UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

BCBSM, INC., et al.,

Plaintiffs,

v.

WALGREEN CO., et al.

Defendants.

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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

DEFENDANTS’ REPLY IN SUPPORT OF THEIR MOTION TO DISMISS

COUNTS III AND IV OF PLAINTIFFS’ FIRST AMENDED COMPLAINT

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) 845-5522

Jeffrey.Bushofsky@ropesgray.com

Laura.Hoey@ropesgray.com

Charles.Zagnoli@ropesgray.com

Attorneys for Defendants Walgreen Co. 

and Walgreens Boots Alliance, Inc.
i

TABLE OF CONTENTS

Page

INTRODUCTION......................................................................................................................... 1

ARGUMENT................................................................................................................................. 2

A. Plaintiffs Allege No Sufficient Connection to Illinois Consumers......................... 2

1. The Alleged Illinois Pharmacy Transactions Are Both Legally Irrelevant 

and Insufficiently Pleaded........................................................................... 3

2. Plaintiffs’ Imprecisely Alleged Injuries to Illinois Insureds Cannot Support 

the Illinois Act Claims. ............................................................................... 8

B. Plaintiffs Badly Mischaracterize Avery and Landau, Cases that Foreclose Their 

Illinois Act Claims ................................................................................................ 10

C. Plaintiffs Ignore the PBMs, Crucial Intermediaries that Further Attenuate 

Plaintiffs’ Alleged Illinois Nexus ......................................................................... 13

CONCLUSION ........................................................................................................................... 15
ii

TABLE OF AUTHORITIES

Page(s)

Cases

Avery v. State Farm Mut. Auto. Ins. Co.,

216 Ill. 2d 100 (2005) ...................................................................................................... passim

Bonte v. U.S. Bank, N.A.,

624 F.3d 461 (7th Cir. 2010) ...............................................................................................2, 14

Cosmetique, Inc. v. ValueClick, Inc.

753 F. Supp. 2d 716 (N.D. Ill. 2010).....................................................................................4, 7

De Bouse v. Bayer AG,

235 Ill. 2d 544 (2009) ..............................................................................................................10

Flores v. United Airlines,

No. 18 C 6571, 2021 WL 843415 (N.D. Ill. Mar. 5, 2021).......................................................7

Forth v. Walgreen Co.,

No. 17 C 2246, 2021 WL 1103345 (N.D. Ill. Mar. 23, 2021)...............................................7, 9

Green Light Nat’l, LLC v. Kent,

No. 17-cv-6370, 2018 WL 4384298 (N.D. Ill. Sept. 14, 2018)...............................................12

Hab Carriers, Inc. v. Arrow Truck Sales, Inc.,

No. 09 C 5200, 2011 WL 250401 (N.D. Ill. Jan. 25, 2011) ..............................................4, 5, 6

Haught v. Motorola Mobility, Inc.,

No. 12 C 2515, 2012 WL 3643831 (N.D. Ill. Aug. 23, 2012).................................................10

Landau v. CNA Financial Corp.,

381 Ill. App. 3d 61 (1st Dist. 2008).......................................................................10, 11, 12, 15

Menards, Inc. v. Countryside Indus., Inc.,

No. 01 C 7142, 2004 WL 1336382 (N.D. Ill. June 14, 2004) ...................................................3

Morrison v. YTB Int’l, Inc.,

649 F.3d 533 (7th Cir. 2011) ...................................................................................8, 12, 13, 15

N. Ill. Ins. Agency, Inc. v. Leading Ins. Grp. Ins. Co., Ltd. (US),

No. 13 C 50248, 2014 WL 2860703 (N.D. Ill. June 23, 2014) .................................................7

Pirelli Armstrong Tire Corp. Retiree Medical Benefits Trust v. Walgreen Co.,

631 F.3d 436 (7th Cir. 2011) .....................................................................................................7
iii

Serv. Corp. Int’l v. Stericycle, Inc.,

No. 19 C 1960, 2020 WL 43017 (N.D. Ill. Jan. 4, 2020) ....................................................9, 11

The Clearing Corp. v. Fin. & Energy Exch. Ltd.,

No. 09 CV 5383, 2010 WL 2836717 (N.D. Ill. July 16, 2010) .........................................13, 15

West v. Act II Jewelry, LLC,

No. 15 C 5569, 2016 WL 1073095 (N.D. Ill. Mar. 18, 2016)...........................................13, 15

Statutes

Illinois Consumer Fraud and Deceptive Business Practices Act, 

815 ILCS 505/1, et seq...............................................................................................................1

Illinois Uniform Deceptive Trade Practices Act, 

815 ILCS 510/1, et seq...............................................................................................................1

Rules

Fed. R. Civ. P. 9...........................................................................................................................7, 9

Fed. R. Civ. P. 12.....................................................................................................................14, 15

Other Sources

Br. of Class Pl.-Appellee, 

Avery v. State Farm Mut. Auto. Ins. Co., 216 Ill. 2d 100 (2005) (No. 91494), 

2003 WL 24298425 .................................................................................................................11
1

