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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION

BCBSM, INC., et. al. ) Case No. 1:20-cv-01853

)

) Honorable Virginia M. Kendall

Plaintiffs/Counter-Defendants, ) Honorable Sheila M. Finnegan

)

v. )

) Related Cases:

WALGREEN CO. and WALGREENS ) Case No. 1:20-cv-04738

BOOTS ALLIANCE, INC. ) Case No. 1:20-cv-03332

) Case No. 1:20-cv-01929

Defendants/Counter-Plaintiffs. ) Case No. 1:20-cv-04940

) Case No. 1:22-cv-01362

PLAINTIFFS CAREFIRST OF MARYLAND, INC., GROUP HOSPITALIZATION AND 

MEDICAL SERVICES, INC., CAREFIRST BLUECHOICE, INC., BLUE CROSS AND 

BLUE SHIELD OF SOUTH CAROLINA, BLUECHOICE HEALTHPLAN OF SOUTH 

CAROLINA, INC., LOUISIANA HEALTH SERVICE & INDEMNITY COMPANY, 

D/B/A/ BLUE CROSS AND BLUE SHIELD OF LOUISIANA, AND HMO LOUISIANA,

INC.’S RESPONSE TO DEFENDANTS’ MOTION TO DISMISS AND MOTION FOR

LEAVE TO SEVER AND AMEND THE UNDERLYING ACTIONS

INTRODUCTION

Pursuant to Rules 15 and 21 of the Federal Rules of Civil Procedure, Plaintiffs CareFirst 

of Maryland, Inc., Group Hospitalization and Medical Services, Inc., and CareFirst BlueChoice, 

Inc. (collectively, “CareFirst Plaintiffs”); and Blue Cross and Blue Shield of South Carolina and 

BlueChoice HealthPlan of South Carolina, Inc., Louisiana Health Service & Indemnity Company 

d/b/a/ Blue Cross and Blue Shield of Louisiana and HMO Louisiana, Inc. (collectively, “South 

Carolina and Louisiana Plaintiffs”), hereby respond to Defendants Walgreen Co. and Walgreens 

Boots Alliance, Inc.’s (collectively, “Walgreens”) Motion to Dismiss (ECF No. 267), by seeking 

leave of the Court to sever the concededly diverse South Carolina and Louisiana claims from the 

CareFirst Plaintiffs’ claims and to grant the CareFirst Plaintiffs leave to amend their complaint to 

assert a cause of action under the Racketeer Influenced and Corrupt Organizations (RICO) Act, 18 

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U.S.C. § 1961, et. seq. The result would be that Plaintiffs’ claims against Defendants would 

proceed with two separate actions: (1) an action brought by South Carolina and Louisiana

Plaintiffs, over which the Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332 

because South Carolina and Louisiana Plaintiffs are citizens of South Carolina and Louisiana,

Defendants are citizens of Delaware and Illinois, and their amount in controversy exceeds $75,000; 

and (2) a separate action brought by CareFirst Plaintiffs, over which the Court has subject matter 

jurisdiction pursuant to 28 U.S.C. § 1331 because CareFirst Plaintiffs’ claims arise under federal 

law and under 18 U.S.C. § 1964(c).

1 Plaintiffs met and conferred with Defendants regarding the 

relief sought in advance of filing, and Defendants indicated that they oppose the motion.

ARGUMENT

Defendants filed their Motion to Dismiss (ECF No. 267) on May 16, 2022, in which they 

asserted that the Court should dismiss this action due to lack of complete diversity under 28 U.S.C. 

§ 1332. Defendants conceded that South Carolina and Louisiana Plaintiffs were diverse from 

Defendants, but contended that one of the CareFirst Plaintiffs, Group Hospitalization and Medical 

Services, Inc. (“GHSMI”), was stateless for purposes of diversity jurisdiction because it is a 

federally chartered corporation. ECF No. 267, passim. 

Though Plaintiffs dispute Defendants’ arguments that GHSMI cannot maintain an action 

before this Court under 28 U.S.C. § 1332, or that this Court lacks diversity jurisdiction over the 

entire current action,

2 CareFirst Plaintiffs now amend their complaint to assert two RICO claims,

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If the Court grants Plaintiffs’ motion, Plaintiffs submit that the resulting two cases could and 

should be consolidated for pretrial purposes with the other pending Blue Cross Blue Shield / 

Walgreens cases before this Court, just as Plaintiffs’ original case was. 

