In re Stericycle, Inc. Securities Litigation

Court: U.S. District Court for the Northern District of Illinois
Case Number: 16-cv-07145
Judge: Hon. Andrea R. Wood
Class Period: 02/07/2013 - 02/21/2018
Case Contacts: John C. Browne, Adam H. Wierzbowski

This action asserts claims pursuant to Sections 11, 12(a)(2), and 15 of the Securities Act and Section 10(b) of the Securities Exchange Act on behalf of a class of persons and entities who: who purchased or otherwise acquired publicly-traded Stericycle common stock (“Stericycle Common Stock”) or publicly-traded Stericycle depositary shares (“Stericycle Depositary Shares”) (collectively, “Stericycle Securities”) in the open market during the period from February 7, 2013 through February 21, 2018, inclusive (the “Class Period”), including Stericycle Depositary Shares purchased in or traceable to the public offering of Stericycle Depositary Shares conducted on or around September 15, 2015 (the “Offering”), and were damaged thereby.  Defendants include:( i) the Company; (ii) certain of the Company’s current and former senior executives; (iii) the members of Stericycle’s board of directors; and (iv) the underwriters of the Offering.

Stericycle is an international waste management and disposal company, located in Lake County, Illinois, which specializes in collecting and disposing regulated waste, including medical, pharmaceutical and hazardous waste.  As of the first quarter of 2016, Stericycle derived 63% of its revenues from small quantity (“SQ”) customers and 37% of its revenue from large quantity (“LQ”) customers.  Plaintiffs allege that throughout the Class Period, Stericycle, its current and former senior executives, the members of its Board, and the underwriters of the Offering made a series of materially misleading statements and omissions regarding the amount of customer attrition due to illegal rate increases on SQ customers and the merit of claims concerning these rate increases in other litigations.  Stericycle also made materially misleading statements about the reasons for its growth, while knowing or recklessly disregarding that growth was attributable to the illegal rate increases.  As a result of the Company’s statements to investors, the price of Stericycle Securities was artificially inflated during the Class Period. 

On October 31, 2016, the Court appointed the Public Employees’ Retirement System of Mississippi and the Arkansas Teacher Retirement System as Lead Plaintiffs and appointed BLB&G as Lead Counsel.  The operative Amended Class Action Complaint for Violations of the Federal Securities Laws (the “Amended CAC” or “Complaint”) was filed on March 20, 2018.

Settlement

On February 14, 2019, Lead Plaintiffs and Defendants entered into the Stipulation and Agreement of Settlement setting forth the terms and condition of the proposed settlement of this action for $45 million in cash (the “Settlement”). 

Lead Plaintiff filed its motion for final approval of the settlement on June 17, 2019, and the final approval hearing is scheduled for July 22, 2019. On May 19, 2020, the Court granted Plaintiffs’ motion for an award of attorneys’ fees. In doing so, the Court overruled a serial objector’s objection to Plaintiffs’ request for attorneys’ fees.

On June 17, 2020, the objector appealed the District Court’s decision on attorneys’ fees to the U.S. Court of Appeals for the Seventh Circuit, and the objector filed his opening appeal brief on July 28, 2020. Plaintiffs filed their responsive brief on September 17, 2020, and the objector filed his reply on October 22, 2020.  The Seventh Circuit heard oral argument on the motion on December 8, 2020 and a decision is currently pending.

More information about the Settlement can be found at: www.stericyclesecuritieslitigation.com.

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