2016/04/12 City Council Resolution 2016-31RESOLUTION NO. 2016-31
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROHNERT PARK
AUTHORIZING ACCEPTANCE OF SETTLEMENT AGREEMENT IN UNITED STATES
ET AL. EX REL. PEREZ V. STERICYCLE, INC. ET AL.
WHEREAS, the City of Rohnert Park contracted with Stericycle Inc., a medical waste
disposal company, between 2004 and 2008; and
WHEREAS, Stericycle's contract with its government customers involved long-term fixed
price contracts that did not permit price increases except to address increases in the company's
expenses; and
WHEREAS, Stericycle may have imposed price increases on its customers that bore no
relationship to the company's costs in the form of impermissible fuel and energy surcharges; and
WHEREAS, a whistleblower alleged these unlawful practices and a class action lawsuit
involving claims by local, state and federal government customers was filed by several state
Attorneys General under the False Claims Act (United States et al. ex rel. Perez v. Stericycle, Inc. et
al. (Civil Action No. 1:08-cv-2390, US District Court, Northern District of Illinois)); and
WHEREAS, Stericycle has agreed to pay a total settlement amount of $28.5 million to
resolve the overcharges that occurred between 2004 and 2008; and
WHEREAS, the California Attorney General has allocated the settlement proceeds among
Stericycle's governmental customers and calculated Rohnert Park's share as $6,214.26; and
WHEREAS, in exchange for these proceeds, the City is willing to consent to the provisions
of the settlement agreement and release its claims against Stericycle for the covered period.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Rohnert
Park hereby consents to the provisions of the settlement agreement, attached hereto as Exhibit A
and incorporated by this reference, and directs the City Manager to deposit the settlement check
within 60 days of its issuance.
DULY AND REGULARLY ADOPTED by the City Council of the City of Rohnert Park
this 12th day of April, 2016.
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Attachment: Exhibit A
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EXHIBIT A
SETTLEMENT AGREEMENT
United States et al. ex rel. Perez v. Stericycle, Inc. et al.
Exhibit A to Resolution
SETTLEMENT AGREEMENT
This Agreement of Settlement ("Agreement") is entered into by and between Plaintiff -
Relator Jennifer Perez ("Relator"), and defendant Stericycle, Inc. ("Stericycle"), through their
authorized representatives. Relator and Stericycle are collectively the "Parties."
REa ALS
WHEREAS:
A. Stericycle, based in Lake Forest, Illinois, is a provider of regulated medical waste
management services and pharmaceutical returns services to medical offices, hospitals, other
health care providers, and other entities. Stericycle does or has done business with government
customers at the federal, state, and local government level ("Government Customers")
B. Relator is an individual resident of the State of Illinois. On April 28, 2008,
Relator filed a qui tam action in the United States District Court for the Northern District of
Illinois captioned United Stales of'America ex rel. Jennifer D. Perez v, Stericycle, Ine., Case No.
1:08-cv-2390 (hereinafter referred to as the "Action")
C. On June 28, 2010, Relator filed an Amended Complaint adding the States of
California, Delaware, Florida, Illinois, Indiana, Nevada, New Hampshire, New Jersey, New
York, North Carolina, Rhode Island, Tennessee, the Commonwealths of Massachusetts and
Virginia, and the District of Columbia (except for New Hampshire and New York, "Government
Entities") as plaintiffs and alleging claims for relief under the respective state false claims law on
behalf of state and local governmental agencies, as applicable.
D. On July 23, 2013, Relator filed her Second Amended Complaint ("SAC") in
which she alleged claims on behalf of the Government Entities. The SAC dropped any claims on
behalf of the State of New Hampshire. "The SAC alleges Stericycle improperly increased its
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service price to certain government customers, from January 1, 2003 until June 30, 2014, without
consent of the Government Customers or contractual authorization, resulting in overpayment for
products and services ("Covered Conduct")
E. Stericycle denies all allegations of wrongdoing in connection with the Covered
Conduct, and this Agreement shall not be construed as an admission of any wrongdoing or
liability by Stericycle.
F. Neither the United States, any State, or the District of Columbia has intervened in
the Action.
G. Relator claims an entitlement to a share of the proceeds of this Agreement, the
terms of which are incorporated in a separate agreement between Relator and the Government
Entities, and to reasonable attorneys' fees, costs, and expenses under the federal False Claims
Act and its state analogues.
H. The Attorneys General for the States of California, Florida, New Jersey and
Rhode Island do not represent all governmental entities within their states under their respective
false claims acts, including local governmental or political subdivision customers within their
States, which were also allegedly affected by the Covered Conduct ("Affected Local
Governmental Customers"). The Attorneys General of California, Florida, New Jersey and
Rhode island will provide effective notice of the Settlement to each Affected Local
Governmental Customer pursuant to Paragraphs 8 and 9 of this Agreement,
NOW THEREFORE, to avoid the delay, uncertainty, inconvenience, and expense of
protracted litigation of the above claims, and the unique remedies and penalties exclusively
available under the federal False Claims Act and its state analogues, and in consideration of the
mutual promises and obligations of this Agreement, Relator and Stericycle agree as follows:
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Stericycle agrees to pay $26,750,000.00 ("Settlement Sum") plus $1,750,000.00
("Attorneys' Fees Settlement Sum"), for a total payment amount of $28,500,000.00 ("Total
Payment Sum''). Stericycle will pay the Settlement Sum to a third party as described below.
