UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

BCBSM, INC., et al., 

Plaintiffs / Counter-Defendants, 

v. 

WALGREEN CO.,

Defendant / Counterclaimant,

and

WALGREENS BOOTS ALLIANCE, INC.,

Defendant.

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Case No. 1:20-cv-01853

Honorable Virginia M. Kendall

Honorable Sheila M. Finnegan

Consolidated with:

No. 1:20-cv-01929

No. 1:20-cv-03332

No. 1:20-cv-04738

No. 1:20-cv-04940

No. 1:22-cv-01362

WALGREEN CO. & WALGREENS 

BOOTS ALLIANCE, INC.,

Third-Party Plaintiffs,

v.

PRIME THERAPEUTICS LLC,

Third-Party Defendant.

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DEFENDANTS’ OPPOSITION TO 

PLAINTIFFS’ MOTION TO SEVER & STAY COUNTERCLAIM

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TABLE OF CONTENTS

TABLE OF AUTHORITIES ........................................................................................................i 

BACKGROUND ........................................................................................................................... 3

ARGUMENT ................................................................................................................................. 6

I. The Court Should Not Sever Walgreens’ Counterclaim......................................... 6

A. The Counterclaim and Plaintiffs’ Claims Share Numerous Common

Issues. .......................................................................................................... 6

B. The Counterclaim Has Already Facilitated Settlement; Severing Would

Not Promote Judicial Economy. ................................................................. 8

C. Severing Will Increase, Not Avoid, the Chance of Undue Prejudice. ...... 10

D. The Counterclaim and Plaintiffs’ Case Involve Overlapping Evidence. .. 12

E. The Counterclaim Arises from the Same Transactions and Occurrences as

Plaintiffs’ Claims. ..................................................................................... 13

II. The Court Should not Stay the Counterclaim ....................................................... 14

CONCLUSION ........................................................................................................................... 15

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-iTABLE OF AUTHORITIES

Page(s)

Cases

BCBSM, Inc. v. Walgreen Co.,

512 F. Supp. 3d 837 (N.D. Ill. 2021).................................................................................4, 6, 8

Benitez v. Am. Standard Circuits, Inc.,

678 F. Supp. 2d 745 (N.D. Ill. 2010).......................................................................................13

Compania Embotelladora del Pacifico v. Pepsi Cola Co.,

256 F.R.D. 131 (S.D.N.Y. 2009) ...............................................................................................8

Davis v. Packer Eng’g,

2016 WL 11689521 (N.D. Ill. Nov. 14, 2016) ........................................................................11

EDCare Mgmt., Inc. v. DeLisi,

50 A.3d 448 (D.C. Ct. App. 2012)...........................................................................................10

Gaffney v. Riverboat Servs. of Ind., Inc.,

451 F.3d 424 (7th Cir. 2006) ...................................................................................................14

Kimmel v. Cavalry Portfolio Servs., LLC,

747 F. Supp. 2d 427 (E.D. Pa. 2010).........................................................................................8

Pfizer Inc. v. Apotex Inc.,

640 F. Supp. 2d 1006 (N.D. Ill. 2009).....................................................................................14

Preston v. Wiegand,

2021 WL 5447039 (N.D. Ill. Nov. 22, 2021) ....................................................................11, 13

Schulke v. Stryker Othopaedics,

2016 WL 3059114 (N.D. Ill. May 31, 2016).............................................................................9

United Mine Workers v. Gibbs,

383 U.S. 715 (1966)...............................................................................................................3, 6

United States ex rel. Proctor v. Safeway, Inc.,

30 F.4th 649 (7th Cir. 2022) ..............................................................................................1, 6, 7

United States ex rel. Schutte v. Supervalu Inc.,

9 F.4th 455 (7th Cir. 2021) ................................................................................................1, 6, 7

White v. Coventry Health Care, Inc.,

2018 WL 1469025 (N.D. Ill. Mar. 26, 2018)...........................................................................13

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-iiOther Authorities

Fed. R. Civ. P. Rule 30 ..................................................................................................................11

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In Plaintiffs’ operative Complaint, Plaintiffs placed at the very center of this case what 

Walgreen Co. (“Walgreens”) knew about the definition of usual and customary (“U&C”) pricing 

and when Walgreens knew it. Plaintiffs’ fraud claims and Walgreens’ defenses to those claims 

pivot on Walgreens’ knowledge and intent about the meaning of U&C as it relates to Walgreens’ 

Prescription Savings Club (“PSC”) and other special pricing initiatives. As the Court knows, in 

2008 and 2009 when Walgreens was rolling out PSC nationwide, Walgreens hired Plaintiffs’ laterengaged lead counsel, Crowell & Moring LLP (“Crowell”), for advice on this central issue. 

Crowell’s work on U&C issues for Walgreens, indeed the very fact that Walgreens sought such 

advice, is germane to Plaintiffs’ case and to Walgreens’ defenses. Under the Seventh Circuit’s 

recent U&C-focused decisions in Schutte and Proctor,

1 if Walgreens subjectively believed it could 

properly omit PSC prices from U&C, that fact is critical to the resolution of Plaintiffs’ claims. 