INTRODUCTION

In their Opposition (“Opp’n”), Dkt. 130, Plaintiffs fail to save their claims under Illinois’ 

consumer fraud statutes (the “Illinois Acts”).1 The First Amended Complaint (“FAC”) expands 

Plaintiffs’ allegations about the many things that Walgreens, an Illinois company, does in Illinois; 

but the revised pleading offers nothing new to demonstrate any connection between Walgreens’ 

allegedly fraudulent practices and Illinois consumers, such that the purported fraud scheme 

occurred primarily and substantially in Illinois, as required to state a claim. The closest Plaintiffs 

come is to assert that some small, undefined number of insureds (not specifically alleged to reside 

in this state) maintained coverage through the non-Illinois Plaintiffs and may have filled some 

small, unspecified number of prescriptions in Illinois. An immaterial (and indeterminate) handful 

of alleged in-state Illinois transactions executed by Blue Cross Blue Shield insureds from states as 

distant as Arizona and Washington should not distract the Court’s attention from the fact that the 

fraud actually alleged in this case did not involve Plaintiffs’ insureds at all. Plaintiffs’ insureds, 

wherever they lived or filled prescriptions, are not alleged to have received or acted on any 

deceptive communication—not in Illinois or anywhere else. Rather, Plaintiffs allege that 

Walgreens misreported usual and customary prices (“U&C”) to non-Illinois third-party 

intermediaries, the pharmacy benefit managers (“PBMs”), who in turn allegedly communicated 

those prices to the non-Illinois Plaintiffs. In this case, any supposed Illinois nexus is even more 

attenuated than it was for the non-Illinois plaintiffs in Avery v. State Farm—who at least were 

alleged to have directly received the Illinois defendant’s deceptive communications. Avery v. State 

1 Counts III and IV of the First Amended Complaint, Dkt. 122 (the “Illinois Act claims”), allege that 

Walgreen Co. (“Walgreens”) and Walgreens Boots Alliance, Inc. (“WBA,” and together with Walgreens, 

the “Defendants”), violated the Illinois Uniform Deceptive Trade Practices Act, 815 ILCS 510/1, et seq.

(“IUDTPA”), and the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1, et 

seq. (“ICFA,” and together with IUDTPA, the “Illinois Acts”).
2

Farm Mut. Auto. Ins. Co., 216 Ill. 2d 100, 188 (2005). No deceptive communication in this case is 

alleged to have been received, relied upon, or acted upon by anyone in Illinois. Moreover, neither 

Plaintiffs nor their insureds are adequately alleged to have suffered any harm in Illinois. While 

non-Illinois Plaintiffs might find it convenient to proceed en masse under Illinois’ consumer laws 

(in addition to the many non-Illinois consumer laws they invoke in the First Amended Complaint), 

those laws do not apply here any more than they did in Avery. Plaintiffs’ previously dismissed 

ICFA and IUDTPA claims should now be dismissed with prejudice.2

ARGUMENT

A. Plaintiffs Allege No Sufficient Connection to Illinois Consumers

Illinois consumers are almost entirely absent from the Opposition, just as they are largely 

missing from the First Amended Complaint. See Mem. in Support of Defs.’ Mot. to Dismiss 

Counts III & IV of Pls.’ FAC, Dkt. 128 (“OB”) at 6–7. Indeed, Plaintiffs do not dispute, and so 

concede, that Walgreens never deceived Illinois consumers about anything. Instead, as Plaintiffs 

acknowledge, the allegedly fraudulent transactions involved only the U&C prices Walgreens 

transmitted to, and the reimbursements it received from, the non-Illinois PBMs. See OB at 12–13; 

Bonte v. U.S. Bank, N.A., 624 F.3d 461, 466–67 (7th Cir. 2010) (failure to respond to argument in 

opposition brief results in waiver); see also FAC ¶¶ 146, 161 (identifying the alleged fraudulent 

statements as U&C prices in reimbursement claims).

Plaintiffs condense the sum total of their allegations about Illinois consumers into a single 

sentence in the Opposition: “[M]embers of each Plan have purchased prescription drugs from 

Walgreens in Illinois, and Walgreens’ deception regarding its true U&C prices of drugs discounted 

2 Plaintiffs claim that “the Court denied Walgreens’ motion to dismiss . . . with respect to all claims except 

two: Claims III and IV for violation of the Illinois Acts.” Opp’n at 3. In reality, the Court also dismissed 

Plaintiffs’ negligent misrepresentation claim. See Mem. Op. & Order, Dkt. 121 (“MTD Op.”) at 17, 33. 

