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6.1.H. - Page 1 <br /> REPORT <br /> To the Honorable Mayor and City Council <br /> From the City Manager <br /> April 25, 2016 <br /> SUBJECT <br /> Acceptance of the provisions of the settlement agreement in United States et al. ex rel. <br /> Perez v. Stericycle, Inc. et al. which would authorize the deposit of settlement proceeds <br /> RECOMMENDATION <br /> By motion, accept the provisions of the settlement agreement in United States et al. ex <br /> rel. Perez v. Stericycle, Inc. et al. and authorize the City Manager to deposit $2,693.72 in <br /> settlement proceeds <br /> BACKGROUND <br /> United States et al. ex rel. Perez v. Stericycle, Inc. et al. involves claims by local, state <br /> and federal government customers brought by several state Attorneys General against <br /> Stericycle Inc., a medical waste disposal company, under the False Claims Act for <br /> illegal price increases. A former government customer-relations specialist blew the <br /> whistle on Stericycle's acts, identifying fuel and energy surcharges that bore no relation <br /> to the company's costs. This ultimately led to a class-action lawsuit alleging that <br /> Stericycle illegally imposed 18% price increases annually on its government customers <br /> with long-term fixed price contracts that either did not permit price increases or <br /> permitted them only to address increases in the company's costs. <br /> The total amount of overcharges between 2004 and 2008 was determined to be $11.76 <br /> million. However, in October 2015, Stericycle agreed to a total settlement amount of <br /> $28.5 million due to the False Claims Act's treble damages and attorney's fees <br /> provisions. <br /> On February 1, 2016, the allocation of the $28.5 million settlement was approved. The <br /> money will be disbursed to the whistleblower, the United States, 14 states and <br /> Washington D.C. In California, the California Attorney General has allocated the <br /> settlement proceeds among the government entities that did business with Stericycle. <br /> Redwood City's share is $2,693.72. The City Attorney's office received a notice of <br /> settlement from the California Attorney General's office on March 29, 2016, which is <br /> attached. <br /> Page 1 of 2 <br />