Walgreens’ communications to Crowell related to the firm’s U&C-focused legal advice offer key, 

contemporaneous evidence of Walgreens’ subjective beliefs. And Crowell’s advice to Walgreens 

undermines Plaintiffs’ core allegation that some industry-standard definition of U&C required 

Walgreens to report savings program or discount-card prices. The jury in Plaintiffs’ case-in-chief

must hear about Crowell’s work for Walgreens.

Unsurprisingly, the very same evidence supporting Walgreens’ defense is also essential to 

Walgreens’ counterclaim: Plaintiffs knowingly aided and abetted Crowell’s breaches of fiduciary 

duty by engaging Crowell in the face of the firm’s disloyalty to its former client and by suing 

Walgreens on the very same subject matter as Crowell’s earlier U&C advice. Walgreens’

counterclaim unquestionably arises from the same facts and circumstances as Plaintiffs’ claims, 

1 See United States ex rel. Schutte v. Supervalu Inc., 9 F.4th 455 (7th Cir. 2021); United States ex rel. 

Proctor v. Safeway, Inc., 30 F.4th 649 (7th Cir. 2022).

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making Walgreens’ aiding and abetting claim compulsory. Plaintiffs have never even seriously 

argued otherwise (nor could they). In fact, the counterclaim could have and should have been 

consolidated with Plaintiffs’ action under the Federal Rules if it had started out as a separate case. 

And Plaintiffs have been acutely aware of the situation since early 2021, both from February 2021 

communications between counsel, discussed below, and Walgreens’ long-pending defenses and 

counterclaim. Yet, Plaintiffs suddenly assert, long after Crowell’s U&C advice became an issue in 

dispute, that the case should be torn in half, with Walgreens’ closely related claim awaiting a future 

proceeding before a different jury and Walgreens’ counterclaim discovery delayed indefinitely—

despite the fact that the same requested evidence also supports Walgreens’ defenses.

Plaintiffs are demanding that the Court preside over a needless multiplicity of jury trials to 

address a purported problem of Plaintiffs’ own making. By hiring and then obdurately keeping on 

Crowell as their lead counsel in the face of Walgreens’ aiding and abetting claim, Plaintiffs sowed 

the supposed chaos they now claim, over a year later, must be avoided. But Plaintiffs’ supposed 

concerns are at best exaggerated, and severance will not even fix the purported problem because 

Crowell’s advice is squarely at issue throughout this case, not just as it relates to Walgreens’ 

counterclaim. Plaintiffs could have fixed their own contrived mess by hiring additional trial 

counsel—such as Stein Mitchell, a firm that is already in this case representing the new CareFirst 

Plaintiffs, has taken U&C cases to trial, and works hand-in-hand with Crowell in other U&C 

disputes, including as co-counsel suing Walgreens for another insurer. Instead, Plaintiffs engaged 

yet another firm, Holland & Knight, to deal only with the counterclaim, artificially emphasizing

and magnifying false distinctions between Plaintiffs’ claims and Walgreens’ counterclaim, which 

are in truth intertwined and arise from the same facts and circumstances. Plaintiffs get to choose 

their counsel, but Plaintiffs’ baroque procedural strategy is no excuse for refusing to engage in 

discovery or for needlessly splitting this case into two—all after the Court consolidated dozens of 

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Plaintiffs’ claims arising under different states’ laws.

Remarkably, Plaintiffs assert that their own choice of lawyers and their desire to avoid the 

(completely accurate) appearance of an ethical conflict somehow trump Walgreens’ and this 

Court’s basic interest in having a single fact-finder consider in one trial the same evidence that 

supports Walgreens’ defenses and counterclaim. The Rules “strongly encourage[]” joinder of 

claims. United Mine Workers v. Gibbs, 383 U.S. 715, 724 (1966). Contrary to this Supreme Court 

guidance, severing Walgreens’ counterclaim would be an imprudent and improper waste of 

judicial and jury resources. Doing so would lead to duplicative trials and the potential for 

inconsistent outcomes on the same issues. It would extend by months, at the very least, an already 

lengthy, complex, and costly proceeding. Regardless of Walgreens’ compulsory counterclaim, the 

fact of Crowell’s U&C advice to Walgreens will be presented to the jury if this case reaches trial.

Thus, the purported prejudice that Plaintiffs seek to avoid will not even be reduced by severing 

Walgreens’ counterclaim. With or without the counterclaim, Plaintiffs’ jury will hear that the same 

law firm now suing Walgreens once represented the company and provided it with advice on the 

same topics at issue in this case. Neither logic nor the law supports Plaintiffs’ approach, which is 

cumbersome, wasteful, and unfair to Walgreens, to the Court, and to an unnecessary second jury. 