The allocation of the Settlement Sum between the Government Entities has been determined by
and among the Govermnent Entities without any involvement by or input whatsoever from
Stericycle or Stericycle's counsel. In addition, Stericycle alone agrees to pay the Attorneys' Fees
Settlement Sum in full and final satisfaction of any claims by Relator and Relator's Counsel for
reasonable expenses, attorneys' fees, and costs. The Total Payment Sum resolves any and all
claims that were alleged on behalf of the Government Entities by Relator in the Action and
Relator's claim for attorneys' fees, costs, and expenses under 31 U.S.C. § 3730(d) and analogous
provisions of state False Claims Acts.
2. No later than fourteen (14) days after the Effective Date of this Agreement,
Stericycle shall pay, pursuant to written instructions from Relator's counsel, the Settlement Sum
to the third party administrator, Garden City Group, LLP. No later than fourteen (14) days after
receiving payment of the Settlement Sum from Stericycle, Garden City Group, LLP shall
distribute the Settlement Sum to the Government Entities pursuant to written instructions
provided by the Government Entities. No later than fourteen (14) days after the Effective Date
of this Agreement, Stericycle shall pay the Attorneys' Fees Settlement Sum to and in the manner
directed by Relator's counsel.
Stericycle shall comply with all applicable state and/or federal laws, rules, and
regulations as now constituted or as may hereafter be amended,
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4. Relator affirms that this Agreement is fair, adequate, and reasonable under all the
circumstances in accordance with 31 U.S.C. § 3730(c)(2)(B) and similar state statutes, and
promises not to challenge the terms of this Agreement.
A stipulation of dismissal with prejudice will be filed, along with the
Government Entities consent to dismissal, if so required, fourteen (14) calendar days after
payment is received by all Government Entities pursuant to paragraph 2.
Other than payment of the Attorneys' Fees Settlement Sum, each party to this
Agreement shall bear its own attorneys' fees and costs.
7. Subject to the other provisions and limitations set out in this Agreement and
effective as of the receipt of the Total Payment Sum, Relator, on behalf of herself, and for her
heirs, successors, attorneys, agents, and assigns, hereby agrees to and shall release Stericycle,
and each of Stericycle's respective past and present affiliates, parents, subsidiaries, divisions,
branches, departments, predecessors, successors, assigns, and the heirs, principals, employees,
associates, owners, stockholders, devises, agents, distributors, directors, officers, representatives,
insurers, attorneys, and predecessors and successors in interest from any and all claims that she
may have against Stericycle in her own right or that she brought in the Action for the Covered
Conduct, including but not limited to claims under the federal False Claims Act, 31 U.S.C. §§
3729-3733 and/or its state analogues.
In connection with the foregoing, Relator acknowledges that she is familiar with and
hereby waives and relinquishes any and all rights and benefits she may have under the laws of
any state, similar to and including Section 1542 of the California Civil Code, which provides as
follows:
A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing
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the release, which if known by him must have materially affected
his settlement with the debtor.
8. Within ten (10) business days of the Effective Date, Stcricycle will provide the
Attorney General's Offices in California, Florida, and New Jersey with sufficient contact
information of presently -known government customers in the respective State to allow them to
provide effective notice to each Affected Local Governmental Customer ("Contact
Information"). Within 45 business days of the date by which the Attorney General's Offices in
California, Florida, and New Jersey receive the Contact Information, the Attorney General's
Offices in -California, Florida, and New Jersey will provide to each Affected Local Governmental
Customer its check along with a letter or other notification that contains the following language
in boldface text: "By accepting and depositing the enclosed check within 60 days of its
issuance, you are consenting to the provisions of the enclosed Settlement Agreement,
including the provisions in paragraph 7 of the Agreement. If you do not deposit the
enclosed check within 60 days of its issuance, you will forfeit ,your pro rata share of the
settlement proceeds." Rhode Island has received the Contact Information from Relator's
counsel and will provide to each Affected Local Governmental Customer its check along with a
letter or other notification that contains the language cited above. Contemporaneous copies of
the notification will be provided to Sterieycle. Any amounts that an Affected Local
Governmental Customer does not timely deposit under this paragraph shall be retained by the
State where that Affected Local Governmental Customer is located.
9. Each Affected Local Governmental Customer in California, Florida, New Jersey
and Rhode Island will have 60 days of the issuance of the check and letter or other notification
described in the above paragraph, to review the Notification, seek additional information, if
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needed, from the Attorney General's Offices in those states, and decide whether to consent to the
settlement consistent with the terms set forth in paragraph 8 herein. An Affected Local
Governmental Customer's failure to deposit the check within 60 days of its issuance will not
result in any increase in the pro rata share of the settlement funds to which any other Affected
Local Governmental Customer is entitled under the terms of this Agreement.