Plaintiffs have not repleaded it, apparently content to abandon the claim.
3

by the PSC Program (and other similar programs) injured the Plans and their Members, including 

those based in Illinois.” Opp’n at 6; see also FAC ¶¶ 155, 165 (nearly identical language). This 

conclusory assertion falls short because the Illinois Acts require both (1) a “nexus with Illinois 

consumers,” Menards, Inc. v. Countryside Indus., Inc., No. 01 C 7142, 2004 WL 1336382, at *2 

(N.D. Ill. June 14, 2004); see also N. Ill. Ins. Agency, Inc. v. Leading Ins. Grp. Ins. Co., Ltd. (US),

No. 13 C 50248, 2014 WL 2860703, at *1 (N.D. Ill. June 23, 2014), and (2) fraudulent acts that 

occur primarily and substantially in Illinois. Avery, 216 Ill. 2d at 187. No amount of rhetorical spin 

about some individual insureds’ de minimis Illinois prescription fills can transform the purported 

U&C misreporting scheme alleged in the First Amended Complaint into one that happened 

primarily and substantially in this state—not when all of the communications were received by 

non-Illinois PBMs who relayed the information to non-Illinois Plaintiffs.

1. The Alleged Illinois Pharmacy Transactions Are Both Legally Irrelevant 

and Insufficiently Pleaded.

In their haphazard attempt to save the Illinois Act claims by focusing on a few unspecified 

Illinois prescriptions, see Opp’n at 12, Plaintiffs lose sight of the need to connect the purported 

fraud to Illinois consumers. See Avery, 216 Ill. 2d at 187 (“the critical question in this case becomes 

whether the circumstances relating to plaintiffs’ disputed transactions . . . occurred primarily and 

substantially in Illinois”) (emphasis added). Even accepting Plaintiffs’ scant allegations about 

Illinois pharmacy visits as true, Plaintiffs still merely assert that some individuals “filled 

prescriptions at Walgreens’ Illinois pharmacies.” Opp’n at 12. Plaintiffs do not (and cannot) allege 

that any consumers were defrauded in any way during those Illinois store visits. Instead, Plaintiffs 

argue that Walgreens reported inaccurate U&C prices to the PBMs and that Walgreens received 

higher reimbursements from the PBMs as a result. See, e.g., Opp’n at 3; see also FAC ¶¶ 91, 93. 

An insured’s transaction at a Walgreens’ pharmacy is completely distinct from the allegedly 
4

fraudulent PBM reimbursement process that happens behind the scenes, out of the insured’s sight. 

See OB at 6. 

The cases Plaintiffs cite only underscore the necessary connection between Illinois 

consumers and the purported fraud. In Cosmetique, Inc. v. ValueClick, Inc., for example, the Court 

declined to dismiss an ICFA claim even though the plaintiff had not explicitly alleged that any 

Illinois consumers engaged in fraudulent transactions. See 753 F. Supp. 2d 716, 723 (N.D. Ill. 

2010). The Court made clear, however, that it could reasonably infer the necessary connection 

between Illinois consumers and the fraudulent advertising from the plaintiff’s allegations. See id.

Critically, in Cosmetique (unlike this case) thousands of Illinois consumers were themselves

potential victims of the defendant’s fraudulent communications, having actually received and 

responded to the false advertising. “It is plausible,” the Court held, “that of the 8,000 Illinois 

consumers [who responded to the fraudulent ads], at least one or more could have been allegedly 

deceived.” Id. Nothing in Plaintiffs’ First Amended Complaint supports an inference that insureds’ 

isolated transactions at Illinois pharmacies furthered an Illinois-focused fraud scheme or that any 

Illinois consumer was harmed.

Plaintiffs argue that the Court must consider all the facts and circumstances of the allegedly 

fraudulent transactions, see Opp’n at 12, but they do not and cannot explain how those broadly 

construed transactions took place primarily and substantially in Illinois. Hab Carriers, Inc. v. 

Arrow Truck Sales, Inc., is instructive. No. 09 C 5200, 2011 WL 250401 (N.D. Ill. Jan. 25, 2011); 

see also OB at 14. There, the plaintiff was an Illinois corporation with Illinois employees alleging 

that it “felt injury” in Illinois. 2011 WL 250401, at *5. It brought an ICFA claim based on 

misrepresentations related to its purchase of trucks in Missouri and Iowa. See id. Despite the 

Illinois-headquartered plaintiff’s extensive ties to this state—more significant than any connection 
5

between Illinois and these out-of-state Plaintiffs or their claims—this Court granted summary 

judgment in the defendant’s favor. See id. at *5–6. The Hab Carriers plaintiff argued that, although 

most of the deception and fraudulent interactions took place out of state, its general manager 

answered some of the allegedly fraudulent phone calls in Illinois. Id. at *6. That relatively minor 

Illinois connection, this Court held, did not bring the plaintiff’s claim within ICFA’s territorial 

reach. Instead, “even taking the facts in the light most favorable to [the plaintiff] and accepting 

that . . . [the general manager] may have been on his cell phone in Illinois instead of in his Iowa 

office during at least one other key conversation, the circumstances relating to the alleged fraud 

did not take place primarily and substantially in Illinois.” Id. (quotations, citation omitted). Hab 

Carriers emphasizes that incidental, immaterial Illinois contacts are not enough.

