1 

THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

MEMORANDUM OPINION AND ORDER

Walgreen Co. and Walgreens Boots Alliance, Inc. (together “Walgreens”) are defendants 

in this consolidated case brought by health care plans alleging that Walgreens fraudulently 

overcharged them for prescription drug reimbursements. Walgreens has filed third-party 

complaints against the pharmacy benefit managers (“PBMs”) that intermediate these 

reimbursement claims. (See dkts. 259, 322). Walgreens seeks contribution from the PBMs as joint 

tortfeasors in the alternative to its denial of liability for the health care plans’ purported losses. 

BCBSM, INC., et al., 

 Plaintiffs/Counter-Defendants, 

 v. 

WALGREEN CO. and WALGREENS BOOTS 

ALLIANCE, INC., 

 Defendants/Counter-Plaintiffs.

WALGREEN CO. and WALGREENS BOOTS 

ALLIANCE, INC., 

 Defendants/Third-Party Plaintiffs, 

 v. 

PRIME THERAPEUTICS LLC and 

OMEDARX, INC.

 Third-Party Defendants. 

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No. 20 C 1853 

Judge Virginia M. Kendall 

Consolidated with: 

 No. 20 C 1929 

 No. 20 C 3332 

 No. 20 C 4940 

 No. 20 C 4738 

 No. 22 C 1362 

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(Dkt. 259 ¶ 3; Dkt. 322 ¶ 3). Third-Party Defendant OmedaRx, Inc.1 moves to dismiss the ThirdParty Complaint (“TPC”) against it for failure to state a claim and lack of personal jurisdiction. 

(Dkt. 370). For the following reasons, the Motion is denied. [370]

BACKGROUND

Plaintiffs in this consolidated action are health insurers offering comprehensive health care 

services and coverage, including prescription drug coverage, to their members across the country. 

They sued Walgreens for allegedly engaging in a fraudulent scheme to overcharge Plaintiffs for 

prescription drugs by submitting claims for payment at artificially inflated prices. See, e.g.,

BCBSM, Inc. v. Walgreen Co., 512 F. Supp. 3d 837 (N.D. Ill. 2021); BCBSM, Inc. v. Walgreen 

Co., 2021 WL 2434889 (N.D. Ill. June 15, 2021).

Throughout this litigation, Walgreens has argued that, if it is liable to the Plaintiffs, then

its PBMs—claims-processing intermediaries between Walgreens and the Plaintiffs—are joint 

tortfeasors. In July 2021, Walgreens filed its TPC against a Minnesota-based PBM, Prime 

Therapeutics LLC, for contribution as a joint tortfeasor. (Dkts. 151, 152). This Court dismissed 

the Prime TPC for failure to state a claim. See BCBSM, Inc. v. Walgreen Co., 2022 WL 393596, 

at *3–5, *9–10 (N.D. Ill. Feb. 9, 2022). Walgreens filed an Amended Third-Party Complaint 

against Prime, and those claims proceed. (Dkt. 259).

In August 2022, this Court granted Walgreens leave to file a similar TPC against Oregonbased PBM OmedaRx, Inc. (Dkt. 319); see also BCBSM, Inc. v. Walgreen Co., 2023 WL 358783 

(N.D. Ill. Jan. 23, 2023) (denying motion to vacate August 2022 order granting leave to file thirdparty complaint). Walgreens now seeks contribution under Oregon and Idaho law from OmedaRx 

1 OmedaRx was formerly known as Regence Rx, Inc. (Dkt. 322 at 1). Throughout its Third-Party Complaint and its 

brief in opposition to the motion to dismiss, Walgreens refers to the third-party defendant as Regence Rx. (See 

generally dkts. 322, 393). OmedaRx uses the entity’s current name. (Dkts. 370, 411). For consistency with the case 

caption and the entity’s current name, the Court will refer to the third-party defendant as OmedaRx.

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as a joint tortfeasor. (Dkts. 321, 322). OmedaRx served as the PBM between Walgreens and certain 

regional Blue Cross Blue Shield-affiliated health plans, referred to as the “Cambia Plaintiffs.”2

(Dkt. 322 ¶¶ 1, 32, 35). OmedaRx is a wholly owned affiliate of Plaintiff Cambia Health Solutions, 

which also owns the other Cambia Plaintiffs. (Id. ¶ 41).

The Cambia Plaintiffs—along with the other named Plaintiffs in this consolidated action—

allege that Walgreens reported inaccurate “usual and customary” (“U&C”) prices for prescriptionreimbursement claims. (Id. ¶ 2). In commercial transactions, U&C prices are typically defined by 

contract and often cap the rates that health insurers pay for prescription reimbursements. (Id.)

In 2006, Walgreens began its Prescription Savings Club (“PSC”), a membership program 

making prescriptions available at lower costs to uninsured or underinsured customers for an annual 

fee. (Dkt. 322 ¶¶ 2, 50). Walgreens did not report the prices available to PSC members in its U&C 

pricing to the insurers. (Id. ¶ 51). Plaintiffs allege that Walgreens’ U&C pricing should have 

included the prices available to PSC members. (Id. ¶¶ 2, 51). As a result, Plaintiffs claim Walgreens 

overcharged them. (Id. ¶ 51). They have brought various state-law claims of fraud, fraudulent 

nondisclosure, and statutory consumer-protection violations against Walgreens on this basis. (See 

generally dkts. 145, 146).

OmedaRx adjudicated Walgreens’ reimbursement claims from the Cambia Plaintiffs. (Dkt. 