BACKGROUND

Walgreens piloted PSC in April 2006 and launched it nationwide in 2008. See Countercl., 

Dkt. 148, at ¶ 54. Also in 2008, Walgreens retained Crowell to provide legal advice on how PSC 

prices might affect the U&C prices that Walgreens submits to private third-party payors like 

Plaintiffs. See id. ¶¶ 55-56. Walgreens provided Crowell with privileged and confidential 

information about PSC and other similar programs and Walgreens’ understanding of and questions 

about their effect on U&C prices. See id. ¶¶ 55, 58. Between 2008 and 2009, Crowell repeatedly 

provided Walgreens with legal advice on PSC and U&C. Id. ¶¶ 55-67.

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On March 18, 2020, Crowell sued Walgreens on behalf of sixteen Blue Cross and Blue 

Shield–affiliated insurers asserting claims related to Walgreens’ U&C price-reporting practices—

the same subject of Crowell’s previous legal advice. See Dkt. 1. Over the next five months, Crowell 

filed similar complaints against Walgreens on behalf of four other groups of Blue Cross and Blue 

Shield–affiliated insurers. See BCBSM, Inc. v. Walgreen Co., 512 F. Supp. 3d 837, 845-46 (N.D. 

Ill. 2021). The Court consolidated all of the actions; on June 28, 2021, Crowell filed a Second 

Amended Complaint on behalf of twenty-nine health insurers (“Plaintiffs”), see Dkt. 146, accusing 

Walgreens of a decade-and-a-half-long scheme that Plaintiffs somehow just discovered, see id.

¶¶ 103, 115—despite a highly publicized 2017 case in this District alleging identical conduct by 

Walgreens (Forth v. Walgreen Co., No. 1:17-cv-2246).

When Walgreens’ counsel learned of Crowell’s previous legal advice, they promptly 

informed Crowell that “it would be inappropriate for Crowell to continue as Plaintiffs’ counsel.” 

Feb. 25, 2021, Ltr. from J. Bushofsky, Dkt. 159-2, Ex. 13, at 1. Crowell brushed aside Walgreens’ 

concerns. See Mar 1., 2021, Ltr. from T. Mason, Dkt. 159-2, Ex. 14, at 2. Walgreens’ counsel also 

advised Plaintiffs that Crowell “previously provided legal advice to Walgreens regarding [PSC], 

including the effect, if any, that prices offered to PSC members might have on Walgreens’ [U&C] 

prices.” July 8, 2021, Ltr. from J. Bushofsky, Dkt. 148-2, at 2. Plaintiffs nonetheless continued to 

retain Crowell, whose partners remain Plaintiffs’ lead trial counsel.

On July 26, 2021, Walgreens filed a counterclaim alleging that Plaintiffs are aiding and 

abetting Crowell’s fiduciary-duty breaches. See Dkt. 148. In response, Plaintiffs filed a baseless

“motion to qualify,” urging this Court—rather than the Superior Court of the District of Columbia 

(the “D.C. Court”) already considering the issue—to rule that Crowell breached no duties. See

Dkt. 158. Plaintiffs also moved to dismiss. See Dkts. 187, 192. In neither motion did Plaintiffs ask 

the Court to sever or stay the counterclaim. The Court properly denied Plaintiffs’ motion to dismiss 

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and struck their motion to qualify. See Dkt. 217. At no point did the Court suggest that discovery 

should be stayed or that the counterclaim should be severed. Following the Court’s order, BCBS 

of Nebraska proposed to dismiss its claims in exchange for dismissal of Walgreens’ counterclaim

against it. The parties later filed a joint stipulation of dismissal. See Dkt. 292. 

After the Court denied Plaintiffs’ motions attacking the counterclaim, the parties submitted 

a Proposed Revised Discovery Schedule. See Dkt. 219. Plaintiffs noted that they were “considering 

the implications of the Court’s” ruling, and they “reserve[d] the right to revisit the discovery 

schedule in the event circumstances change significantly,” including if they “retain[ed] separate 

counsel to assist in their defense of the counterclaim or if a motion to sever/stay the counterclaim 

is filed.” Id. at 1-2. But Plaintiffs did not file such a motion. Two months later, after the CareFirst

Plaintiffs filed and the Court consolidated their claims, Plaintiffs’ separate counterclaim counsel 

(along with Crowell) signed and submitted another scheduling proposal. See Dkt. 255. That 

proposal merely extended all deadlines by a month; it made no mention of a possible motion to 

sever or stay. See id. On June 7, 2022, Plaintiffs finally filed the instant Motion, Dkt. 286 (“Mot.” 

or “Motion”)—fully 16 months after Walgreens first placed Crowell’s conflict at issue in this case.

In the meantime, after the Court denied their motion to dismiss, Plaintiffs essentially 

granted themselves a discovery stay. Walgreens served discovery requests related to the 

counterclaim, Plaintiffs’ claims, and Walgreens’ defenses on November 3, 2021. Plaintiffs finally 

responded to those requests, albeit inadequately, on April 15, 2022. In so doing, Plaintiffs refused 

even to identify the “person or persons . . . responsible for managing relationships with . . . outside 

counsel involved” in this case. Ex. A at 2.2 Through June 30, 2022, Plaintiffs’ counterclaim counsel 

2 The discovery responses attached here are representative of the other Plaintiffs’ responses.

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had not produced a single document in response to Walgreens’ November 2021 requests.3

Nonetheless, Plaintiffs now cynically assert that counterclaim discovery (not Plaintiffs’ own 

dilatory conduct) will somehow unduly delay the case and “detract from the expeditious and 

efficient pursuit of Plaintiffs’ claims.” Mot. at 13-14. Plaintiffs’ Motion is entirely without merit.