As Hab Carriers reflects, Illinois law looks at the overall alleged fraud scheme to 

determine whether it occurs primarily and substantially in this state. In this case, the alleged 

scheme, involving many millions of purported prescriptions filled by non-Illinois insureds outside 

this state, obviously and overwhelmingly took place outside of Illinois. However, even if the Court 

chose to focus narrowly on Plaintiffs’ isolated subset of alleged Illinois pharmacy transactions and 

infer a link between those prescription fills and the alleged U&C misreporting scheme, each of 

those discrete alleged fraudulent transactions would still occur primarily and substantially outside

Illinois. If one of the Plaintiffs’ insureds happened to fill a prescription in Illinois, that local 

transaction (like all such transactions) triggered a series of non-Illinois communications and 

responsive actions, whereby a non-Illinois PBM received Walgreens’ U&C price and transmitted 

it to a non-Illinois Plaintiff insurer, which then acted on it and allegedly experienced harm in its 

home state. See Opp’n at 3 (describing reimbursement transaction); OB at 5–6 (same). Taken “in 

the context of [Plaintiffs’] individual case,” Opp’n at 12, none of the purportedly fraudulent 
6

transactions that Plaintiffs allege happened primarily in Illinois. A smattering of alleged Illinois 

prescriptions, incidental to the larger purported U&C misreporting scheme, adds no more of an 

Illinois nexus to this case than the manager’s Illinois phone calls in Hab Carriers.

Plaintiffs have no answer to Hab Carriers’ logic. Their only attempt to distinguish the case 

is to argue irrelevantly that it “did not address [ ] a heightened pleading standard in the context of 

the Illinois Acts or otherwise.” Opp’n at 14 n.4. Defendants never suggested that it did. Rather, 

Defendants cited Hab Carriers to support exactly the same bootstrapping argument set out above: 

that “BCBS of Arizona [cannot] use the five Illinois transactions it purports to plead with 

particularity to hold Walgreens liable for its insureds’ millions of other transactions in Tucson and 

Phoenix.” OB at 14. 

Plaintiffs also failed to plead their insureds’ purported “Illinois transactions” with 

particularity, an independent reason that the claims should be dismissed with prejudice. Plaintiffs 

cannot seriously dispute that, out of 29 Plaintiffs, only one alleges with any specificity whatsoever 

that any of its insureds filled prescriptions in Illinois. See OB at 12. Bizarrely, Plaintiffs do contend 

that they “provide specific examples” showing that “members of each Plan have purchased 

prescription drugs from Walgreens in Illinois.” Opp’n at 12 (emphasis added). The paragraphs 

Plaintiffs cite, however, offer absolutely no support. Paragraphs 145, 149, 155, and 165 only parrot 

Plaintiffs’ conclusory allegation that “members of each of Plaintiffs’ health plans have purchased 

prescription drugs from Walgreens in Illinois” and that Plaintiffs have insureds “based in Illinois.” 

Paragraph 7 alleges general background about the Prescription Savings Club (“PSC”) program. 

Paragraphs 12–38 list all of the various non-Illinois Plaintiffs. And paragraph 43 alleges some of 

the states where Walgreens has stores. Not a single paragraph cited by Plaintiffs comes anywhere 
7

close to alleging “specific examples” of purchases by Plaintiffs’ insureds at Walgreens’ Illinois 

pharmacies.

Instead, Plaintiffs argue that, because the First Amended Complaint now baldly alleges that 

“members of each of Plaintiffs’ health plans have purchased prescription drugs from Walgreens in 

Illinois,” FAC ¶¶ 145, 155, and have insureds “based in Illinois,” id. ¶¶ 149, 165, Plaintiffs have 

established a more robust Illinois nexus and need plead no more. See Opp’n at 13. But these vague, 

conclusory allegations do not satisfy the “who, what, when, where, and how” standard that even 

Plaintiffs concede they must meet under Federal Rule of Civil Procedure 9(b). See id. (citation 

omitted).3 As Plaintiffs allege, Florida Blue, for example, has nearly 4 million members, and 

Walgreens has 583 Illinois stores. FAC ¶¶ 14, 43. Thus, by pleading that unspecified members of 

Florida Blue purchased prescription drugs from Walgreens in Illinois, FAC ¶¶ 145, 155, Plaintiffs 

allege only that at least one of 4 million individuals filled a prescription in at least one of 583 

Illinois stores at some point between 2007 and today. These imprecise allegations plainly fail to 

satisfy Federal Rule of Civil Procedure 9(b). See, e.g., Forth v. Walgreen Co., No. 17 C 2246, 

2021 WL 1103345, at *4 (N.D. Ill. Mar. 23, 2021) (dismissing imprecisely pleaded amended 

complaint because “[t]o hold otherwise would allow Plaintiffs to substantially broaden the scope 

of this fraud action by making their allegations less specific, rather than more,” a “result [that] 

would be contrary to the purposes of Rule 9(b)”).4

3 Plaintiffs suggest that, in Pirelli Armstrong Tire Corp. Retiree Medical Benefits Trust v. Walgreen Co.,

631 F.3d 436, 446 (7th Cir. 2011), the court held that an ICFA plaintiff need not rely on Illinois data. Opp’n

at 13. But Pirelli addressed only whether the plaintiff adequately pleaded fraud, not whether the plaintiff 

adequately pleaded an Illinois nexus. See 631 F.3d at 446.