322 ¶¶ 41–42). When a plan member of one of the Cambia Plaintiffs used insurance to fill a 

prescription at a Walgreens pharmacy, Walgreens transmitted the reimbursement claim—listing 

the U&C price for that drug and other data about the transaction—to OmedaRx. (Id. ¶ 42). 

OmedaRx adjudicated the claim on the insurer’s behalf, evaluating the claim against the relevant 

2 The “Cambia Plaintiffs” include Cambia Health Solutions, Inc.; Asuris Northwest Health; Regence BlueShield of 

Idaho, Inc.; Regence BlueCross BlueShield of Oregon; Regence BlueCross BlueShield of Utah; and Regence 

BlueShield of Washington. (Dkt. 322 ¶ 32).

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insurance plan’s coverage and payment criteria. (Id.) OmedaRx then conveyed information about 

the claim to the insurer, received the insurer’s reimbursement payments, and remitted payment to 

Walgreens. (Id.)

Two separate sets of confidential contracts governed the relationship between the Cambia 

Plaintiffs and Walgreens: (1) Walgreens’ contracts with OmedaRx (directly or with subcontractor 

PBMs);

3 and (2) OmedaRx’s contracts with the Cambia Plaintiffs. (Dkt. 322 ¶ 45). Only OmedaRx 

knew the contents of each set of contracts, including how each entity defined U&C pricing. (Id. ¶ 

46). Walgreens’ contracts with OmedaRx excluded the PSC and other savings-program or 

discount-card prices from its U&C pricing definition. (Id. ¶¶ 48–49, 52). Section 1.11 of the 2009 

Agreement between them stated:

Customary Charge (“U/C”) is the lowest price the Pharmacy would charge to a 

cash-paying customer with no insurance for an identical pharmaceutical good or 

service on the date and at the location that the prescription is dispensed. This 

includes sales, specials, “loss leaders,” and promotional prices set by the Pharmacy. 

This excludes the Prescription Savings Club, a discounted prescription buying 

program for individuals who have no prescription drug coverage or any other type 

of program requiring a membership fee to participate.

(Id. ¶ 52 (emphasis added)). Similarly, Section 1.13 of the 2012 Agreement between them stated:

Usual and Customary (“U/C”) means the amount charged to a customer paying cash 

for prescription, with no additional prescription coverage, by the dispensing 

pharmacy at the time of dispensing, exclusive of sales tax or other discounts 

claimed. This also excludes the Prescription Savings Club, a discounted 

prescription buying program for individuals who have no prescription drug 

coverage or any other type of program requiring a membership fee to participate.

(Id. ¶ 53 (emphasis added)).

OmedaRx did not inform the Cambia Plaintiffs that Walgreens’ U&C definition excluded 

the PSC prices. (Id. ¶¶ 55–56). Walgreens alleges that OmedaRx knew or should have known that 

3 OmedaRx entered two direct contracts with Walgreens: one in 2009 (the “2009 Agreement”) and one in 2012 (the 

“2012 Agreement”). (Dkt. 322 ¶¶ 10–11).

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the Cambia Plaintiffs expected Walgreens’ U&C prices to include its PSC prices, when OmedaRx 

knew they did not. (Id. ¶ 56). This both contributed to the alleged harm the Cambia Plaintiffs 

suffered in reliance on their understanding of the U&C definition, as well as denied Walgreens an 

opportunity to rectify or mitigate this harm. (Id. ¶ 57).

As relevant to the jurisdictional arguments here, OmedaRx negotiated and entered a series 

of long-term contracts with Walgreens, an Illinois corporation. (Id. ¶ 38). The contracts 

contemplated OmedaRx’s ongoing transmittal of notices and reimbursement of claims to 

Walgreens’ headquarters in Illinois. (Id.) OmedaRx performed its contracts in Illinois and 

transmitted “millions of dollars in payments” to Walgreens’ headquarters in Illinois. (Id. ¶ 39). 

These payments include the allegedly fraudulent overcharges suffered by the Cambia Plaintiffs.

Additionally, whenever a customer with a health plan from one of the Cambia Plaintiffs filled a 

prescription at a Walgreens pharmacy in Illinois, OmedaRx transmitted the relevant coverage 

information and claims data to that Illinois pharmacy. (Id. ¶ 39).

Walgreens seeks contribution from OmedaRx as a joint tortfeasor if any of the Cambia 

Plaintiffs prevails against it. (Id. ¶ 3). It brings one count for contribution under Oregon law, O.R.S. 

§§ 31.600, 31.605, 31.800, and one count for contribution under Idaho law, Idaho Code § 6-803. 

(Id. ¶¶ 60–76). OmedaRx moves to dismiss the TPC under Rule 12(b)(2) and Rule 12(b)(6). (Dkt. 

370).

LEGAL STANDARD

On a Rule 12(b)(2) motion to dismiss, the Court assumes the plaintiff’s asserted facts are 

true and resolves factual disputes in its favor. Curry v. Revolution Lab’ys, LLC, 949 F.3d 385, 392 

(7th Cir. 2020) (citing uBID, Inc. v. GoDaddy Grp., Inc., 623 F.3d 421, 423–24 (7th Cir. 2010)). 

