In a recent whistleblower lawsuit, a medical waste disposal company has agreed to pay $28.5 million to settle the qui tam lawsuit.

The whistleblower lawsuit states that the company had illegally raised its prices to garner millions from federal government claims, 14 states and Washington D.C.

Former government customer relations specialist at Stericycle Inc., Jennifer P., filed the whistleblower lawsuit against her employer.

Her qui tam action lawsuit claims that the company had engaged in long-term price fixing with federal and state government clients by imposing 18 percent price increases at least once per year.

Furthermore Stericycle’s contracts gave no room for price negotiation, but the price could increase when addressing the services the company provided. The lawsuit indicates that the investigation was initially conducted by the New York attorney general’s office, which originally found that government customers were frequently charged increased prices.

The investigation resulted in Stericycle paying a $2.4 million settlement to the state in January 2013. At all times relevant to Jennifer’s whistleblower lawsuit, Stericycle produced data showing its transaction history with government clients between 2002 and 2014.

The data revealed that the state or federal governments were overcharged by approximately $13.57 million. Of the total settlement amount, $26.75 million will be paid to the government while Jennifer will receive $5.7 million for her role as a whistleblower. The remaining $1.75 million will be used to pay for attorneys’ fees, along with other costs and expenses.

Overview of Whistleblower Qui Tam Litigation

A whistleblower in an individual of a company who comes forward and reports their employer for government fraud. These lawsuits, also known as qui tam claims, are filed by whistleblowers under the False Claims Act.

These lawsuits can be filed by a current or former employees, or contractor or subcontractor who has some form of knowledge of the alleged violations. It is important to note that qui tam allegations can not be based on public information, unless the whistleblower is the source of that information.

Qui tam action lawsuits are kept confidential while the government conducts its investigation, and also gives the government time to decide whether or not to participate in the lawsuit. Whistleblowers can potentially receive 15 percent to 30 percent of the money the government recovers from the qui tam lawsuit, under the False Claims Act.

This qui tam action is being handled under U.S. District Judge William T. Hart, who stated that the total overcharge had been reduced to $11.76 million after finding some private customers of Stericycle had been miscoded as government.

The states involved in the settlement include: California, Delaware, Florida, Illinois, Indiana, Massachusetts, Nevada, New Hampshire, New Jersey, New York, North Carolina, Rhode Island, Tennessee and Virginia.

The U.S. attorney general and the attorney generals of the above states along with Washington D.C. had originally consented to the idea of voluntary dismissal, but did not provide sufficient information to the court. All relevant information and data has since been provided for the qui tam suit.

The Stericycle Whistleblower Lawsuit is United States of America v. Stericycle Inc., Case No. 1:08-cv-02390, in the U.S. District Court for the Northern District of Illinois.