4 See also Cosmetique, 753 F. Supp. 2d at 720–21 (plaintiff “cannot identify specific statements to satisfy 

Rule 9(b) and then change the basis of its claim to a generalized accusation of a fraudulent scheme to which 

Defendants cannot effectively respond”); see also Flores v. United Airlines, No. 18 C 6571, 2021 WL 

843415, at *6–7 (N.D. Ill. Mar. 5, 2021) (dismissing ICFA claim, in part because “Plaintiff alleges that she 
8

Without these imprecisely pleaded allegations about “members of each of Plaintiffs’ health 

plans,” FAC ¶¶ 145, 155, the only Plaintiff (out of 29) left with any alleged Illinois transactions is 

BCBS of Arizona. See OB at 12. The Court already correctly held that the five transactions it 

alleged with any semblance of particularity are “plainly pleaded insufficiently to state a claim” 

under the Illinois Acts. MTD Op. at 21.5 Nothing in the First Amended Complaint suggests that 

the Court should reach a different result now.

2. Plaintiffs’ Imprecisely Alleged Injuries to Illinois Insureds Cannot Support 

the Illinois Act Claims.

Like the Illinois consumer nexus requirement itself, which is not found within ICFA’s text, 

the relevance of Illinois-focused harm to the Illinois Acts comes through clearly in the case law. 

Plaintiffs nonetheless protest that Walgreens has created a “fictional requirement that [Plaintiffs] 

show specific harm took place in Illinois.” Opp’n at 14. To support their false assertion, Plaintiffs 

note that the Illinois Acts do not specify harm felt within Illinois as a statutory element. Id. True 

enough, but the very cases Plaintiffs cite for support show that the location where a plaintiff suffers 

harm is, in fact, highly relevant to Illinois courts’ determination whether a fraudulent scheme 

occurred primarily and substantially in this state. Losses incurred only or primarily outside Illinois 

counsel against applying the Illinois Acts. See Avery, 216 Ill. 2d at 188 (“Damage to Avery, if any, 

occurred in Louisiana.”); Morrison v. YTB Int’l, Inc., 649 F.3d 533, 538 (7th Cir. 2011) (“Morrison 

is a resident of Texas but includes no allegations as to where she was when she used United’s website to 

purchase travel insurance”).

5 Plaintiffs misleadingly imply that their original complaint alleged only that Walgreens is an Illinois 

corporation with Illinois headquarters and Illinois stores. See Opp’n at 3. In fact, BCBS of Arizona’s 

original complaint alleged exactly the same five Illinois transactions BCBS of Arizona alleges now. 

Compare FAC, Ex. 2 at 7, with No. 1:20-cv-4738, Dkt. 1, Ex. 2. Plaintiffs apparently now run from their 

original allegations, perhaps to suggest that the First Amended Complaint includes Illinois transactions the 

Court has not already considered and rejected. See MTD Op. at 21. But Plaintiffs highlighted in their 

original opposition these “five overcharges for prescriptions dispensed by Walgreens pharmacies located 

in Illinois,” Pls.’ Consolidated Mem. of Law in Opp’n to Defs.’ Mot. to Dismiss, Dkt. 110 at 20, and the 

Court still correctly dismissed their Illinois Act claims.
9

sent payments to Illinois, which means that any loss occurred in Missouri.”). Far from inventing 

new elements, Defendants seek only to hold Plaintiffs to the standard that their own cases apply. 

See OB at 14–15. While Plaintiffs question the need to allege that they were injured in Illinois, 

they certainly do not suggest that they have been harmed in this state. See Opp’n at 14. 

Even if Plaintiffs’ few, vaguely alleged insureds “based in Illinois” were purportedly 

harmed here due to higher alleged premiums or copays, Plaintiffs have no claims themselves under 

the Illinois Acts.6 Plaintiffs cannot bring claims based on other people’s supposed Illinois injuries. 

See Serv. Corp. Int’l v. Stericycle, Inc., No. 19 C 1960, 2020 WL 43017, at *1, 3–4 (N.D. Ill. Jan.

4, 2020) (finding plaintiff’s ICFA claim lacked Illinois nexus even though plaintiff alleged that 

purportedly fraudulent practice increased costs for its subsidiaries who “operate[] funeral homes 

across the United States”); see also OB at 12–14.