The plaintiff bears the burden of demonstrating personal jurisdiction when challenged. John 

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Crane, Inc. v. Shein L. Ctr., Ltd., 891 F.3d 692, 695 (7th Cir. 2018) (citing N. Grain Mktg., LLC 

v. Greving, 743 F.3d 487, 491 (7th Cir. 2014)). Where, as here, there has been no jurisdictional 

hearing, the plaintiff need only set forth a prima facie showing of jurisdiction. Id. The Court reads 

“the complaint liberally, in its entirety, and with every inference drawn in favor” of the plaintiff to 

decide whether a prima facie case for personal jurisdiction exists. Cent. States, Se. & Sw. Areas 

Pension Fund v. Phencorp Reins. Co., 440 F.3d 870, 877–78 (7th Cir. 2006).

Likewise, on a Rule 12(b)(6) motion to dismiss the Court accepts all well-pleaded facts as 

true and “draw[s] reasonable inferences favor of the plaintiff.” Kap Holdings, LLC v. Mar-Cone 

Appliance Parts Co., 55 F.4th 517, 523 (7th Cir. 2022). The complaint’s “short and plain statement 

of the claim showing that the pleader is entitled to relief,” Fed. R. Civ. P. 8(a)(2), must offer more 

than “labels and conclusions” or “a formulaic recitation of the elements.” Bell Atl. Corp. v. 

Twombly, 550 U.S. 544, 555 (2007). To survive a defendant’s motion to dismiss, “a complaint 

must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible 

on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570).

DISCUSSION

A. Personal Jurisdiction

“Federal courts ordinarily follow state law in determining the bounds of their jurisdiction 

over persons.” Walden v. Fiore, 571 U.S. 277, 283 (2014) (quoting Daimler AG v. Bauman, 571 

U.S. 117, 125 (2014) (citing Fed. R. Civ. P. 4(k)(1)(A))). Illinois’s long-arm statute grants 

jurisdiction over nonresidents coextensive with the federal standard for due process. 735 ILCS 

5/2-209(c); John Crane, Inc., 891 F.3d at 695. Federal due process “constrains a State’s authority 

to bind a nonresident defendant to a judgment of its courts.” Walden, 571 U.S. at 283 (citing WorldWide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980)). For this Court to exercise 

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personal jurisdiction, the nonresident defendant—here, OmedaRx—must have “minimum 

contacts” with Illinois “such that the maintenance of the suit does not offend traditional notions of 

fair play and substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal 

quotations omitted).

Personal jurisdiction may be general or specific. Rogers v. City of Hobart, 996 F.3d 812, 

818 (7th Cir. 2021). Walgreens alleges that OmedaRx, an Oregon corporation, is subject to specific 

personal jurisdiction in Illinois. (Dkt. 322 ¶ 37). This requires Walgreens to show that:

(1) the defendant has purposefully directed [its] activities at the forum state or 

purposefully availed [itself] of the privilege of conducting business in the state; 

(2) the alleged injury arises out of or relates to the defendant’s forum-related 

activities; and 

(3) any exercise of personal jurisdiction must comport with traditional notions of 

fair play and substantial justice.

Rogers v. City of Hobart, 996 F.3d 812, 819 (7th Cir. 2021).

The first prong of this test is satisfied when out-of-state defendants “purposefully ‘reach[ ] 

out beyond’ their State and into another by, for example, entering a contractual relationship that 

‘envisioned continuing and wide-reaching contacts’ in the forum States.” Walden v. Fiore, 571 

U.S. 277, 285 (2014) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 479–80 (1985)). 

Here, OmedaRx entered such a contractual relationship with Walgreens. OmedaRx purposely 

contracted with Walgreens, an Illinois company, through at least two long-term agreements to 

adjudicate prescription-reimbursement claims for the Cambia Plaintiffs’ insureds. In performing 

those contracts, OmedaRx directed payments—the alleged overcharges that injured the Cambia 

Plaintiffs—to Walgreens’ Illinois headquarters. It likewise directed “notices” about claims 

processing to Walgreens’ Illinois headquarters pursuant to those contracts. OmedaRx also sent 

claims-related information to Walgreens pharmacies in Illinois for individual transactions 

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originating there. OmedaRx purposefully availed itself of the privilege of doing business in Illinois 

through its contractual relationship with Walgreens. See Burger King Corp., 471 U.S. at 479–80.

Next, the defendant’s minimum contacts with the forum state must be “suit-related.” Curry, 

949 F.3d at 400 (citing Advanced Tactical Ordnance Sys., LLC v. Real Action Paintball, Inc., 751 

F.3d 796, 801 (2014)). “There must be a ‘connection between the forum and the specific claims at 

issue.’” Id. (citing Bristol-Myers Squibb Co. v. Sup. Ct. of Calif., 582 U.S. 255, 265 (2017)). Here, 

Walgreens claims OmedaRx is liable for contribution as a joint tortfeasor because the contractual 

relationship between them governed the allegedly fraudulent transactions at the heart of this case.

According to Walgreens, OmedaRx knew the U&C definitions in the Walgreens-OmedaRx 

contracts excluded the PSC prices. It also knew or should have known of the Cambia Plaintiffs’ 

U&C pricing expectations through their own set of confidential contracts. Under its Walgreens 

contracts, OmedaRx adjudicated and conveyed Walgreens’ reimbursement claims—based on 

fraudulent pricing—to the Cambia Plaintiffs. It then remitted (inflated) payments from the Cambia 

Plaintiffs back to Walgreens in Illinois. The Cambia Plaintiffs’ alleged injuries from Walgreens’ 

fraudulent overcharges necessarily arise from OmedaRx’s business dealings with Walgreens in 

Illinois. Without the contractual link that OmedaRx purposely established with Walgreens in 

Illinois, Walgreens could not have injured the Cambia Plaintiffs through its pricing scheme.

