Stericycle Lawsuits: Settlements, FCPA, and DOJ Actions

Stericycle lawsuits have cost the medical waste company well over $500 million since 2013, resolving allegations that span consumer overcharging, government fraud, securities misrepresentation, foreign bribery, mishandling of controlled substances, hazardous waste violations, and deceptive sales tactics. Waste Management (WM) acquired Stericycle in November 2024 for roughly $7.2 billion and folded it into a new WM Healthcare Solutions division, inheriting the tail end of several of these matters.¹

The $295 Million Automated Price Increase Class Action

The largest consumer case against Stericycle concerned what plaintiffs called “Automated Price Increases,” or APIs. Starting in at least 2003, Stericycle’s billing software automatically raised prices on small-quantity customers by as much as 18 percent every six to twelve months.² Those customers, mainly dentists, veterinarians, and small medical offices, made up about 97 percent of Stericycle’s worldwide customer base and roughly 63 percent of its revenue.³

The contracts allowed rate adjustments only for documented operational or legal changes, but the automatic increases were tied to neither. They existed to hit internal growth targets, and senior executives tracked the results in monthly “PI Impact analysis reports.” When customers called to complain, employees were trained to provide fabricated justifications and offer token “reductions” that were actually still increases.² Plaintiffs estimated total overcharges at $608 million.⁴

The case, filed April 3, 2013, as Lyndon Veterinary Clinic, PLLC v. Stericycle, Inc. in the Northern District of Illinois, became MDL No. 2455. Judge Robert W. Gettleman certified a nationwide class on February 16, 2017.⁵ Stericycle agreed to pay $295 million, and Judge Milton I. Shadur gave final approval on March 8, 2018.⁶

The class covered every small-quantity customer whose prices were increased through the API between March 8, 2003, and October 26, 2017. More than 254,000 class members were paid directly from Stericycle’s billing records with no claim form required, at an average of about $930.⁷⁸ Stericycle also had to stop using automated price increases within 60 days and accept three years of monitoring by a retired federal judge.³ Initial checks went out in August 2018, with a final payment on May 31, 2019.⁶

Government Overcharging: The $26.75 Million False Claims Act Settlement

The same automated pricing scheme also hit public customers. Former Stericycle employee Jennifer D. Perez filed a whistleblower complaint in 2008 under the False Claims Act, alleging that Stericycle had imposed unauthorized price increases on government entities since 2003 (United States ex rel. Perez v. Stericycle, Inc., N.D. Ill.).⁹

Stericycle stopped applying the API to federal customers around September 2006 after internal objections, but kept using it for state and local government accounts, including school districts, police departments, jails, hospitals, and municipalities across at least a dozen states and the District of Columbia.² Illinois officials pointed to specific examples: the Illinois Veterans’ Home was overcharged more than $43,000, and Maine Township High School District 207 more than $50,000.¹⁰

The federal portion of a $26.75 million settlement closed in October 2015, with $1.75 million allocated to the whistleblower’s attorneys’ fees and costs. Several states, including New York with a separate $2.4 million agreement covering nearly 1,000 government entities, had already settled in 2013 and 2014.¹¹ Stericycle denied wrongdoing as part of the deal.⁹

Securities Fraud: The $45 Million Investor Settlement

Investors sued next, alleging Stericycle’s public statements masked the fact that its growth and margins were being driven by the hidden unauthorized price increases. The case, In re Stericycle, Inc. Securities Litigation (Case No. 1:16-cv-07145, N.D. Ill.), was led by the Public Employees’ Retirement System of Mississippi and the Arkansas Teacher Retirement System, and covered a class period from February 7, 2013, through February 21, 2018. Plaintiffs said Stericycle publicly dismissed the pricing suits as “without merit” while also concealing problems integrating hundreds of acquisitions.¹²

The case settled for $45 million in cash, approved by Judge Andrea R. Wood on July 22, 2019.¹³ Claims administration wrapped in December 2023, and distributions to eligible shareholders began in October 2024, with further payments in February 2026 and on a rolling basis.¹⁴

Foreign Bribery: The $84 Million FCPA Resolution

In April 2022, the DOJ and SEC jointly resolved Foreign Corrupt Practices Act charges. Between 2011 and 2016, Stericycle paid roughly $10.5 million in bribes to government officials in Brazil, Mexico, and Argentina to win contracts, release payments, and avoid fines, generating at least $21.5 million in profits. Employees tracked the payments in spreadsheets using code words such as “CP” in Brazil, “IP” in Mexico, and “alfajores” in Argentina, and disguised them through sham vendors with false invoices.¹⁵

The combined resolution topped $84 million. The DOJ imposed a $52.5 million criminal penalty with a credit of up to one-third for fines paid to Brazilian authorities, and the SEC ordered about $28 million in disgorgement and prejudgment interest, with a further credit of up to roughly $4.2 million for Brazilian payments.¹⁶ Stericycle entered a three-year deferred prosecution agreement and was required to retain an independent compliance monitor for two years followed by a year of self-reporting.¹⁵

The monitor certified in May 2024 that Stericycle’s compliance program was “reasonably designed and implemented to prevent and detect violations of the anti-corruption laws.” A federal judge in the Southern District of Florida dismissed the charges on April 28, 2025, ending the deferred prosecution agreement seven months early.¹⁷

