City of Newberry

City Commission Agenda Item

Meeting Date: January 25, 2016

Title: Acceptance of Settlement Agreement between of America et al. ex rel Perez v. Stericycle Inc.

Agenda Section: VIII. C.

Department: Legal

Presented By: S. Scott Walker

Recommended Action: Hold on recommendation for further legal research

Summary: In 2009, then Fire Chief David Rodriguez executed an Agreement with Stericycle, Inc. for collection and transport of regulated medical waste. This Agreement was not approved by the City Manager or the City Commission. The original cost per pick up in 2009 was $82.00. Over time, that cost increased to $417.52 per pickup as recently as June 2015. Chief Ben Buckner was concerned about this high price and researched alternatives that were substantially lower.

Chief Buckner attempted negotiations with Stericycle, but Stericycle was unresponsive. This culminated in a letter to Stericycle dated June 9, 2015 from the City that the Agreement was never approved by the Commission, and further, the Commission never approved the increase in billed amount. After several more emails regarding the same, Stericycle stopped picks up for the City of Newberry, and stopped sending invoices late in 2015

On July 23, 2013, litigation was filed against Stericycle on behalf of the United States and several states, including the state of Florida. The litigation was filed pursuant to the Federal False Claims Act, and several other state acts, including the Florida False Claims Act. The Plaintiffs argued Stericycle overcharged customers through the use of impermissible fuel and energy surcharges, and automatic price increases without authorization. The litigation did not include local governments such as the City of Newberry, as local governments are not covered under the False Claims Act. However, in negotiating a settlement, the Attorney General requested the inclusion of local governments in Florida.

The total settlement amount for the state of Florida is $3,500,000.000. After the Attorney General paid 15% of the settlement to the former employee of Stericycle who instituted the

litigation, the remaining settlement was divided among the state agencies and local governments in Florida who had done business with Stericycle.

The Attorney General calculated the settlement values by calculating how much each individual municipality paid Stericycle during the covered period assuming an 18% overcharge. These figures are attached as the local payment amounts. The Attorney General then negotiated for double damages which results in an amount of $7,232.58 for the City of Newberry.

If the City Commission wants to accept the settlement, the check must be deposited by February 29, 2016, or the City forfeits its rights to the settlement amount. If the City Commission accepts the settlement, it will give up all rights to further claims against Stericycle. The specific release language found in the Settlement Agreement is as follows:

“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.”

If the City does not accept the settlement, the City can initiate its own litigation against Stericycle. However, the City would then be responsible for litigation costs. In addition, the Florida False Claims Act will not be an available avenue for recovery which allows for up to triple damages. The Florida Attorney General has advised she believes this settlement represents a favorable outcome.

The City Attorney’s office continues to research additional terms of the settlement, and will provide an update to the Commission on additional findings at the Commission meeting.

Attachments: 1. Letter from Pam Bondi, Attorney General for the State of Florida; 2. Settlement Agreement; 3. Complaint in United States et al. ex rel. Perez v. Stericycle, Inc. 4. Stericycle local payments amount; 5. Press release from Pam Bondi’s office; 6. Agreement with Stericycle (executed by former Fire Chief David Rodriguez) 7. Letter to Stericycle from City 6-9-15; 8. Email correspondence to Stericycle from City