Finally, the exercise of jurisdiction must not offend “traditional notions of fair play and 

substantial justice.” Curry, 949 F.3d at 402 (citing Int’l Shoe, 326 at 316). When the plaintiff has 

“made a threshold showing of minimum contacts, that showing is generally defeated only where 

the defendant presents ‘a compelling case that the presence of some other considerations would 

render jurisdiction unreasonable.’” Id. (citing Burger King, 471 U.S. at 477). Here, OmedaRx has 

not provided any case—much less a compelling one—that litigating in Illinois is unfair. See id.

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(citing such relevant fairness considerations as the burden on the defendant, the forum state’s 

interest in the dispute, the plaintiff’s interest in obtaining convenient and effective relief, and 

interstate judicial economy). After all, Cambia Health Solutions—which owns OmedaRx—chose 

to sue Walgreens in Illinois for the pricing scheme. OmedaRx proclaims that it has “folded [its] 

operations into the regional health plans of Cambia Health Solutions.” (Dkt. 322 ¶ 35). It shares 

representation with the Cambia Plaintiffs. It is hardly a burden for OmedaRx to litigate in the same 

action as its parent company.

4 Moreover, judicial economy favors resolving any third-party 

defendant’s liability for the Cambia Plaintiffs’ injuries together in the same action.

In sum, the Court has specific personal jurisdiction over OmedaRx because it purposefully 

availed itself of the privilege of transacting business in Illinois, and the purported injuries in this 

case arose from OmedaRx’s contacts with the forum state.

B. Contribution Claims

1. Right of Contribution and Rule 14

Walgreens brings two counts of contribution as a joint tortfeasor against OmedaRx, one 

under Oregon law and one under Idaho law. Both states recognize a right of contribution among 

joint tortfeasors.5 OmedaRx first argues that Walgreens has brought its contribution claims too 

early. Oregon law bars the right of contribution until a joint tortfeasor has discharged the common 

liability through payment of a judgment against it. Or. Rev. Stat. § 31.810(4); Aetna Cas. Sur. Co. 

v. Or. Health Scis. Univ., 793 P.2d 320, 323–24 (Or. 1990). Similarly, under Idaho law the right 

4 Walgreens also argues that the Cambia Plaintiffs’ jurisdictional contacts with Illinois are imputed to OmedaRx 

because there is a principal-agent relationship between the entities. (See dkt. 393 at 7). Because the Court has already 

found sufficient minimum contacts exist, there is no need to reach Walgreens’ argument here.

5 Or. Rev. Stat. § 31.800(1) (“[W]here two or more persons become jointly or severally liable in tort for the same 

injury to person or property or for the same wrongful death, there is a right of contribution among them even though 

judgment has not been recovered against all or any of them. There is no right of contribution from a person who is not 

liable in tort to the claimant.”); Idaho Code § 6-803(1) (“The right of contribution exists among joint tortfeasors, but 

a joint tortfeasor is not entitled to a money judgment for contribution until he has by payment discharged the common 

liability or has paid more than his pro rata share thereof.”).

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of contribution accrues only after a joint tortfeasor has paid more than its pro rata share of a 

judgment. Idaho Code § 6-803(1); Hydraulic & Air Equip. Co. v. Mobil Oil Corp., 785 P.2d 947, 

949 (Idaho 1989).

But when state law recognizes a substantive right of contribution that may accrue in the 

future, Rule 14 accelerates the adjudication of liability amongst joint tortfeasors in federal court. 

See Fed. R. Civ. P. 14(a)(1) (“A defending party may, as third-party plaintiff, serve a summons 

and complaint on a nonparty who is or may be liable to it for all or part of the claim against it.” 

(emphasis added)).

6 True, Walgreens must first pay more than its pro rata share of judgment to the 

Cambia Plaintiffs before enforcing any judgment against OmedaRx. But the parties’ comparative 

share of liability—if any—to the Cambia Plaintiffs can be determined in the same action.7

Per Rule 14, Walgreens’ contribution claims are not procedurally barred. But Walgreens 

must show that the possibility exists for a right of contribution to accrue. At this stage, it must 

plausibly allege OmedaRx’s liability in tort to the Cambia Plaintiffs. Walgreens has pleaded three 

alternative theories of tort liability under each state’s respective laws: negligent misrepresentation, 

consumer fraud under consumer-protection statutes, and common-law fraud. (Dkt. 322 ¶¶ 63, 71). 

Each contribution count requires at least one viable theory of tort liability.

6 See also 6 Wright, Miller & Kane, Federal Practice & Procedure § 1448 (3d ed. Apr. 2022 update) (“Rule 14 allows 

litigants in federal court to seek relief against joint tortfeasors when the governing substantive law recognizes a right 

of contribution.”); id. § 1451 (“The words ‘may be liable’ mean that defendant is permitted to join someone against 

whom a cause of action has not yet accrued, provided that the claim is contingent upon the success of the plaintiff’s 

action and will accrue when defendant’s liability is determined in the main action or plaintiff’s claim is satisfied.”). 

See also Magnuson v. Fairmont Foods Co., 442 F.2d 95, 99 (7th Cir. 1971) (recognizing procedural effect of Rule 14 

permitting impleader where defendant seeks contribution from alleged joint tortfeasor and governing state substantive 

law recognizes right of contribution). 7 See 6 Wright, Miller & Kane, Federal Practice & Procedure § 1448 (“Moreover, it is not critical that state 

substantive law does not recognize a right of contribution until the original defendant has paid more than his pro rata 

share. Any judgment on the third-party claim does not become enforceable until after the common liability has been 

discharged by the original defendant. Impleader under Rule 14 merely accelerates the determination of liability and 

does not have the effect of enlarging any substantive rights.”); Andrulonis v. United States, 26 F.3d 1224, 1233 (2d 

Cir. 1994) (holding federal impleader rule permits defendant to implead a joint tortfeasor for contribution before the 

right to contribution accrues because third party may be liable to defendant for share of plaintiff’s primary judgment).

