Federal Judge Okays Class Action Over Stericycle Price Hike Scheme

LAKE FOREST, IL — A federal judge certified a nationwide class of Stericycle consumers in a federal class action lawsuit alleging the company misled its customers (including veterinary clinics, medical clinics and medical labs) through a scheme involving automatically increasing prices, according to law firm Hagens Berman.

“We’re incredibly pleased with this enormous victory for the thousands of small-business owners who were defrauded by Stericycle’s overpricing scheme,” said Steve Berman, managing partner of Hagens Berman and lead counsel representing the class of consumers.

In an order dated Thursday, Feb. 16, the court certified the class of more than 246,000 members with at least $600 million in estimated damages, according to the firm.

The entire class is seeking damages and relief stemming from the Lake Forest-based medical waste disposal company's pricing practices. The class is defined as any non-governmental Stericycle customers since 2003 indentified by the company as "Small Quantity" clients who were overcharged beyond the agreed price for the company's medical waste products and services because of its policy of automatic price increases, the order said.

“Stericycle tried every trick in the book to keep consumers from seeking justice, but the court agreed that there is ample evidence that Stericycle perpetrated the same fraud on the entire class by imposing huge automatic price increases over an extensive period,” Berman said in a release Friday.

The small companies who were in business with Stericycle allege the company defrauded them and broke its contracts by using billing software which had been programmed to raise rates by as much as 18 percent as often as every six months, according to the complaint.

Friday's class certification clears the way for the case to proceed on its merits.

Stericycle responded with an official statement Friday:

The order does not address the underlying merits of the allegations. The court acknowledges that the certification does not indicate that the contractual pricing at issue is inappropriate. Stericycle believes the allegations in this lawsuit are without merit and that we operated in accordance with the terms of our contracts. We will continue to vigorously contest these allegations as the litigation proceeds.

Last year, Stericycle was hit with another, separate class action lawsuit brought by two firefighter pension funds in Florida over the same practices.

In that case, rather than trying to recover damages through consumer protection laws, investors allege the company's fraudulent billing had been responsible for the stock dropping and their taking millions in losses in violation of SEC regulations.