The Healthcare Information and Management Systems Society will pay $2.8 million to settle a proposed class-action related to the cancellation of the trade group’s 2020 conference and exhibition, according to a preliminary approval motion filed Friday.
The settlement would end a lawsuit that HatchMed Corp. filed in an Illinois federal court in June, seeking to represent other exhibitors who didn’t receive refunds from HIMSS.
HatchMed, a healthcare technology company slated to exhibit at the 2020 trade show, alleged it and other companies that had paid fees for exhibition space, meeting space and sponsorships for the canceled conference had suffered damages and were entitled to relief—accusing HIMSS of using “COVID-19 as a transparent opportunity for a cash grab.”
“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 wrote in its June complaint. Novarad Corp., another healthcare technology company, has since been added to the case as another plaintiff.
HIMSS canceled its 2020 event just days before it was slated to start as COVID-19 related shutdowns began in March 2020. The group has since faced pushback over its decision to not refund exhibitors and sponsors, citing a force majeure clause in its exhibitor contracts. Instead, HIMSS has offered partial credit on 2021 and 2022 conference participation.
HatchMed, Novarad and HIMSS in February executed a class-action settlement agreement, which a judge granted preliminary approval of Friday.
The court will hold a hearing to determine whether to approve the settlement in June.
Under the agreement, HIMSS would establish a $2.8 million fund to pay members of the settlement class, which would include companies that paid fees to HIMSS for exhibit space, meeting space or sponsorships at the 2020 trade show and who have not already settled and released their claims.
Members of the settlement class will have the option to select one of two options: a cash-credit option and a credit-only option.
With the cash-credit option, HIMSS would pay members of the settlement class 20% of their 2020 conference fees in cash. Members of the settlement class would also be able to credit 30% of their 2020 conference fees toward fees for the 2021 trade show and 10% of their 2020 fees toward fees for the 2022 trade show.
Under the credit-only option, members would be able to credit 50% of their 2020 fees toward fees for the 2021 trade show and 10% of their 2020 fees toward fees for the 2022 trade show.
HIMSS’ April offer to exhibitors and sponsors would have credited 25% of their 2020 fees toward their participation in its 2021 and 2022 health and information technology conferences. Participants could credit 15% of their 2020 fees to the 2021 event and 10% to the 2022 event, HIMSS told vendors.
The class could represent more than 850 entities, according to the preliminary approval motion.
HIMSS in the legal filing denied wrongdoing and liability.
“Documents reflecting the negotiated resolution have been filed with the court for preliminary approval and HIMSS looks forward to finalizing the matter,” said Karen Groppe, senior director of strategic communications at HIMSS, in a statement. “Because this is still an active legal case, HIMSS has no additional comment at this time.”
She added, “HIMSS is grateful for the support of exhibitors and attendees through these unprecedented times, and gratified by the overwhelming support of exhibitors for the upcoming HIMSS21 conference.”
HIMSS in July announced plans to push back its conference, which typically takes place in March, to August in 2021 on account of COVID-19. Healthcare executives have said they’re still weighing whether they plan to attend the 2021 trade show amid the ongoing pandemic. HIMSS has said HIMSS21 will be a “hybrid” event with options to participate in-person or virtually.