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2. Contribution Under Oregon Law (Count I)

a. Negligent Misrepresentation

Walgreens first alleges that OmedaRx is liable to the Cambia Plaintiffs for negligent 

misrepresentation under Oregon law. (Dkt. 322 ¶ 63(a)). Generally, the economic-loss doctrine 

“bars a party that has suffered a purely economic loss from bringing a negligence action against 

the party that caused the loss.” Harris v. Suniga, 180 P.3d 12, 14 (Or. 2008). Oregon law 

recognizes, however, that “under some circumstances, one may be liable for economic loss 

sustained by others who rely on one’s representations negligently made.” Onita Pac. Corp. v. Trs. 

of Bronson, 843 P.2d 890, 896 (Or. 1992). Despite recognizing the tort, Oregon has not fully 

adopted the rule stated in the Restatement (Second) of Torts § 552.8 Id. (holding that the 

Restatement “is close to the mark” but eschewing the black-letter rule in favor of developing “the 

scope of the duty and the scope of recovery on a case-by-case basis”).

When two parties have contracted with each other—as OmedaRx and the Cambia Plaintiffs 

have here—a duty must exist between them “independent of the contract and without reference to 

the specific terms of the contract” for tort liability to be imposed. Conway v. Pac. Univ., 924 P.2d 

818, 822 (Or. 1996) (en banc) (quoting Georgetown Realty, Inc. v. Home Ins. Co., 831 P.2d 7, 14 

(Or. 1992) (en banc)). In Conway v. Pacific University, the Oregon Supreme Court discussed the 

type of relationship between contracting parties that gives rise to the requisite duty: 

8 (1) One who, in the course of his business, profession or employment, or in any other transaction in which he has a 

pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject

to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to

exercise reasonable care or competence in obtaining or communicating the information.

(2) Except as stated in Subsection (3), the liability stated in Subsection (1) is limited to loss suffered

(a) by the person or one of a limited group of persons for whose benefit and guidance he intends to supply

the information or knows that the recipient intends to supply it; and

(b) through reliance upon it in a transaction that he intends the information to influence or knows that the

recipient so intends or in a substantially similar transaction . . . . 

Restatement (Second) of Torts § 552 (1977).

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In Oregon, the tort of negligent misrepresentation requires that one party in a 

relationship owe a duty ‘beyond the common law duty to exercise reasonable care 

to prevent foreseeable harm’ to the other party. Under Onita, that kind of 

heightened duty arises when one party is acting, at least in part, to further the 

economic interests of the other party. In other words, for the duty to avoid making 

negligent misrepresentations to arise, the parties must be in a “special relationship,” 

in which the party sought to be held liable had some obligation to pursue the 

interests of the other party.

924 P.2d 818, 822 (Or. 1996) (quoting Onita, 843 P.2d at 896). Whether a duty exists outside 

contractual obligations thus requires analyzing the parties’ relationship. Id. at 823. The court 

recognized that a heightened duty of care exists between, for example, lawyers and their clients, 

physicians and their patients, and—in certain cases—professionals like architects or engineers and 

their clients. Id. at 823 (collecting cases). It also noted that “[o]ther types of relationships also may 

carry a heightened duty of care,” such as “agents in a typical principal-agent relationship.” Id. at 

823 (collecting cases).

Oregon appellate courts have further distilled from Onita and Conway that a “special 

relationship” is defined by certain criteria:

(1) One party relinquishes control over matters, usually financial, and entrusts them 

to the other party; (2) The party with control is authorized to exercise independent 

judgment; (3) in order to further the other party’s interests; and (4) The relationship 

either is, or resembles, other relationships “in which the law imposes a duty on 

parties to conduct themselves reasonably, so as to protect the other parties to the 

relationship.”

Bell v. Pub. Emps. Ret. Bd., 247 P.3d 319, 326 (Or. Ct. App. 2010) (internal citations omitted); see 

also W. Prop. Holdings, LLC v. Aequitas Cap. Mgmt., Inc., 392 P.3d 770, 779 (Or. Ct. App. 2017) 

(same).

Here, to avoid the economic-loss doctrine foreclosing its negligence theory of liability, 

Walgreens must plead facts consistent with a special relationship between OmedaRx and the 

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Cambia Plaintiffs that would support the existence of a heightened duty apart from their mutual 

contractual obligations. It has not done so.

First, Walgreens claims a special relationship exists because OmedaRx “is in the business 

of supplying information to the Cambia Plaintiffs to guide them in their payment of reimbursement 

transactions.” (Dkt. 322 ¶ 63(a)(viii)). But this allegation merely recites the rule in the Restatement 

(Second) of Torts § 552(1), which the Oregon Supreme Court has held to be “close” but not the 

true test of whether a special relationship exists. Onita, 843 P.2d at 896. And on its own, it simply 

restates OmedaRx’s contractual obligation to the Cambia Plaintiffs. Oregon law requires more to 

establish a special relationship. See Conway, 924 P.2d at 822; Bell, 247 P.3d at 326. 

Walgreens relies on Lindstrand v. Transamerica Title Insurance Co., 874 P.2d 82, 85 (Or. 