2 To the extent that, in the future, Walgreens reasserts its argument that GHMSI cannot invoke 

diversity of citizenship to litigate in federal court, the CareFirst Plaintiffs reserve all grounds to 

oppose Walgreens’ entirely incorrect position.

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which would moot Walgreens’ purported jurisdictional challenge. Pertinently, only CareFirst 

Plaintiffs currently intend to assert these RICO claims, which allege an unlawful enterprise and 

conspiracy involving Walgreens and nonparty Caremark, CareFirst Plaintiffs’ pharmacy benefit 

manager (“PBM”).

3 South Carolina and Louisiana Plaintiffs are not raising these RICO claims. By 

severing the actions, and by granting CareFirst Plaintiffs leave to amend to assert their RICO 

claims, the Court can simplify these proceedings expeditiously and render unnecessary a resolution 

of Defendants’ Motion to Dismiss. See Trading Technologies Intern., Inc. v. BGC Partners, Inc., 

No. 10 C 715, 2010 WL 3272842, **1-2 (N.D. Ill. Aug. 17, 2010) (collecting cases and holding 

that the defendant’s motion to dismiss the original complaint was rendered moot by the amended 

complaint, thus denying the motion). 

The Court should permit Plaintiffs leave to amend as the Federal Rules of Civil Procedure 

provide a liberal policy for amending pleadings. Under Rule 15(a), leave to amend a party’s 

pleadings “shall be freely given when justice so requires.” Fed. R. Civ. P. 15(a). See generally 

Foman v. Davis, 371 U.S. 178, 182 (1962) (reversing denial of leave to amend by citing to Rule 

15 (a)(2)’s mandate to freely give leave to amend and stating “this mandate is to be heeded”); 

Runnion v. Girl Scouts of Greater Chi., 786 F.3d 510, 519 (7th Cir. 2015) (reversing post-judgment 

denial of leave to amend). “In the absence of any apparent or declared reason—such as undue 

delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies 

by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance 

of the amendment, futility of amendment, etc.—the leave should, as the rules require, be ‘freely 

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It bears emphasis that the United States District Court for the District of Rhode Island granted 

leave to amend to add, and rejected dismissal-like futility arguments against, substantially similar 

RICO allegations targeting CVS Pharmacy and PBMs including Caremark. See Sheet Metal 

Workers Local No. 20 v. CVS Pharmacy, Inc., 305 F. Supp. 3d 337 (D.R.I. 2018).

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given.’” Barry Aviation, Inc. v. Land O’Lakes Municipal Airport., 377 F.3d 682, 687 (7th Cir. 

2004) (quoting Foman, 371 U.S. at 182).

CareFirst Plaintiffs’ proposed First Amended Complaint is attached hereto as Exhibit A. It 

is their first amendment, is sought expeditiously before dispositive motion practice or protracted 

discovery, is made in good faith, and raises additional claims for relief arising out of Defendants’

same wrongful scheme. Defendants would not be prejudiced in any way by this amendment.

The Court should simultaneously sever the claims of South Carolina and Louisiana 

Plaintiffs, such that they would then proceed separately under the attached proposed operative 

complaint (Exhibit B), to simplify these proceedings and promote judicial economy. Federal Rule 

of Civil Procedure 21 provides that “[a]ny claim against a party may be severed and proceeded 

with separately.” Fed. R. Civ. P. 21. District courts have the inherent power to control their own 

docket, including the power to sever claims. Se-Kure Controls, Inc. v. Sennco Sols., Inc., 675 F. 

Supp. 2d 877, 878 (N.D. Ill. 2009). The Court has broad discretion to sever any claim if doing so 

will increase judicial economy and avoid prejudice to the litigants. Otis Clapp & Son, Inc. v. 

Filmore Vitamin Co., 754 F.2d 738, 743 (7th Cir. 1985); Rice v. Sunrise Express, Inc., 209 F.3d 

1008, 1016 (7th Cir. 2000). A Rule 21 severance creates two independent actions which then 

proceed as separate suits. Gaffney v. Riverboat Services of Indiana, Inc., 451 F.3d 424, 441 (7th 

Cir. 2006). The severed claims may be discrete and separate, thereby supporting severance, even 

where the facts underlying the claims overlap, so long as “severance would simplify the 

proceedings”. Gaffney, 451 F.3d at 434.