ARGUMENT

The Federal Rules of Civil Procedure “strongly encourage[]” joinder of claims. Gibbs, 383 

U.S. at 724. Consistent with that “impulse [ ] toward entertaining the broadest possible scope of 

action,” id., the Court should deny Plaintiffs’ Motion. Walgreens’ counterclaim, Plaintiffs’ claims, 

and Walgreens’ defenses all share overlapping facts, legal issues, witnesses, and evidence. All 

claims and defenses should be heard by the same jury at the same time. 

I. THE COURT SHOULD NOT SEVER WALGREENS’ COUNTERCLAIM

Plaintiffs offer a five-factor test to govern the Court’s exercise of its discretion to sever. 

See Mot. at 9. Because the claims and counterclaim are not “discrete and separate,” however, each 

of the five factors favors Walgreens’ position against severing the case. Id. (citation omitted).

A. The Counterclaim and Plaintiffs’ Claims Share Numerous Common Issues.

Even Plaintiffs’ superficial description of the claims and counterclaim demonstrate that

their factual and legal premises overlap. See Mot. at 4-5, 10. Plaintiffs accuse Walgreens of fraud, 

see Compl. ¶¶ 119-39; thus, Plaintiffs must prove, among other elements, that Walgreens 

knowingly made false statements. See BCBSM, 512 F. Supp. 3d at 850 (elements of Plaintiffs’ 

fraud claims). Under recent binding precedent, the scienter element of Plaintiffs’ claims is key. In 

Schutte and Proctor, the Seventh Circuit emphasized that “the U&C price definition is open to 

3 Plaintiffs’ unilateral refusal to provide discovery supporting Walgreens’ defenses and counterclaim is in 

line with Plaintiffs’ general approach. By June 30, 2022, Walgreens had produced 150,312 documents and 

843,436 pages. In contrast, the twenty-eight Plaintiffs remaining in the case collectively produced only 

2,705 documents and 35,388 pages. Plaintiffs produced 1,046 documents, consisting of 21,876 pages, after 

the close of business on Friday, July 1, 2022. Walgreens continues to review that production.

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multiple interpretations” so it would not be objectively “inconsistent with the text of the U&C 

price definition” to exclude from U&C a special price offered only to select customers. See Schutte, 

9 F.4th at 468-70; Proctor, 30 F.4th at 659-60 (“an interpretation of U&C that excludes discounted 

prices available only to program participants is not inconsistent with the text of the U&C price 

definition”) (cleaned up). Under Schutte and Proctor, Walgreens’ consistent interpretation of

U&C, informed by its communications with Crowell, was objectively reasonable as a matter of 

law. Accordingly, Plaintiffs must establish that Walgreens knew that its U&C interpretation, while 

objectively reasonable, was in fact false to prove fraud.

That same issue—what Walgreens knew and believed about its U&C-related obligations—

is also at the heart of the counterclaim. As Plaintiffs concede, the key questions in the counterclaim 

are (1) whether Crowell breached its fiduciary duties to Walgreens by taking positions adverse to 

Walgreens in a matter substantially related to earlier advice; and (2) whether Plaintiffs knowingly 

aided and abetted Crowell’s breaches. See Mot. at 4-5 To answer those questions, the jury will 

have to consider what privileged and confidential information Walgreens gave Crowell, what 

questions Walgreens asked about its U&C reporting obligations, and how Crowell responded.4

Counterclaim-related facts are also relevant to Walgreens’ other key defenses:

• Whether Walgreens made false statements: Plaintiffs contend that Walgreens violated an 

industry-standard definition of U&C. See, e.g., Compl. ¶ 66. Walgreens disagrees. See, 

e.g., Defs.’ Mot. to Dismiss, Dkt. 52, at 12-13. The advice that Crowell, a leading 

healthcare firm, provided to Walgreens at the start of the PSC program is highly relevant 

to whether an industry-standard definition of U&C even existed and, if so, what it was.

4 Walgreens does not currently intend to assert a broad advice of counsel defense waiving privilege as to 

advice from non-Crowell lawyers. Rather, Walgreens will introduce Crowell’s advice for the limited 

purpose of demonstrating whether an industry-standard definition of U&C exists (or did at the time of the 

2008 PSC rollout) and what Walgreens knew about any such standard—from Crowell or otherwise. This is 

consistent with the D.C. Court’s orders regarding Walgreens’ narrow implied waiver in the D.C. Litigation. 

There, the court held that, although Walgreens had impliedly waived the privilege over Crowell’s advice 

by suing Crowell for breaching its fiduciary duties, it had not waived privilege more broadly. 