Ct. App. 1994), for the proposition that OmedaRx has a duty to the Cambia Plaintiffs as a 

“nongratuitous supplier of information.” (Dkt. 393 at 11). But that case predates both Conway and 

Bell, which clarify the analysis for finding a special relationship between contracting entities. 

Walgreens also cites to a decision where this Court previously held that PBMs are in the business 

of supplying information to others and thus unprotected by the economic-loss doctrine. (Id. (citing 

Hotel Emps. & Rest. Emps. Intern. Union Welfare Fund v. Sav-Rx, 2007 WL 1423863, at *3 (N.D. 

Ill. May 10, 2007)). But that case applied Illinois law. Here, Walgreens alleges OmedaRx’s 

liability in tort under Oregon law, so Oregon caselaw defines the scope of the requisite special 

relationship.

Walgreens argues in the alternative that OmedaRx is the Cambia Plaintiff’s agent. An 

agent-principal relationship may give rise to a heightened duty of care. See Conway, 924 P.2d at 

823. OmedaRx is a wholly owned affiliate of Cambia Health Solutions, which also owns all other 

Cambia Plaintiffs. (Dkt. 322 ¶¶ 35, 41). In the TPC, Walgreens refers to the Cambia Plaintiffs as 

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OmedaRx’s “owners and principals.” (Dkt. 322 ¶ 23(b)). Walgreens also states in its opposition 

brief that OmedaRx is the Cambia Plaintiffs’ agent. (Dkt. 393 at 7, 11 n.3). But Walgreens must 

plead more than mere “labels and conclusions.” Twombly, 550 U.S. at 555. The fact that one of 

the Cambia Plaintiffs owns OmedaRx and contracted with it (as a separate corporate entity) to 

adjudicate reimbursement claims is insufficient to show a principal-agent relationship existed 

between them. This relationship says nothing of the degree of control that the Cambia Plaintiffs—

or even Cambia Health Systems, as owner—had over OmedaRx, nor the extent to which OmedaRx 

agreed to act on behalf of the Cambia Plaintiffs. See Vaughn v. First Transit, Inc., 206 P.3d 181, 

186 (Or. 2009) (en banc) (“Agency does not result, for example, when an individual (or entity) 

simply agrees to provide services for another, even if the other person—through contract—is able 

to establish general standards for performance and in that way ‘control’ the individual.”). The TPC 

lacks sufficient facts to show a principal-agent relationship existed between the Cambia Plaintiffs 

and OmedaRx.

Walgreens has not shown a special relationship existed between OmedaRx and the Cambia 

Plaintiffs beyond their mutual contractual obligations. See Conway, 924 P.2d at 822–23. It has 

failed to plead or argue any of the Bell factors for a special relationship. Bell, 247 P.3d at 326. 

Walgreens’ theory of OmedaRx’s liability to the Cambia Plaintiffs for negligent misrepresentation 

therefore fails.

b. Consumer Fraud Under Oregon Unlawful Trade Practices Act

Walgreens next argues that OmedaRx is liable to the Cambia Plaintiffs for consumer fraud 

by violating the Oregon Unlawful Trade Practices Act (OUTPA), Or. Rev. Stat. §§ 646.605, et 

seq. (Dkt. 322 ¶ 63(b)). Specifically, Walgreens claims OmedaRx violated three subsections of the 

OUTPA:

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A person engages in an unlawful practice if in the course of the person’s business, 

vocation or occupation the person does any of the following: . . . 

(j) Makes false or misleading representations of fact concerning the reasons for, 

existence of, or amounts of price reductions. . . . 

(s) Makes false or misleading representations of fact concerning the offering price 

of, or the person’s cost for real estate, goods or services. . . . 

(u) Engages in any other unfair or deceptive conduct in trade or commerce.

Or. Rev. Stat. § 646.608(1). OmedaRx argues that (1) any potential OUTPA claims are timebarred; (2) Walgreens fails to allege sufficient facts to support its claims; and (3) the TPC fails to 

meet Rule 9(b)’s heightened pleading requirement for claims sounding in fraud.

First, the statute of limitations does not foreclose Walgreens’ OUTPA theory of liability. 

The OUTPA provides a one-year statute of limitations, which begins to run “when the plaintiff 

knows or should have known of the allegedly unlawful conduct.” Or. Rev. Stat. § 646.638(6); 

Morris v. Dental Care Today, P.C., 473 P.3d 1137, 1139 (Or. Ct. App. 2020) (citing Pearson v. 

Philip Morris, Inc., 361 P.3d 3 (Or. 2015)). This statute of limitations would apply if the Cambia 

Plaintiffs were seeking to collect against OmedaRx directly. But Walgreens’ contribution claim is 

not governed by the OUTPA’s statute of limitations. The statute of limitations for contribution 

claims is two years, and it has not yet begun, much less expired. See Or. Rev. Stat. §§ 31.810(3), 

(5).

9 OmedaRx (wisely) abandoned this argument in its reply brief.

Second, OmedaRx attacks the sufficiency of Walgreens’ factual allegations under each 

subsection of the OUTPA. The Court agrees that Walgreens cannot show a violation under 

subsection 1(u), the “catch-all” subsection. The OUTPA does not allow suit under subsection 1(u)

unless “the Attorney General has first established a rule in accordance with the provisions of ORS 

9 “If there is a judgment for the injury or wrongful death against the tortfeasor seeking contribution, any separate 

action by the tortfeasor to enforce contribution must be commenced within two years after the judgment has become 

final by lapse of time for appeal or after appellate review.” Or. Rev. Stat. § 31.810(3).

