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What happened
Sotera Health (SHC -33.27%) stock took a massive tumble on Monday, making it one of the worst-performing healthcare stocks. Investors sold out of the company after a jury reached a verdict against it in a lawsuit taking place in Illinois. As a result, Sotera’s stock price plummeted by more than 33% on the day.
So what
That morning, a jury convened in the state’s Cook County determined that Sotera, Sterigenics, and privately held company Griffith Foods must pay plaintiff Susan Kamuda a total of $363 million. Kamuda claimed that ethylene oxide emissions from a Sterigenics factory in the state caused her breast cancer and the non-Hodgkin’s lymphona suffered by her son.
Sterigenics is a Sotera subsidiary that specializes in healthcare equipment sterilization. Griffith Foods is a successor company to the entity that originally built and operated the factory.
The jury’s award was higher than the $346 million Kamuda’s lawyers asked for during the court proceeding.
A 2018 Environmental Protection Agency study indicated that residents living near the plant got cancer at nine times over the U.S. average. The state ordered the facility shut the following year.
Now what
Kamuda is only one of over 700 people who have sued Sterigenics over the cancer claims. Kamuda’s lawsuit is the first to be completed, and as such will likely provide somewhat of a template for subsequent cases. Sterigenics’/Sotera’s legal woes, then, are probably far from over.
On Monday, Sterigenics issued a statement which read, in part, “We do not believe the jury verdict in this matter reflects the evidence presented in court. Sterigenics is evaluating the verdict and plans to challenge this decision through all appropriate process, including appeals.”
“As we have consistently done throughout our history, we will continue to operate in compliance with applicable rules and regulations to ensure the safety of our employees, the communities in which we operate and patients around the world,” it added.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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