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• Statute of limitations: To determine if Plaintiffs’ claims are timely—an issue the Court 

noted Plaintiffs “may have to contend with . . . later in the case,” BCBSM, 512 F. Supp. 3d 

at 859—a jury will consider when Plaintiffs were put on notice of their claims, including 

through any communications with Crowell. Those same communications could

demonstrate when Plaintiffs learned of Crowell’s fiduciary-duty breaches. 

• Reasonable reliance and related defenses: What Crowell communicated to Plaintiffs about 

its previous representation of Walgreens and Walgreens’ U&C pricing practices will 

inform not only the scope of Crowell’s previous representation, but also whether Plaintiffs 

reasonably relied on Walgreens’ U&C prices and whether Plaintiffs’ claims are barred by 

the voluntary payment doctrine, acquiescence, ratification, or other affirmative defenses.

In these circumstances, when a claim and counterclaim “will require overlapping if not identical

proof,” Compania Embotelladora del Pacifico v. Pepsi Cola Co., 256 F.R.D. 131, 133 (S.D.N.Y. 

2009), such that “there is a likelihood that many issues . . . will be relevant to both” the claim and 

counterclaim, Kimmel v. Cavalry Portfolio Servs., LLC, 747 F. Supp. 2d 427, 435 (E.D. Pa. 2010), 

federal courts routinely decline to sever the counterclaim. This Court should do the same. 

B. The Counterclaim Has Already Facilitated Settlement; Severing Would Not 

Promote Judicial Economy.

In their rush to argue about judicial efficiency, Plaintiffs ignore whether severing the 

counterclaim will facilitate settlement. It will not. See Mot. at 9 (stating test); id. at 10-11 (ignoring 

it). Plaintiffs have a good reason to whistle past the issue: Plaintiffs know that the settlement factor

strongly favors trying the claims and counterclaim together. In fact, the counterclaim has already

facilitated settlement: Plaintiff BCBS of Nebraska voluntarily dismissed its claims against 

Walgreens with prejudice in exchange for Walgreens voluntarily dismissing its counterclaim, once 

it survived Plaintiffs’ motion to dismiss. See Dkt. 292. Severing and staying the counterclaim will 

needlessly discourage similar settlements. 

Plaintiffs’ other arguments about judicial economy lack merit. Plaintiffs argue that this 

Court should defer to the D.C. Court because “judicial economy is not well-served by having two 

[factfinders] presiding over the same issues at the same time.” Mot. at 11. But if the Court severs 

the counterclaim, two different juries in this Court will be forced to decide highly related issues of 

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law and fact. See Part I.A. Requiring two separate juries is a waste of resources and an invitation 

to inconsistent findings on the same issues. Schulke v. Stryker Othopaedics, 2016 WL 3059114, at 

*3 (N.D. Ill. May 31, 2016) (severance denied due to “risk of inconsistent judgments”).

Plaintiffs also complain that the claims “are themselves expansive in scope” and require 

extensive and inefficient discovery. Mot. at 10. Plaintiffs ignore that the same discovery and 

evidence supporting the counterclaim also support Walgreens’ defenses. See Parts I.A, I.D. 

Severing the counterclaim will make this litigation doubly inefficient because the parties will be 

required to conduct the same discovery and present the same evidence twice. See Schulke, 2016 

WL 3059114, at *3 (“overlap between [ ] two cases” would force plaintiff to “double its efforts”). 

Moreover, if the case’s scope and discovery’s progress is inefficient, that is a problem of Plaintiffs’ 

own making. Plaintiffs serially filed and then consolidated five separate suits with nineteen

separate claims based on dozens of states’ laws and alleged conduct that took place beginning a 

decade and a half ago, and Plaintiffs—not Walgreens—have dragged their feet in discovery. See

Statement of Facts. Plaintiffs cannot use their own litigation tactics to prevent Walgreens from

presenting highly related counterclaim evidence to the same jury hearing Plaintiffs’ fraud claims 

and Walgreens’ defenses. Contra Mot. at 10-11. Nor should Plaintiffs be heard to complain that 

counterclaim discovery will be “complex.” Id. at 10. If discovery requires Plaintiffs to create 

“various walls to prevent different parties and counsel from viewing particular documents,” id. at 

11, that is only because Plaintiffs’ chosen firm breached its fiduciary duties to Walgreens.

Finally, putting aside that Plaintiffs previously argued that “this Court is the only court 

empowered to decide” the ethical breaches underlying the counterclaim, Pls.’ Opp. to Mot. to 

Strike, Dkt. 183, at 12, severing the counterclaim in favor of the D.C. Litigation will not promote 

judicial efficiency. Because the claims and counterclaim significantly overlap, if the claims and 

counterclaim are severed, the Court will inevitably be forced to expend time and resources 

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enforcing a false dichotomy between claim and counterclaim evidence and discovery. See also

Part II. Moreover, the D.C. Litigation will not necessarily resolve the counterclaim here.

