Sotera Health Co. (Nasdaq: SHC) of Ohio said it has finalized settlements of ethylene oxide claims against its Sterigenics subsidiary in Cook County, Illinois.
There were 882 claimants eligible to participate in the settlement program, and 879 of them opted in, Sotera said in a news release issued Thursday, June 22. Sotera, a lab and sterilization services provider, is paying $408 million to settle the cases, which asserted that ethylene oxide from Sterigenics' Willowbrook, Illinois, facility caused cancer and other health issues. The deal came after a jury awarded $363 million last year to a Illinois woman suing the company for allegedly causing her breast cancer.
Related: A dirty business: How the medical device sterilization process sickens some to heal others
Sotera shares were up sharply on the announcement. As of 11:40 a.m. Thursday, the company's stock was trading at $17.86 per share, up $2.86, or more than 19%, from the close on Wednesday, June 21.
Claimants and Sterigenics now will ask a circuit court to enter an order confirming the settlements under the Illinois Contribution Among Joint Tortfeasors Act. Settlement funds will be released from escrow for disbursement to the claimants 10 days after the court enters the good-faith determination, and their claims against Sterigenics then will be dismissed with prejudice.
Lawsuits of the three claimants who opted out of the settlement will proceed to pretrial discovery under a schedule set by the court.
The company issued this statement about the settlements:
"We are pleased that 99.7 percent of the eligible claimants are participating in the settlements. The agreements explicitly state that the settlements are not to be construed as an admission of liability, and Sterigenics maintains that its Willowbrook operations did not pose a safety risk to the surrounding community. As we have done throughout our history, we will continue to operate all our facilities in compliance with applicable rules and regulations and best industry practices to ensure the safety of our employees, the communities in which we operate and patients around the world."
Related: EPA to strengthen ethylene oxide regulation
Bloomberg Law reported in April that Sotera "paid $8.1 million to three law department leaders last year" as it grappled with legal issues.
It noted that Alexander Dimitrief, a former general counsel at General Electric Co. who was hired by Sotera in November, "received the bulk of that total compensation at more than $5.1 million. Sotera disclosed in a proxy statement that it also paid nearly $1.9 million to Dimitrief's predecessor, Terrence Hammons Jr., and more than $1 million to former interim legal chief Matthew Klaben."
This story first appeared in Crain's Cleveland Business.