The Opposition also confirms that, if any Illinois insured suffered harm, it was because of 

Plaintiffs’ business decisions, not Walgreens’ conduct. Plaintiffs recouped their allegedly inflated 

reimbursement payments at their insureds’ expense. Crucially, Plaintiffs do not dispute that “they 

allegedly passed on any damage they incurred in Illinois to their insureds.” Opp’n at 15 (citing OB

at 14, as if Defendants in their Motion, rather than Plaintiffs in the First Amended Complaint, were 

making the allegations, see FAC ¶ 163). Instead, Plaintiffs vaguely suggest that “the Plans—and 

the market generally”—suffered other, more complicated injuries not caused by Plaintiffs’ own 

business decision to raise their insureds’ rates. See id. If any Illinois insureds or “the market 

generally” suffered anything other than the injuries Plaintiffs themselves caused, Plaintiffs—who 

6 Plaintiffs’ allegation that Walgreens “injured [Plaintiffs’] Members, including those based in Illinois,” 

FAC ¶¶ 149, 165, suffers from the same lack of particularity as their imprecise allegations about their 

insureds’ Illinois purchases. For example, how many of Florida Blues’ 4 million members were “based in” 

Illinois? When? Does a Florida Blue subscriber who is “based in” Illinois even pay co-payments or health 

insurance premiums from Illinois? The First Amended Complaint provides no answers, as it is required to 

do under Federal Rule of Civil Procedure 9(b). See Forth, 2021 WL 1103345, at *4.
10

bear the burden to plead and ultimately prove the alleged harm—have yet to identify the injuries. 

Without any adequately alleged harm, proximately caused by the defendant’s alleged misconduct, 

there can be no viable ICFA claim. See Avery, 216 Ill. 2d at 195–203; cf. De Bouse v. Bayer AG,

235 Ill. 2d 544, 559–60 (2009) (rejecting “market theory” of Illinois Acts liability).

B. Plaintiffs Badly Mischaracterize Avery and Landau, Cases that Foreclose 

Their Illinois Act Claims

Unable to allege a connection to Illinois consumers based on their own or their insureds’ 

transactions, Plaintiffs next attempt to concoct an Illinois nexus by focusing on Walgreens’ 

purported activities in the state—a tactic Plaintiffs already tried unsuccessfully in response to 

Walgreens’ prior dismissal motions. See Opp’n at 4–11; see also Pls.’ Consolidated Mem. of Law 

in Opp’n to Defs.’ Mots. to Dismiss, Dkt. 83 at 25 & Dkt. 110 at 20. Again, no matter how many 

things Plaintiffs allege Walgreens, its subsidiaries, or its executives did in Illinois, Avery forecloses

Plaintiffs’ Illinois Act claims. Plaintiffs do not dispute Avery’s core holdings: (1) that the Illinois 

Acts have no “extraterritorial effect” and apply only “if the circumstances that relate to the disputed 

transaction occur primarily and substantially in Illinois,” 216 Ill. 2d at 185–87; and (2) that an 

allegation that “a scheme to defraud was ‘disseminated’ from [a defendant’s Illinois] headquarters 

is insufficient” to support Illinois Act claims. Id. at 189. Instead, Plaintiffs attempt to narrow 

Avery’s holdings beyond recognition. See Opp’n at 9–10. In Plaintiffs’ reading, Avery forecloses 

Illinois Act claims only if the plaintiff alleges solely that a scheme to defraud was disseminated 

from the defendant’s Illinois headquarters. Id. According to Plaintiffs, “dissemination of a 

fraudulent scheme” is a single fact to be pleaded, rather than a conclusion based on many varied 

facts associated with running a corporation in a particular place. See id.

The facts of Avery itself, along with the facts of cases like Landau v. CNA Financial Corp.,

381 Ill. App. 3d 61 (1st Dist. 2008); Haught v. Motorola Mobility, Inc., No. 12 C 2515, 2012 WL 
11

3643831, at *3–5 (N.D. Ill. Aug. 23, 2012); and Stericycle, 2020 WL 43017, at *3–4, put the lie 

to Plaintiffs’ strained and narrow interpretation. In Avery, for example, the evidence at trial in fact 

demonstrated that “State Farm conceived, developed, implemented and directed its uniform 

scheme from its headquarters” in Illinois, “made the initial decision to specify [inferior] non-OEM 

crash parts” in Illinois, “continued to enforce the scheme” from Illinois, “created the deceptive . . .

terminology” in Illinois, “misleadingly responded to complaints” in Illinois, and “made all policy 

and practice decisions regarding the monitoring, enforcement, and continuation of [the] scheme” 

in Illinois. Br. of Class Pl.-Appellee, Avery v. State Farm Mut. Auto. Ins. Co., 216 Ill. 2d 100 

(2005) (No. 91494), 2003 WL 24298425, at *31–32. Yet these facts (which the Supreme Court of 