“The running of the statute of limitations applicable to a claimant’s right of recovery against the tortfeasor shall not 

operate to bar recovery of contribution against the tortfeasor . . . .” Or. Rev. Stat. § 31.810(5).

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chapter 183 declaring the conduct to be unfair or deceptive in trade or commerce.” Or. Rev. Stat. 

§ 646.608(4). The TPC fails to name any applicable rule established by the Oregon Attorney 

General, and Walgreens has failed to respond to this critical deficiency. (See dkt. 411 at 11 n.2).

Walgreens has, however, sufficiently alleged plausible violations under subsections 1(j) 

and 1(s). The OUTPA defines a “representation” as “any manifestation of any assertion by words 

or conduct, including, but not limited to, a failure to disclose a fact.” Or. Rev. Stat. § 646.608(2). 

Walgreens alleges that OmedaRx knew the U&C prices in Walgreens’ reimbursement claims did 

not include the lower PSC prices available to PSC members. It failed to disclose this fact to the 

Cambia Plaintiffs. This critical omission regarding reduced prices for prescription drugs satisfies 

subsection 1(j). Likewise, OmedaRx misrepresented to the Cambia Plaintiffs the true offering price 

of Walgreens’ prescription drugs under subsection 1(s). Though OmedaRx argues that subsection 

1(s) refers only to misrepresentations of OmedaRx’s own goods or services—i.e., the overhead for 

adjudicating claims pursuant to its contracts—the statute’s language is not so restrictive. OmedaRx 

violates the OUTPA by failing to disclose “the offering price of . . . goods or services.” The statute 

does not specify that the misrepresentation must concern the defendant’s own offering price of its 

goods or services but includes goods or services generally. In the context of claims-processing 

adjudication, it follows that an intermediary could violate the OUTPA by knowingly passing along 

fraudulently inflated charges for drugs, even if that intermediary was not selling them itself.

Third, OmedaRx contends that Walgreens has not met Rule 9(b)’s heightened pleading 

standard for fraud. Claims brought in federal court under state consumer-protection statutes 

sounding in fraud must meet the pleading standard of Rule 9(b). Kearney v. Equilon Enterprises, 

LLC, 65 F. Supp. 1033, 1041 (D. Or. 2014) (citing Kearns v. Ford Motor Co., 567 F.3d 1120, 

1124–25 (9th Cir. 2009)). Walgreens agrees that the underlying claims sound in fraud and that 

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Rule 9(b) pleading standards apply. Rule 9(b) requires the plaintiff to “state with particularity the 

circumstances constituting fraud.” Pirelli Armstrong Tire Corp. Retiree Med. Benefits Tr. v. 

Walgreen Co., 631 F.3d 436, 441 (7th Cir. 2011). Doing so ordinarily involves describing the 

“‘who, what, when, where, and how’ of the fraud—‘the first paragraph of any news story.’” Id. at 

441–42 (quoting United States ex rel. Lusby v. Rolls-Royce Corp., 570 F.3d 849, 854 (7th Cir. 

2009)). But courts should not “take an overly rigid view of the formulation,” as the requisite 

information may vary depending on the case. Id. at 442 (collecting cases).

OmedaRx claims Walgreens “fails to allege both why OmedaRx committed this alleged 

fraud and how OmedaRx, rather than Walgreens, caused and benefitted from the submission of 

fraudulent U&C claims.” (Dkt. 370 at 8–9). But neither the OUTPA nor common-law fraud

requires the tortfeasor to derive a benefit from the fraudulent activity.10 OmedaRx has cited no 

legal support for its assertion that Walgreens must allege why OmedaRx committed the fraud or 

how it benefited from the scheme. It cites only to Kearney v. Equilon Enterprises, LLC, 65 F. 

Supp. 3d 1033 (D. Or. 2014), for the general Rule 9(b) pleading standard. That court dismissed 

OUTPA claims, finding the plaintiff failed to plead fraud with particularity. See id. at 1043–45 

(finding the “who” and “where” of the fraud was less than specific, the “what” was disputed and 

unclear, and the “when” was not clearly specified—only the “how” was sufficiently pleaded). 

Here, by contrast, Walgreens meets the Rule 9(b) pleading standard for fraud. The TPC 

clearly explains that OmedaRx was aware of, and facilitated through its contractual relationships,

Walgreens’ scheme to overcharge the Cambia Plaintiffs for prescription-drug reimbursements. It 

10 See Strawn v. Farmers Ins. Co. of Or., 258 P.3d 1199, 1209, adhered to on reconsideration, 256 P.3d 100 (Or. 

2011) (“The essential elements of common-law fraud are: the defendant made a material misrepresentation that was 

false; the defendant did so knowing that the representation was false; the defendant intended the plaintiff to rely on 

the misrepresentation; the plaintiff justifiably relied on the misrepresentation; and the plaintiff was damaged as a result 

of that reliance.”).

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did so throughout the contractual period as the parties’ PBM. The “first paragraph of the news 

story” is complete. This Court has likewise found the Plaintiffs’ similar allegations against 

Walgreens met the Rule 9(b) standard. See BCBSM, Inc. v. Walgreen Co., 512 F. Supp. 3d 837, 

851–52 (N.D. Ill. 2021).