5

Crowell’s fiduciary duty breach is just one element of Walgreens’ aiding and abetting claim. See 

Dkt. 217 at 16-17. If Walgreens prevails in the D.C. Litigation, this Court will still need to decide 

whether and when Plaintiffs knew about Crowell’s breach. 

C. Severing Will Increase, Not Avoid, the Chance of Undue Prejudice.

Plaintiffs assert they “should have their claims against Walgreens decided on the merits,” 

Mot. at 11-12, but they argue that the counterclaim evidence will cause prejudice by distracting

the jury. Plaintiffs put the cart before the horse. The counterclaim is inextricably intertwined with 

the merits of Plaintiffs’ claims and Walgreens’ defenses. A trial that excludes evidence about 

Walgreens’ U&C interpretation, including as reflected in Walgreens’ 2008 and 2009 interactions 

with Crowell, necessarily deprives Walgreens of a defense as well as a counterclaim. To decide 

Plaintiffs’ claims and Walgreens’ defenses “on the merits,” id., the jury must hear evidence about 

what Walgreens knew about PSC’s effect on U&C pricing when Crowell was advising the 

company during a critical period that Plaintiffs have put at issue in this case. The jury must also 

learn whether an industry-standard U&C definition even existed and when Plaintiffs discovered 

Walgreens’ alleged U&C pricing practices. That is the same evidence the jury must consider to 

decide the counterclaim. Granting Plaintiffs’ motion to sever (and providing the additional 

evidentiary restrictions on Walgreens’ defense that Plaintiffs imply are necessary) will foster

undue prejudice, against Walgreens, not avoid it.

5 Plaintiffs suggest, hypocritically, that the D.C. Litigation will prevent Walgreens from relitigating 

Crowell’s fiduciary duty breaches—but only if Crowell prevails in the D.C. Court. See Mot. at 11. In this 

case’s unique circumstances, however, issue preclusion runs both ways, if it applies: because of the “preexisting substantive legal relationship” between Plaintiffs and Crowell, Plaintiffs will be equally bound if 

the D.C. Court rules in Walgreens’ favor. See, e.g., EDCare Mgmt., Inc. v. DeLisi, 50 A.3d 448, 451 (D.C. 

Ct. App. 2012) (citing Taylor v. Sturgell, 553 U.S. 880, 894 (2008)). 

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Plaintiffs’ cynical assertions about discovery problems and the advocate-witness rule also 

fail to establish undue prejudice or support a radical, wasteful division of this case into two 

proceedings. Plaintiffs’ hypocrisy is striking. Walgreens’ counsel first advised Plaintiffs and 

Crowell a year-and-a-half ago, that Crowell’s continued representation could lead to the same 

practical and ethical concerns that Plaintiffs breathlessly raise now as if they just came up: 

Frankly, we also cannot imagine that Plaintiffs themselves would permit 

Crowell to proceed as lead counsel in a potential jury trial where 

(1) Crowell’s own legal advice to Walgreens might be placed at issue and 

(2) current and former Crowell lawyers may be key witnesses testifying 

about Crowell’s advice to Walgreens[.] 

Feb. 25, 2021, Ltr. from J. Bushofsky, Dkt. 159-2, Ex. 13, at 1-2. In its response at the time, 

Crowell dismissed Walgreens’ concerns and claimed that the advocate-witness rule was irrelevant 

to this case. Mar. 1, 2021, Ltr. from T. Mason, Dkt. 159-2, Ex. 14, at 2. Now Plaintiffs presume

that Crowell attorneys will somehow be key witnesses, and they ask the Court to sever the 

counterclaim as a result. See Mot. at 11-12. However, as it turns out, none of the Crowell lawyers 

representing Plaintiffs in this litigation advised Walgreens in 2008 and 2009 (those lawyers have 

mostly moved on or are deceased), and any Crowell witness testifying regarding the firm’s prior 

representation of Walgreens, whether or not designated pursuant to Rule 30(b)(6), can and should 

be a non-member of the Plaintiffs’ trial team. More than a year after Walgreens brought it up as a 

potential issue, the advocate-witness rule is not implicated here.

In addition, the Court can minimize any conceivable prejudice to Plaintiffs by issuing

limiting instructions and implementing routine case-management procedures. See Preston v. 

Wiegand, 2021 WL 5447039, at *4 (N.D. Ill. Nov. 22, 2021) (court is “capable of distinguishing 

the evidence” relevant to one claim from evidence relevant only to another); Davis v. Packer 

Eng’g, 2016 WL 11689521, at *4 (N.D. Ill. Nov. 14, 2016) (prejudice in non-severed trial can be 

avoided by carefully instructing “jury . . . about what evidence may and may not be taken into 

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account with respect to each . . . claim[]”). For example, Plaintiffs fret that, if the claim and 

counterclaim proceed together, Walgreens will examine Crowell’s time records, which may reveal 

Plaintiffs’ legal strategy. See Mot. at 6-7. But the parties can work together with the Court’s 

guidance to avoid whatever vague concerns Plaintiffs supposedly have about such issues through 

redactions, motions in limine, limiting instructions, and other ordinary devices short of doubling 

the number of trials and juries. The Court need not take the drastic step of severing the case to save 

Plaintiffs from nebulous and hypothetical risks that Plaintiffs themselves caused. 