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Name Amount CITY OF WEST PALM BEACH $ 147,688.90 LEE COUNTY $ 63,268.84 ESCAMBIA COUNTY $ 57,148.72 HILLSBOROUGH COUNTY $ 27,571.82 CITY OF LAKELAND $ 27,011.67 CITY OF WINTER GARDEN $ 24,005.41 BROWARD COUNTY $ 20,358.61 ALACHUA COUNTY $ 18,650.76 HARDEE COUNTY $ 17,108.70 HAMILTON COUNTY $ 15,489.08 DIXIE COUNTY $ 13,811.06 PUTNAM COUNTY SCHOOL BOARD $ 13,778.43 CITY OF MIAMI BEACH $ 13,628.40 CITY OF JACKSONVILLE $ 12,244.24 CITRUS COUNTY $ 11,739.78 CITY OF SANFORD $ 11,677.33 CITY OF LONGWOOD $ 11,602.39 WINTER PARK FIRE‐RESCUE DEPARTMENT $ 11,534.41 PINELLAS COUNTY $ 11,235.64 NASSAU COUNTY $ 10,798.95 CITY OF BARTOW $ 10,021.52 CITY OF APOPKA $ 9,811.20 GILCHRIST COUNTY $ 8,316.30 SUWANNEE COUNTY SCHOOLS $ 8,253.86 MARION COUNTY $ 7,171.36 BRADFORD COUNTY $ 7,155.62 LEVY COUNTY $ 6,939.21 HIGHLANDS COUNTY $ 6,897.15 ST JOHNS COUNTY $ 6,891.34 POLK COUNTY $ 6,856.22 SOUTH WALTON FIRE DISTRICT $ 6,696.72 TAYLOR COUNTY SCHOOL BOARD $ 6,578.94 OKALOOSA COUNTY $ 6,573.96 SUMTER COUNTY $ 6,087.40 HERNANDO COUNTY $ 6,071.45 PASCO COUNTY $ 6,036.54 CITY OF CRESTVIEW $ 5,230.48 MANATEE COUNTY $ 5,112.85 MADISON COUNTY $ 4,757.36 CITY OF FERNANDINA BEACH $ 4,700.08 INDIAN RIVER COUNTY $ 4,526.66 CITY OF WILTON MANORS $ 4,147.89 CITY OF NORTH MIAMI BEACH $ 4,112.59 CITY OF TITUSVILLE $ 3,933.79 JACKSON COUNTY $ 3,807.60 CITY OF WINTER HAVEN $ 3,800.82 OKEECHOBEE COUNTY $ 3,757.66 ORANGE COUNTY SCHOOL DISTRICT $ 3,752.58 CITY OF NEWBERRY $ 3,616.29 CITY OF TALLAHASSEE $ 3,588.69 CITY OF OCALA $ 3,499.68 CITY OF TEMPLE TERRACE $ 3,468.79 CITY OF MAITLAND $ 3,373.36 CITY OF TAMPA $ 3,208.48 BRADFORD COUNTY SCHOOL DISTRICT $ 3,112.99 WAKULLA COUNTY $ 2,965.43 JEFFERSON COUNTY $ 2,832.54 CHARLOTTE COUNTY PUBLIC SCHOOLS $ 2,744.09 BREVARD COUNTY $ 2,410.88 OSCEOLA COUNTY $ 2,392.92 TOWN OF LONGBOAT KEY $ 2,386.35 CITY OF CORAL SPRINGS $ 2,286.72 MIAMI‐DADE COUNTY SCHOOL DISTRICT $ 2,223.34 CITY OF BRADENTON $ 2,193.20 CHARLOTTE COUNTY $ 2,183.88 SEMINOLE COUNTY $ 2,133.70 COLLIER COUNTY $ 2,119.53 GADSDEN COUNTY $ 2,057.46 TAYLOR COUNTY $ 2,016.02 SARASOTA COUNTY $ 2,004.00 HENDRY COUNTY SCHOOL DISTRICT $ 1,936.77 CITY OF TARPON SPRINGS $ 1,933.65 DESOTO COUNTY $ 1,767.93 SUMTER COUNTY SCHOOL BOARD $ 1,678.60 COLUMBIA COUNTY $ 1,558.74 CITY OF GAINESVILLE $ 1,532.73 ALACHUA COUNTY SCHOOL DISTRICT $ 1,452.20 MONROE COUNTY $ 1,419.99 LEON COUNTY $ 1,354.66 CITY OF HAINES CITY $ 1,342.61 CITY OF TREASURE ISLAND $ 1,298.68 CITY OF LAKE MARY $ 1,197.78 BAKER COUNTY $ 1,148.87 CITY OF WINTER SPRINGS $ 1,099.89 OKEECHOBEE COUNTY SCHOOL DISTRICT $ 1,090.61 LAFAYETTE COUNTY SCHOOL BOARD $ 1,038.99 CITY OF PALMETTO $ 1,010.76 CITY OF CASSELBERRY $ 969.64 CITY OF LIGHTHOUSE POINT $ 924.85 CITY OF LARGO $ 797.15 CITY OF SEMINOLE $ 761.35 MARTIN COUNTY SCHOOL DISTRICT $ 738.46 FLAGLER COUNTY $ 674.28 CITY OF DUNEDIN $ 645.72 CITY OF PALM BAY $ 643.71 MARION COUNTY SCHOOL DISTRICT $ 595.38 CITY OF COCOA BEACH $ 590.22 MARTIN COUNTY $ 540.54 PINELLAS COUNTY SCHOOL DISTRICT $ 519.70 MIDWAY FIRE DISTRICT $ 518.20 CITY OF PLANT CITY $ 487.27 CITY OF QUINCY $ 445.89 PALM HARBOR FIRE DEPARTMENT $ 415.57 CITY OF NEW SMYRNA BEACH $ 404.57 TOWN OF INDIAN RIVER SHORES $ 373.53 CITY OF MELBOURNE $ 372.23 CITY OF JACKSONVILLE BEACH $ 357.79 CITY OF SAFETY HARBOR $ 356.38 TOWN OF PONCE INLET $ 330.06 POLK COUNTY SCHOOL DISTRICT $ 324.03 CITY OF PALM BEACH GARDENS $ 299.19 SANTA ROSA COUNTY $ 294.18 ST LUCIE COUNTY $ 290.38 CITY OF MARGATE $ 285.84 VOLUSIA COUNTY $ 284.05 NASSAU COUNTY SCHOOL DISTRICT $ 261.40 CITY OF SOUTH PASADENA $ 253.16 LAKE COUNTY $ 236.68 SEMINOLE COUNTY SCHOOL DISTRICT $ 235.02 CITY OF RIVIERA BEACH $ 234.04 PUTNAM COUNTY $ 231.05 PALM BEACH COUNTY SCHOOL DISTRICT $ 193.37 OSCEOLA COUNTY SCHOOL DISTRICT $ 191.22 CITY OF DELAND $ 186.42 ST LUCIE COUNTY SCHOOL BOARD $ 183.10 CITY OF SARASOTA $ 178.54 CITY OF NORTH MIAMI $ 166.07 CITY OF PENSACOLA $ 165.02 CITY OF FORT LAUDERDALE $ 142.05 VILLAGE OF TEQUESTA $ 137.52 CITY OF POMPANO BEACH $ 137.33 HERNANDO COUNTY SCHOOL DISTRICT $ 133.68 CITY OF OAKLAND PARK $ 133.34 TOWN OF DAVIE $ 128.56 ST JOHNS COUNTY SCHOOL DISTRICT $ 120.49 INDIAN RIVER COUNTY SCHOOL BOARD $ 115.20 TOWN OF JUPITER $ 109.63 CITY OF GULFPORT $ 101.08 MIAMI‐DADE COUNTY $ 100.58 CITY OF LAKE WORTH $ 84.80 TOWN OF PALM BEACH $ 81.83 CITY OF TAMARAC $ 80.92 CITY OF COCOA $ 77.89 CITY OF HIALEAH $ 69.29 CITY OF ORLANDO $ 62.30 CITY OF DAYTONA $ 55.39 CITY OF SEBRING $ 52.16 CITY OF NORTH LAUDERDALE $ 49.83 CITY OF DELTONA $ 44.66 CITY OF NORTH PORT $ 39.39 PINELLAS SUNCOAST FIRE & RESCUE DISTRICT $ 38.81 CITY OF VENICE $ 37.80 CLAY COUNTY $ 35.51 CITY OF GREENACRES $ 32.88 CITY OF KISSIMMEE $ 31.18 SOLID WASTE AUTHORITY OF PALM BEACH COUNTY $ 31.10 FLAGLER COUNTY SCHOOL DISTRICT $ 30.30 ORANGE COUNTY $ 28.35 CITY OF PALM COAST $ 18.90 CITY OF HOLLY HILL $ 15.66 TOWN OF INDIALANTIC $ 5.40 October 9, 2015 Contact: Whitney Ray Phone: (850) 245-0150

