Facts

Kaiser Foundation Health Plan, Inc. and Kaiser Foundation Hospitals (Kaiser) were two public benefit corporations headquartered in Oakland, California that operated over 800 facilities statewide, including over 500 hospitals and medical office buildings, making them the largest healthcare provider in California. The action was the result of undercover inspections conducted by the district attorneys' offices of dumpsters and compactors from 16 different Kaiser facilities. During the inspections, the district attorneys' office reviewed the contents of dumpsters and compactors destined for disposal at municipal solid waste landfills and found hundreds of items of alleged hazardous and medical waste, including aerosols, cleansers, sanitizers, batteries, electronic wastes, syringes, medical tubing with body fluids, pharmaceuticals, personal care products like toothpaste and shampoo, alcohol wipes, over-the-counter medicines, and over 10,000 paper records containing information of over 7,700 patients. The California Department of Justice joined the district attorneys' office and expanded the investigation of Kaiser's disposal practices state-wide. In response to the joint law enforcement investigation, Kaiser immediately hired a third-party consultant and conducted over 1,100 trash audits at its facilities in an effort to improve compliance. Kaiser also modified its operating procedures to improve its handling, storage, and disposal of waste.

PLAINTIFFS' CONTENTIONS: Plaintiffs' complaint alleged that defendants failed to lawfully dispose of hazardous waste, medical waste, and protected health information at its healthcare facilities statewide. Plaintiffs maintained that these disposals were violations of California's Hazardous Waste Control Law, Medical Waste Management Act, Confidentiality of Medical Information Act, Customer Records Act, and Unfair Competition Law, as well as violations of the federal Health Insurance Portability and Accountability Act.

DEFENDANTS' CONTENTIONS: Defendants did not answer Plaintiffs' complaint given the settlement and concurrent filing of the consent judgment. Defendants agreed that (a) the consent judgment is a fair and reasonable resolution of the matters alleged in the Complaint, and that (b) the consent judgment is neither an admission nor a denial by the Defendant regarding any issue alleged in the Complaint nor an admission or a denial of any violation of law by Defendant.

Result

The case settled by consent judgment. As part of the settlement, Kaiser was liable for $49 million, including $37,513,000 in civil penalties, $4,832,000 in attorneys' fees and costs, and $4,905,000 for supplemental environmental projects, and was required to take significant steps to prevent future unlawful disposals.