three years by a retired federal district judge.

The court granted preliminary approval Oct. 26, pushing the settlement closer to final approval and implementation. The parties will now seek the court’s approval of the settlement agreement with a fairness hearing for final approval scheduled for Feb. 21, 2018.

The settlement agreement affects Stericycle customers that had flat-fee “Steri-Safe” or variable “transactional” medical waste disposal contracts with Stericycle and were subjected to the disputed price increases, which the lawsuit states were as much as 18 percent, twice per year, according to the news release. These small businesses affected by the price increases were identified by Stericycle as "small quantity" or "SQ" customers. When these SQ customers called to complain about the price increases, the lawsuit says, they were given false reasons for the price increases by Stericycle’s customer service representatives. According to the suit, those accounts made up 97 percent of Stericycle’s customers worldwide.

A 2013 investigation of Stericycle’s billing software found Steri-Safe customers’ price increases were programmed to occur regularly as often as every six months, which plaintiffs alleged was contrary to contract terms that Stericycle had agreed to.

Learn more about the class action suit.

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