D. The Counterclaim and Plaintiffs’ Case Involve Overlapping Evidence.

Plaintiffs baldly assert that the claims and counterclaim “will require entirely separate 

evidence and witnesses.” Mot. at 12. Not true. Indeed, Plaintiffs’ own description of the likely

proofs undermines their argument. Plaintiffs concede that, to prove their claims, Plaintiffs will 

need to present evidence and witnesses “to establish the parties’ knowledge with respect to” 

Walgreens’ price-reporting practices. Id. at 13. Plaintiffs also concede that, to prove its 

counterclaim, Walgreens will need to present evidence and witnesses to establish “the scope of” 

Crowell’s representation of Walgreens and “the information provided” as part of that attorneyclient relationship. Id. But Plaintiffs ignore that those witnesses and that evidence are the same. 

As described above, see Part I.A, the evidence demonstrating what privileged and 

confidential information Walgreens provided Crowell will be relevant both to the scope of their 

attorney-client relationship and what Walgreens knew and believed about PSC during the 

program’s formative days. The same evidence demonstrating what legal advice Crowell and its 

industry-leading healthcare lawyers gave Walgreens will be relevant both to the scope of their 

attorney-client relationship and to the existence and content of Plaintiffs’ asserted industrystandard U&C definition, as well as Walgreens’ knowledge of it. The same witnesses who are 

competent to testify about Plaintiffs’ knowledge of Crowell’s representation of Walgreens are 

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likely also informed about Plaintiffs’ initial notice (including from Crowell) of their claims.

If the claims, defenses, and counterclaim continue together, the jury will evaluate this 

evidence and hear these witnesses once, with full context; if the counterclaim is severed, the parties 

will duplicate efforts, presenting the same evidence and witnesses to a second jury at a separate 

trial, divorced from the broader relevant context. The Court should avoid that inefficiency. Benitez 

v. Am. Standard Circuits, Inc., 678 F. Supp. 2d 745, 768-71 (N.D. Ill. 2010) (inefficient to require 

“two separate triers of fact to consider largely [the] same evidence”). 

E. The Counterclaim Arises from the Same Transactions and Occurrences as 

Plaintiffs’ Claims.

Plaintiffs misconstrue the transaction or occurrence test and oversimplify their claim to 

avoid the reality of their own pleading. Claims arise out of the same transaction or occurrence if 

they share a “logical relationship.” White v. Coventry Health Care, Inc., 2018 WL 1469024, at *2 

(N.D. Ill. Mar. 26, 2018) (citation omitted). To determine whether claims are logically related, 

courts consider “whether the alleged conduct occurred during the same general time period, 

involved the same people and similar conduct, and implicated a system of decision-making or

widely-held policy.” Id. (cleaned up); see Preston, 2021 WL 5447039, at *3-4 (individual civilrights claims arose out of same transaction or occurrence even though department fired plaintiffs 

at different times under different circumstances). Ignoring the authorities, Plaintiffs suggest that 

the test is met only if the underlying overlapping facts reflect identical events happening at 

precisely the same time—a position that defies experience and the law. See Mot. at 9-10. Setting 

aside that Plaintiffs’ case stretches back to 2006 and expressly seeks damages for the 2008 and 

2009 period when Crowell was advising Walgreens on issues central to Plaintiffs’ fraud theory, 

Plaintiffs’ interpretation of the transaction or occurrence test has no legal basis. Plaintiffs provide 

no support for their narrow interpretation, see id., and none exists. 

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Because Plaintiffs’ claims and Walgreens’ counterclaim are logically related, they fully 

satisfy the transaction or occurrence test. First, the relevant facts do overlap and occurred at the 

same time: Crowell provided U&C advice to Walgreens on the identical subject matter of 

Plaintiffs’ claims when Walgreens launched PSC, and Plaintiffs seek damages for the same period.

See Compl. ¶ 81; Countercl. ¶¶ 9, 54-67. The fact that Plaintiffs’ allegations cover a broader time 

period than the counterclaim does not mean that the conduct at issue does not overlap; it does.

Second, the claims and counterclaim involve identical conduct: Walgreens’ U&C reporting with 

respect to PSC. Compare Countercl. ¶¶ 8, 55-59, with, e.g., Compl. ¶ 1. Third, the counterclaim 

implicates the advice Crowell provided Walgreens regarding its U&C reporting—the same issue 

at the core of Plaintiffs’ claims. Compare Countercl. ¶¶ 8, 55-59, with, e.g., Compl. ¶ 1.

II. THE COURT SHOULD NOT STAY THE COUNTERCLAIM

If the case is severed, which it should not be, there is no good reason to delay Walgreens’ 

case against the Plaintiffs. Walgreens can prevail on its aiding and abetting claim regardless of the 

result of Plaintiffs’ claims.6 And, as Plaintiffs’ own authority holds, pending litigation should 

rarely be stayed, and only then in cases of extreme hardship. See Pfizer Inc. v. Apotex Inc., 640 F. 