Illinois summarized with the shorthand conclusion that the “scheme to defraud was ‘disseminated’ 

from” Illinois, 216 Ill. 2d at 189) are nearly identical to the allegations Plaintiffs argue set their 

claims apart. See Opp’n at 4 (“Walgreens [and WAGDCO] administered, and continues to 

administer, its PSC Program” from Illinois); id. (“Walgreens developed the PSC Program” in 

Illinois); id. (“Walgreens made deceptive statements regarding its PSC programs in Illinois”); id.

at 5 (WHI “created and issued [false] statements” in Illinois); id. at 5–6 (decisions about PSC 

“made by Walgreens’ senior management in, and implemented out of, Illinois”). The plaintiff in 

Landau alleged even more facts about the defendant’s Illinois activities, including that the 

defendant “consummat[ed]” the disputed transaction in Illinois, received initial payments in 

Illinois, and directed the plaintiff to send future payments to Illinois. See 381 Ill. App. 3d at 64–

65. These categories of facts, too, are mirrored in Plaintiffs’ First Amended Complaint. See Opp’n

at 11 (alleging “contracts executed” and “payments received” in Illinois). Rather than address the 

parallels between their claims and those in Landau, Plaintiffs mischaracterize the case, contending 

incorrectly that “the only evidence presented was that the defendants disseminated their fraudulent 
12

scheme from Illinois.” Id. at 10. Landau, Avery, and the cases that followed confirm that plaintiffs 

who allege extensive Illinois activities by Illinois-based defendants (including orchestrating and 

projecting a fraud), do not have claims under the Illinois Acts if the actual fraudulent 

communications, reliance, and harm happened elsewhere. See Landau, 381 Ill. App. 3d at 65. 

Allegations that a fraudulent scheme was purportedly disseminated from Illinois are insufficient, 

whether the plaintiff pleads them in one conclusory sentence or 333 paragraphs of alleged facts.

Plaintiffs make much of the fact-specific nature of the Illinois-nexus analysis. See Opp’n

at 9–10, 12. But Plaintiffs hope the Court will ignore that courts routinely dismiss Illinois Act 

claims where the sum and substance of a plaintiff’s Illinois nexus pleading is that the defendant 

operates in Illinois and broadcasts a fraudulent scheme from this state to harm non-Illinois 

consumers in other states. See OB at 2 (collecting cases). The volume of purported factual detail 

describing a fraud scheme conceived in and disseminated from Illinois, but occurring primarily in 

another state, has no bearing on whether the plaintiff states a claim under Avery and the other 

leading authorities. This deficiency in Plaintiffs’ allegations is particularly striking in light of the 

cases Plaintiffs cite for support. Unlike the plaintiffs in the referenced authorities, these Plaintiffs 

never even communicated with Walgreens regarding U&C prices in Illinois (or anywhere) and 

suffered no injury in Illinois. Contra Morrison, 649 F.3d at 537 (defendant “does not have offices 

or representatives in other states,” the “only way to deal with [defendant] is through its 

headquarters in Illinois,” and defendant conducted and plaintiffs attended “training sessions, 

regional meetings, and ‘red carpet days’” in Illinois related to alleged pyramid scheme)7

; Green 

7 Plaintiffs rely heavily on Morrison, see Opp’n at 8, but it is both factually and legally distinguishable. In 

Morrison, the plaintiffs alleged only a single consumer fraud count. See 649 F.3d at 534. Thus, the court 

framed the issue of ICFA’s application solely as a question of choice-of-law—that is, whether ICFA or 

some other state’s consumer protection act should apply to the plaintiffs’ claim. Id. at 536 (“If the Illinois 

Consumer Fraud Act law does not apply because events were centered outside Illinois, then plaintiffs must 

rely on some other state’s law.”). Here, in contrast, Plaintiffs have alleged 14 additional consumer fraud 
13

Light Nat’l, LLC v. Kent, No. 17-cv-6370, 2018 WL 4384298, at *5 (N.D. Ill. Sept. 14, 2018) 

(plaintiff’s main office in Illinois and deceptive marketing “result[ed] in irreparabl[e] injury to its 

business, reputation and good will in Illinois”); West v. Act II Jewelry, LLC, No. 15 C 5569, 2016 

WL 1073095, at *2–3 (N.D. Ill. Mar. 18, 2016) (plaintiffs purchased products in Illinois or 

communicated directly with defendant in Illinois); The Clearing Corp. v. Fin. & Energy Exch. 

Ltd., No. 09 CV 5383, 2010 WL 2836717, at *6 (N.D. Ill. July 16, 2010) (fraudulent 

misrepresentations made directly to counterclaim plaintiff in Illinois). As Plaintiffs’ own cases 

demonstrate, nothing in the First Amended Complaint brought Plaintiffs’ claims within the Illinois 

nexus requirement under the Illinois Acts.