Walgreens therefore has pleaded a viable theory of OmedaRx’s liability under the OUTPA, 

Or. Rev. Stat. §§ 646.608(1)(j), (s). Its contribution claim under Oregon law on that theory survives 

OmedaRx’s motion to dismiss.

c. Common-Law Fraud

Though Walgreens need only plead one viable alternative theory of tort liability to support

its Oregon contribution claim, the Court finds its common-law fraud theory also survives. In 

challenging the common-law fraud theory, OmedaRx relies entirely on its argument regarding 

Rule 9(b)’s heightened pleading standards as discussed in the OUTPA context. Walgreens’ TPC 

repeats nearly verbatim the same allegations to plead common-law fraud as stated for the OUTPA 

violations. Because the Court finds the TPC satisfies Rule 9(b) and the OUTPA theory survives,

so too does the common-law fraud theory of liability.

In sum, Walgreens has sufficiently pleaded a contribution claim under Oregon law against 

OmedaRx as a joint tortfeasor. Although its negligent-misrepresentation theory of liability fails, 

Walgreens has stated viable theories of OmedaRx’s liability to the Cambia Plaintiffs for violations 

of the OUTPA, Or. Rev. Stat. §§ 646.608(1)(j), (s), and for common-law fraud.

3. Contribution Under Idaho Law (Count II)

Although “[t]he right of contribution exists among joint tortfeasors” under Idaho law, the 

statute defines a “joint tortfeasor” as “one (1) of two (2) or more persons jointly or severally liable 

in tort for the same injury to person or property . . . .” Idaho Code §§ 6-803(1), (4). The Idaho 

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legislature has significantly restricted the operation of joint and several liability. See Idaho Dep’t 

of Labor v. Sunset Marts, Inc., 91 P.3d 1111, 1116–17 (Idaho 2004); see also Idaho Code § 6-

803(3) (limiting common-law doctrine by statute). Under Idaho law, parties can be held jointly 

and severally liable only when “acting in concert,” which means “pursuing a common plan or 

design which results in the commission of an intentional or reckless tortious act.”11 Idaho Code § 

6-803(5); see also Horner v. Sani-Top, Inc., 141 P.3d 1099, 1104 (Idaho 2006).

OmedaRx argues that Walgreens has failed to allege any facts showing a common plan or 

design between itself and OmedaRx to commit the underlying tortious acts. But Walgreens alleged 

that OmedaRx “substantially assisted or encouraged Walgreens to continue submitting allegedly 

false U&C prices by continuing to adjudicate reimbursement claims based on the allegedly false 

U&C prices.” (Dkt. 322 ¶ 23(a)). Further, OmedaRx signed contracts with Walgreens directing 

Walgreens not to report PSC or other club program prices as U&C prices. (Id.) These allegations 

plausibly describe a common plan to conceal Walgreens’ true prescription drug prices from the 

Cambia Plaintiffs. If, through its contract negotiations and discussions about U&C pricing, 

OmedaRx directed Walgreens to exclude the PSC prices, then it clearly acted in concert with 

Walgreens to conceal the true price from the Cambia Plaintiffs. Notably, however, Walgreens will 

bear the burden of proof at a later stage to show the existence of a common plan between itself and 

OmedaRx to prevail on its contribution claim under Idaho law.12

11 A party may also be held jointly and severally liable when it acts as an agent of another tortfeasor. Idaho Code § 6-

803(5). But this is not relevant here, as Walgreens does not allege that OmedaRx was Walgreens’ agent in committing 

the acts that led to the Cambia Plaintiffs’ injury.

12 Walgreens cursorily suggests that “[e]ven if Walgreens and [OmedaRx] are not jointly and severally liable under 

Idaho law, they may be under the law of some other state.” (Dkt. 393 at 15). But Idaho’s contribution statute is clear—

the right of contribution exists among joint tortfeasors; joint tortfeasors are limited to those jointly and severally liable; 

joint and several liability is limited to causes of action within the statute’s subsection (5), which dictates joint and 

several liability applies only when the tortfeasors are “acting in concert” or as an agent of another. §§ 6-803(1), (3), 

(4), (5). There can be no right of contribution under Idaho law unless Walgreens satisfies all statutory elements.

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Alternatively, OmedaRx asserts—without support—that Walgreens has failed to allege 

that OmedaRx’s actions proximately caused the Cambia Plaintiffs’ injuries. For a right to 

contribution to accrue, the wrongful conduct of each tortfeasor must be “a proximate cause of an 

indivisible injury.” Athay v. Stacey, 128 P.3d 897, 907 (Idaho 2005). Along with being 

underdeveloped, this argument makes no sense. The TPC explains that OmedaRx was the critical 

link between Walgreens and the Cambia Plaintiffs. It knew Walgreens did not include its PSC 

prices in the U&C pricing. It also knew or should have known the Cambia Plaintiffs’ understanding 

of the U&C definition yet failed to disclose Walgreens’ true prescription prices. It knowingly 

adjudicated claims for fraudulently inflated prescription reimbursements, causing the Cambia 

Plaintiffs to pay overcharged prices. OmedaRx, thus, proximately caused the Cambia Plaintiffs’ 

injury.

OmedaRx does not challenge the sufficiency of any of Walgreens’ three alternative 

theories of OmedaRx’s liability in tort to the Cambia Plaintiffs under Idaho law. Walgreens’

second contribution count against OmedaRx as a joint tortfeasor thus survives the motion to 

dismiss.

CONCLUSION

The Court denies OmedaRx’s Motion to Dismiss Walgreens’ Third-Party Complaint under 

Rule 12(b)(2) and Rule 12(b)(6).

____________________________________

Virginia M. Kendall

United States District Judge

Date: May 23, 2023

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