10. Subject to the other provisions and limitations set out in this Agreement and
effective as of the receipt of the "Total Payment Surn, Stericycle, for itself as well as for each of
Stericycle's respective past and present affiliates, parents, subsidiaries, divisions, branches,
departments, predecessors, successors, assigns, and the heirs, principals, employees, associates,
owners, stockholders, devises, agents, distributors, directors, officers, representatives, insurers,
attorneys, and predecessors and successor in interest, does and hereby agrees to and does release
Relator, her heirs, successors, attorneys, agents, and assigns from any claim (including attorneys'
fees, costs, and expenses of every kind and however denominated) that Stericycle has asserted,
or could have asserted, or may assert in the future against Relator and her heirs, successors,
attorneys, agents, and assigns, including without limitation, claims related to the Covered
Conduct and the investigation and prosecution thereof.
In connection with the foregoing, Stericycle acknowledges that it is familiar with and
hereby waives and relinquishes any and all rights and benefits it may have under the laws of any
state, similar to and including Section 1542 of the California Civil Code, which provides as
follows:
A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing
the release, which if known by him must have materially affected
his settlement with the debtor.
11. Relator and her counsel agree that all documents, data, or other information
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9—
provided or produced to Relator by Stericycle in connection with or related to the Action, will be
(1) returned to counsel for Stericycle; or
(2) destroyed and Relator will certify in writing that all such information was
destroyed;
within thirty (30) clays of the dismissal of the Action.
12, Documents provided or produced by Stericycle to the States of North Carolina and
Tennessee and the Commonwealths of Massachusetts and Virginia, will be treated as and kept
confidential to the extent provided by law.
13. Each party and signatory to this Agreement represents that it freely and voluntarily
enters into this Agreement without any degree of duress or compulsion.
14, 'This Agreement is governed by the laws of the State of Illinois. The exclusive
jurisdiction and venue for any dispute relating to this Agreement is the United States District
Court for the Northern District of Illinois.
15. This Agreement constitutes the complete agreement between the Parties. This
Agreement may not be amended except by written consent of each of the Parties.
16. The undersigned counsel represent and warrant that they are fully authorized to
execute this Agreement on behalf of the person and entities indicated below.
17. For purposes of construing this Agreement, this Agreement shall be deemed to
have been drafted by all Parties to this Agreement and shall not, therefore, be construed against
any Party for that reason in any subsequent dispute.
18. 'This Agreement may he executed in counterparts, each of which constitutes an
original and all of which constitute one and the same Agreement, Facsimiles of signatures shall
constitute acceptable, binding signatures for purposes of this Agreement.
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19. This Agreement is binding on Stericycle's successors, transferees, heirs, and
assigns.
20. This Agreement is binding on Relator's successors, transferees, heirs, and assigns.
21. The fatties agree that either Party may disclose this Agreement publicly, but all
other information related to this Action or this Agreement that has not been publicly filed or is
not a matter of public record is confidential and may not be disclosed by either of the Parties for
any reason, except as otherwise required by law or court order.
22. This Agreement is effective on the date the last party signs this Agreement
("Effective Date"),
IN WITNESS WHEREOF, the Parties have executed this Agreement.
DATED: &L&, 2015
DATED: [JC;7o.�/,$, 2015
JENNIFER D. PEREZ
J WNIFER D. RLRE
-7�
es T. Ratner
`ldmtttedpro hac vice)
P.O. Box 1035
Woodstock, NY 12498
Tel.: (845) 688-5222
Email: jamestratnei c,yaltoo.com
Page 8 of 10
Q
DATED: , 2015
MENZ BONNER KOMAR &
K ERG LLP
By: _.
David A. Koenigsuet
(Admifled pro hac Wee)
John R, Menz
444 Madison Avemie, 39'x' floor
New York, New York 10022
TO.: (212) 223-2100
Email: dkoenipberg@nbkklaw.com
DATED: , 2015
7
Michael C. Rosenblat
Michael C. Rosenblat, P,C.
707 Skokie Boulevard., Suite 600
Northbrook, Illinois 60062-2841
TO.: (847) 4,80-2390
Email: mikeL7a rosenblatlaw.com
Atlornos for Plaintiff Relater
Jennifer Pdrez
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STERICYCLE, INC.
DA'Z'ED: �r���' � 9 2015 BY:
NrE;
John Schetz
TITLE: EVP an General Counsel
DATED:'"., 2015 _
+(diaiiltiedprro
td J.-tellover
hac vice)
Cory D. Sinclair (Admitted pro hac vice)
PARSONS BEHLE & LATIMER
201 South Main Street, Suite 1800
Salt Lake City, UT 84111
Telephone: (801) 532-1234
E-mail: 12Etcheverry@parsonsbehle.com
cs inolair@parsonsb eh le. corn
and
Paul E. Chronis
Elinor L. Hart
Duane Morris LLP
190 S. LaSalle Street, Suite 3700
Chicago, Illinois 60603
Telephone: (312) 499-6700
Email: PEChronis@duanemorris.corn
EHart@duanemorris.com
Counsel for Defendant Stericycle, Inc.
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