A district judge granted preliminary approval to a settlement for a class action suit brought against HIMSS by exhibitors for its conference last year.
HatchMed, a Seattle-based technology company that was registered to exhibit at the 2020 tradeshow and Novarad, another healthcare technology company added later to the case as a plaintiff, are representing exhibitors who did not receive refunds following the cancellation of the 2020 Healthcare Information and Management Systems Society show. A judge granted preliminary approval on Friday for the class, which could represent more than 850 entities.
HIMSS20 was scheduled to start March 9 in Orlando last year and organizers announced March 5 that the show would be canceled after the World Health Organization declared COVID-19 a global pandemic. Chicago-based HIMSS originally announced no refunds, which drew a lot of ire from exhibitors and registrants. HIMSS then adjusted its policy and announced last April that it would provide partial credits for the HIMSS21 and HIMSS22 events. Instead of refunding exhibitors and sponsors, the organization offered a deal where 15 percent of a company or individual’s 2020 fees would go toward their participation in the 2021 conference and 10 percent in 2022.
In June 2020, HatchMed Corp., a small business that sells medical devices, beds, and stretchers, and several other companies that paid fees to attend the 2020 show, filed a class-action lawsuit in the U.S. District Court for the Northern District of Illinois. In the suit, HatchMed said it booked a 10×20 booth for $11,075 in November 2019 to exhibit its products during the 2020 conference. Other businesses looking to participate in the five-day show executed similar contracts, it claimed. The HIMSS conference typically attracts 1,300 exhibitors each year, according to the suit.
“However, unlike other industry-wide tradeshows, HIMSS decided to utilize its cancellation as an unauthorized cash grab, as it unilaterally determined to keep the money that its exhibitors paid,” HatchMed’s suit claimed. That decision breached the contracts HIMSS entered with HatchMed and at least 100 other exhibitors, according to the suit.
During a remote hearing, U.S. District Judge Martha Pacold said the parties had presented an “extensive” and “thorough” argument for granting the deal preliminary approval on March 12. The court will hold a final approval hearing remotely on June 24. Under the settlement, HIMSS will set up a $2.8 million fund to pay members of the settlement class for exhibit space, meeting space or sponsorships at the 2020 show. Rewards will go to those who have not settled and released their claims and will be distributed through either a cash-credit option or a credit-only option.
For those who go with the cash-credit option, HIMSS will pay back 20 percent of 2020 exhibit fees in cash and credit 30 percent toward fees for the 2021 tradeshow and 10 percent for the 2022 tradeshow. The credit-only option credits 50 percent of a member’s 2020 fees toward their fees in 2021 and 10 percent to 2022.
HIMSS denies any liability and wrongdoing in the litigation. “HIMSS confirms a settlement agreement has been reached with class members in the lawsuit HatchMed Corp. and Novarad Corp. v. Healthcare Information and Management Systems Society, Inc.,” says Karen Groppe, senior director of strategic communications for HIMSS. “Documents reflecting the negotiated resolution have been filed with the court for preliminary approval and HIMSS looks forward to finalizing the matter. Because this is still an active legal case, HIMSS has no additional comment at this time.”
The court will hold a hearing to determine whether to approve the settlement in June. HatchMed is represented by Peyton Healey of Hedrick Kring PLLC and Nicholas Peters and Nicole Little of Fitch Even Tabin & Flannery. HIMSS is represented by Mark Mester, Kirsten Caroline Lee, and Robert C. Collins III of Latham & Watkins. The Case No. is 1:20-cv-03377 (N.D. Ill.) HatchMed Corp. v. Healthcare Information and Management Systems Society, Inc.