Controlled Substances: The $56 Million DOJ Settlement

A separate DEA and FBI investigation examined Stericycle’s role as a DEA-registered “reverse distributor” of pharmaceutical waste from 2015 to 2020. In that role, the company was supposed to receive and destroy unused or expired controlled substances from pharmacies and other facilities. Instead, according to the DOJ, Stericycle stored controlled substances in unlocked trailers, operated facilities with non-functional security cameras, and used unregistered temporary storage sites to avoid DEA inspections.¹⁸

The company failed to report thefts and significant losses of controlled substances to the DEA on at least four occasions, offering unsupported justifications rather than the required Form 106. The DOJ said employees and others stole medications, and expired drugs ended up sold illegally on the street.¹⁸

Announced May 29, 2026, the resolution totaled more than $56 million: $19.08 million as a criminal penalty under a one-year deferred prosecution agreement and $37.81 million to resolve civil liability under the Controlled Substances Act. The DPA requires continued cooperation, an enhanced compliance program, independent oversight, employee training, and mandatory reporting. The government noted Stericycle had divested the relevant business unit in April 2020 and that the remaining company had been acquired by WM in November 2024.¹⁸

Environmental and Hazardous Waste Enforcement

Stericycle’s environmental record produced enforcement at both federal and state levels. In January 2025, the DOJ and EPA announced a nationwide settlement covering violations of the Resource Conservation and Recovery Act (RCRA) at facilities across all ten EPA regions from 2014 to 2020, when Stericycle ran 13 RCRA-permitted treatment, storage, and disposal facilities plus 44 waste transfer sites.¹⁹

Stericycle admitted losing track of hazardous waste shipments, delivering waste to unauthorized facilities, rerouting waste without customer consent, storing hazardous waste at transfer stations beyond the 10-day limit, and failing to submit thousands of required manifests to the EPA’s electronic tracking system.²⁰ The $9.5 million civil penalty was described as one of the largest ever under RCRA. Because Stericycle had sold its hazardous waste business (branded “Stericycle Environmental Solutions”) in April 2020, the settlement did not require ongoing corrective action.¹⁹

Utah Incinerator

A 2013 video of a “bypass event” at Stericycle’s medical waste incinerator in North Salt Lake, Utah, in which emissions were released to protect equipment, triggered public protests. State investigators later found the facility had exceeded emission limits and falsified stack test results over 13 months.²¹ Stericycle agreed in December 2014 to a $2.3 million fine, with an option to pay half if it relocated to sparsely populated Tooele County. The EPA reached a separate 2021 settlement adding a $600,000 civil penalty and a $2 million supplemental environmental project donating low-emission school buses to a local district. Incineration at North Salt Lake ended June 30, 2022, though the site kept operating as a collection and transportation hub.²²

Tacoma Fires

A July 2018 fire at Stericycle’s hazardous waste facility in the Tacoma tideflats ignited when drums of tetrazole, an airbag chemical, caught fire during processing. Investigators found the drums had been emptied improperly rather than sent to a licensed incinerator. A second fire that year came after chemicals mixed in the shredder, a practice the Washington Department of Ecology had specifically warned against in 2017.²³ A $1.9 million state fine, unsuccessfully appealed, grew into a $2.2 million settlement in June 2020 requiring permit modifications, mandatory management certification of testing during waste processing, and enhanced training. The facility was later sold to Clean Earth.²⁴

California

In June 2024, Stericycle and related entities paid $3.1 million to the California Department of Toxic Substances Control over hazardous waste violations at a Rancho Cordova facility in Sacramento County.²⁵

State Consumer Protection Actions

State attorneys general have also pursued Stericycle over its sales and billing tactics. In 2019, the New Jersey Attorney General settled for $867,800 over allegations that Stericycle sales agents pressured dentists into buying a “Hazardous Drug Disposal Service Black Box Program” by falsely claiming EPA rules required it. No such rule existed. The state also alleged unauthorized price increases and situations where Stericycle let unauthorized individuals sign contracts on dentists’ behalf, then refused to cancel them. The settlement broke down as $500,000 to the Department of Environmental Protection, $155,000 to the Division of Consumer Affairs, and $205,160 in restitution to 155 dentists.²⁶

In August 2025, the New York City Business Integrity Commission announced a settlement exceeding $2 million after an audit found Stericycle had failed to comply with BIC contract rules, resulting in overcharges to multiple NYC customers. Stericycle, which serves more than 14,000 customers in New York City, reimbursed affected customers and hired a consultant to bring its contracts into compliance.²⁷

Wage and Hour Class Action

In 2018, Stericycle agreed to a $2 million settlement with roughly 985 California employees who worked at company locations between August 2010 and September 2017. The workers alleged denied meal and rest breaks, unpaid overtime, payroll time rounded to reduce wages, and uncompensated time changing into required uniforms. The case was filed in the Central District of California.²⁸

Where Things Stand Under WM

WM closed its $7.2 billion acquisition of Stericycle on November 4, 2024, at $62 per share in cash. Stericycle shares stopped trading on the NASDAQ that day.¹ The DOJ and FTC cleared the deal in August 2024, and Canadian regulators followed in October 2024.²⁹

By closing, WM had confirmed that the pricing-practices monitor from the $295 million class action had completed its work and that the FCPA monitorship had recently ended; the FCPA deferred prosecution agreement was formally dismissed with prejudice on April 28, 2025.¹⁷ The newer controlled substances DPA, entered in May 2026, remains active on its one-year term.¹⁸ On WM’s Q2 2025 earnings call, CEO Jim Fish acknowledged that integrating Stericycle’s systems and onboarding customers had produced billing problems, though he said the company was making “significant progress” in resolving them.³⁰

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