$26.75 Million Multistate Settlement Reached with Stericycle

TALLAHASSEE Fla.—Attorney General Pam Bondi today announced a $26.75 million multistate settlement with Stericycle, Inc., an Illinois-based medical waste disposal company, resolving allegations that it violated the false claims acts of 12 states, Washington, D.C., and the federal government by imposing improper fuel and energy surcharges on governmental customers. As a result of the settlement, the State of Florida and local governments, including cities, counties, and school districts, are recovering more than $3.1 million as reimbursement for these overcharges.

Also joining the settlement, are the States of , Delaware, Illinois, Indiana, Nevada, , North Carolina, Rhode Island, Tennessee, the Commonwealths of Massachusetts and Virginia, the District of Columbia, and the federal government. This settlement resolves a qui tam lawsuit filed in the United States District Court for the Eastern District of Illinois.

Qui tam actions are brought under the Florida False Claims Act. The Act authorizes a private person, or relator, who claims to have knowledge of fraud involving state funds to bring a sealed case. The Attorney General’s Office then has the opportunity to investigate the allegations, gather additional information, and intervene in and proceed with the case if appropriate. The Legislature updated this important law in 2013 to provide the Attorney General with additional authority to protect taxpayers’ money.

ATTORNEYS AT LAW

ALLISON E. FOLDS t 527 EAST UNIVERSITY AVENUE L. ALISON WALKER S. SCOTT t GAINESVILLE, FLORIDA 32601 NORMAN BLEDSOE SONDRA RANDON FETNER JEFFREY H. TRAYNHAM, LL.M.* TELEPHONE (352) 372-1282 COURTNEYW. JOHNSON** FAX (352) 375-9960 OF COUNSEL www.foldsandwalker.com t Certified Family & Circuit Civil Mediator DAVID W. WAGNER :f Certified Family Mediator Admitted to Georgia, Louisiana, **Also Admitted to West Virginia

June 9, 2015

Jeff Lindeen, Account Care Specialist Stericycle, Inc. 2333 Waukegan Road, Suite 200 Bannockburn, IL 60015 VIA U.S. MAIL

Re: City of Newberry-Service Agreement

Dear Mr. Lindeen:

This office serves as the City Attorney for the City of Newberry. The City has recently reviewed your Service Agreement executed on or about November 16, 2009, by the City's then-Fire Chief, David Rodriguez. This contract was not approved by the City Commission nor was it executed by an approved agent of the City. The City's Charter Article VI subsection (b) requires the following:

All contracts, agreements, leases or other instruments to which the City is a party and under which the City assumes any liability, shall be executed in the name of the City by the Mayor, and the City Manager (should one be appointed) and attested by the City Clerk, and the form of such instrument shall be approved by the City Attorney, provided however, that where by ordinance, rule, or regulation, the execution of short-term leases or other instruments is delegated to another person, such instrument may be executed in the manner provided by such ordinance, rule or regulation.

In addition, when this Agreement began, the cost per pickup was $82.00. Currently Stericycle is charging the City $417.52 per pickup. The increase contract was never approved by the City and the increase to the contract has never been approved by the City.

Please consider this letter as the City's notice terminating the Agreement. Thereafter, following the collection on June 25, 2015, the City will no longer require your services.

Yours Very Truly, FOLDS & WALKER, LLC

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CC: Mike New, City ManagL Dallas Lee, Finance Director Ben Buckner, Fire Chief William Conrad, Mayor