Supp. 2d 1006, 1007 (N.D. Ill. 2009) (Mot. at 12). Any conceivable prejudice to Plaintiffs can 

easily be mitigated or avoided altogether, and any such risk is a result of Plaintiffs’ own decision 

to retain conflicted counsel. The Court should deny the stay on these bases alone.

A stay will also complicate the issues and increase the burden on the parties and this Court.

6 Plaintiffs’ request to stay the counterclaim until their own claims are resolved is inconsistent with their 

request for severance. As Plaintiffs’ cited case demonstrates,severance is appropriate only when “one claim 

[is] capable of resolution despite the outcome of the other claim.” Gaffney v. Riverboat Servs. of Ind., Inc., 

451 F.3d 424, 442 (7th Cir. 2006) (Mot. at 8-9). If (as Plaintiffs argue in support of severance) a jury can 

resolve the counterclaim regardless of the outcome of Plaintiffs’ claims, there is no reason for the 

counterclaim and Plaintiffs’ claims to proceed sequentially. Parallel proceedings should move ahead if the 

case is severed, and a single set of discovery should be developed for all claims and defenses.

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As just one example, staying the counterclaim will require discovery on Plaintiffs’ knowledge of 

Crowell’s conflicts at a later date, duplicating ongoing discovery related to Walgreens’ defenses. 

The Court likely also will be called on to police the wholly fictional boundaries Plaintiffs now 

seek to draw between claim and counterclaim evidence. Plaintiffs have already capriciously used 

that false distinction to withhold information critical to Walgreens’ defenses.

7

Waiting for the D.C. Court will not eliminate any perceived inefficiencies. If the Court 

stays the counterclaim until the D.C. Litigation reaches judgment, Walgreens will be hindered 

from fully developing its defenses and the Court will be embroiled in disputes about imaginary 

lines between the claims and counterclaim. The Court can avoid that morass by allowing the claims 

and counterclaim to proceed together or in parallel. Plaintiffs’ concerns about “inconsistent 

decisions” are overblown, too. Mot. at 14-15. Plaintiffs concede that the D.C. Litigation is “well 

ahead of this one on discovery related to the Counterclaim.” Id. at 11. This case will not beat the 

two-party D.C. Litigation to judgment: this matter has twenty-eight Plaintiffs, nineteen counts, a 

third-party complaint, and new CareFirst Plaintiffs who have yet to establish jurisdiction. 

Plaintiffs have not produced a meaningful set of documents and no depositions have been taken. 

Discovery should now proceed apace to support all of the overlapping claims and defenses in this 

matter, including the counterclaim.

CONCLUSION

Defendants respectfully request that the Court deny Plaintiffs’ Motion to sever and stay.

7 In its first set of interrogatories, Walgreens requested information about when Plaintiffs first 

communicated with a law firm about the substance of their claims. See Ex. B at Pls.’ Resp. & Obj. to 

Interrog. No. 3. Plaintiffs refused to respond. See id. Walgreens explained that the interrogatories were 

highly relevant both to its “statute-of-limitations and other defenses and its counterclaim.” See Ex. C, Sept. 

29, 2021, Ltr. from J. Bushofsky at 5, 7. According to Plaintiffs, however, Walgreens is not “entitled to any 

discovery whatsoever regarding Walgreens’ counterclaim,” even where that discovery is also germane to 

Walgreens’ defenses. See Ex. E, Oct. 18, 2021, Ltr. from K. Hibbert at 1. 

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Dated: July 7, 2022

Respectfully submitted,

/s/ Jeffrey J. Bushofsky

Jeffrey J. Bushofsky

Laura G. Hoey

Charles D. Zagnoli

ROPES & GRAY LLP

191 North Wacker Drive

32nd Floor

Chicago, Illinois 60606

Tel: (312) 845-1200

Fax: (312) 845-5562

Jeffrey.Bushofsky@ropesgray.com

Laura.Hoey@ropesgray.com

Charles.Zagnoli@ropesgray.com

Attorneys for Defendant / Counterclaimant 

Walgreen Co. & Defendant Walgreens Boots 

Alliance, Inc.

Case: 1:20-cv-01853 Document #: 297 Filed: 07/07/22 Page 20 of 21 PageID #:6592
CERTIFICATE OF SERVICE

I, Charles D. Zagnoli, hereby certify that the foregoing document was electronically filed 

on July 7, 2022, and will be served electronically via the Court’s ECF Notice system upon the 

registered counsel of record.

/s/ Charles D. Zagnoli

Charles D. Zagnoli

ROPES & GRAY LLP

191 North Wacker Drive

32nd Floor

Chicago, Illinois 60606

Tel: (312) 845-1200

Fax: (312) 845-5562

Charles.Zagnoli@ropesgray.com

Attorney for Defendant / Counterclaimant 

Walgreen Co. & Defendant Walgreens Boots 

Alliance, Inc.

Case: 1:20-cv-01853 Document #: 297 Filed: 07/07/22 Page 21 of 21 PageID #:6593