There will be no prejudice to Defendants by this amendment and severance, while at the 

same time avoiding the prejudice Plaintiffs might face if they are not afforded this procedural 

relief. Namely, this route preserves Plaintiffs’ tolling of the statutes of limitations from the filing 

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of the original complaint. In contrast, a different procedural resolution, such as dismissal without 

prejudice and refiling new complaints on different jurisdictional grounds, would subject Plaintiffs 

to the possible loss of tolling. When a party is dismissed from the case without prejudice, the 

“statute of limitations is not tolled” because the Court acts as though the initial complaint “never 

existed.” Brennan v. Kulick, 407 F.3d 603, 606 (3d Cir.2005). But when a court “severs” a claim 

against a defendant under Rule 21, the suit simply continues against the severed defendant in 

another guise. White v. ABCO Eng’g Corp., 199 F.3d 140, 145 n. 6 (3d Cir.1999). “The statute of 

limitations is held in abeyance, and the severed suit can proceed so long as it initially was filed 

within the limitations period.” DirecTV, Inc. v. Leto, 467 F.3d 842, 845 (3d Cir. 2006). This 

remedy of severance is proper rather than “dismissal because district courts are ‘duty bound’ to 

prevent misjoinder from ‘lead[ing] to a dismissal with statute of limitation consequences[.]’” 

Miller v. Illinois Bell Tel. Co., 157 F. Supp. 3d 749, 757 (N.D. Ill. 2016) (quoting Adkins v. Illinois 

Bell Tel. Co., No. 14 C 1456, 2015 WL 1508496, at *10 (N.D. Ill. Mar. 24, 2015) (quoting Elmore 

v. Henderson, 227 F.3d 1009, 1012 (7th Cir.2000))). “In formulating a remedy for a misjoinder 

the judge is required to avoid gratuitous harm to the parties, including the misjoined party.” 

Elmore, 227 F.3d at 1012.

Thus, severance is the just and equitable remedy here, allowing CareFirst Plaintiffs to 

proceed with their action asserting federal RICO claims (unquestionably supplying subject matter 

jurisdiction), and South Carolina and Louisiana Plaintiffs to proceed separately.

CONCLUSION

For the reasons set forth above, Plaintiffs respectfully request that this Court grant the 

following relief:

1. Sever Civil Action No. 1:22-cv-01362 into two independent actions:

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a. CareFirst of Maryland, Inc., Group Hospitalization and Medical Services, Inc., and 

CareFirst BlueChoice, Inc. v. Walgreen Co. and Walgreens Boots Alliance, Inc.; 

and

b. Blue Cross and Blue Shield of South Carolina; BlueChoice HealthPlan of South 

Carolina, Inc.; Louisiana Health Service & Indemnity Company d/b/a/ Blue Cross 

and Blue Shield of Louisiana and HMO Louisiana, Inc. v. Walgreen Co. and 

Walgreens Boots Alliance, Inc.

2. Grant Plaintiffs leave to amend their original complaint to reflect this severance and 

for the CareFirst Plaintiffs to assert their RICO claim, as reflected in Exhibits A and B.

3. Deny Defendants’ Motion to Dismiss as moot.

Dated: June 9, 2022 Respectfully submitted,

/s/ Samera Syeda Ludwig 

Samera Syeda Ludwig

Samera Syeda Ludwig

L&G LAW GROUP LLP

175 West Jackson Blvd, Suite 950

Chicago, Illinois 60604

Tel: (312) 364-2500

Fax: (312) 364-1003

sludwig@lgcounsel.com

Robert B. Gilmore (admitted pro hac vice)

Michael A. Petrino (admitted pro hac vice)

Kevin L. Attridge (pro hac vice forthcoming)

Susie Kim (admitted pro hac vice)

Megan Benevento (pro hac vice forthcoming)

STEIN MITCHELL BEATO & MISSNER LLP

901 15th Street, N.W., Suite 700

Washington, D.C. 20005

Tel: (202) 737-7777

Fax: (202) 296-8312

rgilmore@steinmitchell.com

mpetrino@steinmitchell.com

kattridge@steinmitchell.com

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susie.kim@steinmitchell.com

mbenevento@steinmitchell.com

Attorneys for Plaintiffs

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