C. Plaintiffs Ignore the PBMs, Crucial Intermediaries that Further Attenuate 

Plaintiffs’ Alleged Illinois Nexus

Walgreens only communicated U&C prices directly to, and received payments directly 

from, PBMs located outside Illinois. Contra Morrison, 649 F.3d at 537 (plaintiffs’ “complaint 

alleges that they dealt directly with” defendant in Illinois); West, 2016 WL 1073095, at *2–3

(plaintiffs “had direct communications with [defendant] in Illinois,” “purchased supplies directly 

from [defendant] in Illinois,” and received orders “shipped directly from [defendant] in Illinois”); 

Energy Exchange, 2010 WL 2836717, at *6 (misrepresentations made “by Illinois employees . . .

directly to” counterclaim plaintiff). Indeed, Walgreens reported U&C prices to the PBMs pursuant 

to contracts Walgreens negotiated and signed with the PBMs, and those PBMs then transmitted 

Plaintiffs’ reimbursement payments to Walgreens. See FAC ¶¶ 58, 75; OB at 5–6. Plaintiffs do not 

dispute and thus concede that, for all they allege, the PBMs—which certain Plaintiffs recently 

counts under other states’ laws—notably, from the Plaintiffs’ respective home states. See FAC ¶¶ 168–324. 

The issue here is not whether Illinois law applies to Plaintiffs’ sole consumer fraud claim, but instead 

whether Plaintiffs can plead a duplicative claim already covered by their home states’ laws. They cannot, 

under clear-cut Illinois law.
14

described as “ground zero for the bulk of the [alleged] fraud,” OB at 6 (citation omitted)—are 

located outside Illinois, processed transactions outside Illinois, and viewed U&C prices outside

Illinois. See OB 6–7, 12; Bonte, 624 F.3d at 466–67 (party waives argument to which it does not 

respond). 

Rather than address this fundamental defect in their Illinois Act claims, Plaintiffs attempt 

to hide the non-Illinois PBMs’ crucial role through exaggeration, mischaracterization, and 

misdirection. First, Plaintiffs erroneously suggest that this Court has already held that the PBMs 

can be entirely ignored. “With regard to Walgreens’ focus on the conduct of the PBMs,” Plaintiffs 

say, “this Court rejected Walgreens’ previous attempt to insert the PBMs as alleged necessary 

parties in this litigation.” Opp’n at 14 n.5. Plaintiffs misconstrue this Court’s previous ruling. The 

Court did decide that the PBMs are not indispensable for joinder purposes, but it most certainly 

did not hold that they are irrelevant. See MTD Op. at 6–7 (denying Walgreens’ motion to dismiss 

under Federal Rule of Civil Procedure 12(b)(7), but describing the PBMs as “intermediaries”). 

Second, while Plaintiffs argue in their brief that “Walgreens engaged in contact with the 

Plans . . . in Illinois,” Opp’n at 1, Plaintiffs cite paragraphs from the First Amended Complaint that 

say no such thing. The First Amended Complaint lacks any allegation that Walgreens directly 

interacted with Plaintiffs—in Illinois or anywhere else. Compare Opp’n at 1, with FAC ¶¶ 145, 

149, 155, 165. Instead, the cited paragraphs repeat Plaintiffs’ descriptions of Walgreens’ purported 

activities at its Illinois headquarters and Plaintiffs’ vague, irrelevant allegations that unspecified 

insureds filled prescriptions somewhere, at some time, in Illinois or were “based in” Illinois. See

FAC ¶¶ 145, 149, 155, 165. In fact, Walgreens has had no contact with the Plaintiffs regarding 

U&C reporting.
15

Third, Plaintiffs make much of “contracts executed” and “payments received” in Illinois. 

Opp’n at 11; see also id. at 6 (claiming “contracts at issue were negotiated in Illinois and [the] 

payments resulting from those agreements were sent to Illinois”). Plaintiffs’ use of the passive 

voice is telling. Plaintiffs did not negotiate contracts with Walgreens. That was the PBMs. See

FAC ¶¶ 145, 155. Plaintiffs did not reimburse Walgreens. That was the PBMs. See FAC ¶ 75.

Moreover, as Plaintiffs have made abundantly clear, they allege fraud, not breach of Walgreens’ 

PBM contracts. See, e.g., Dkt. 83, at 5–7. Thus, unlike the plaintiffs in the cases Plaintiffs cite for 

support, these Plaintiffs cannot and do not allege that they directly contracted in or sent payments 

to Illinois—and Plaintiffs expressly disavow that Walgreens’ PBM contracts are in any sense a 

basis for their statutory fraud claims. Contra Morrison, 649 F.3d at 537; West, 2016 WL 1073095, 

at *2–3; Energy Exchange, 2010 WL 2836717, at *6. Of course, even if Plaintiffs (and not the 

PBMs) had directly contracted with Walgreens and paid Walgreens (which they did not), such 

contacts would still be insufficient to establish an adequate Illinois nexus under the Illinois Acts 

when the alleged deception, reliance, and proximately caused harm all occurred completely outside 

this state. See Avery, 216 Ill. 2d at 188; Landau, 381 Ill. App. 3d at 64–65.

CONCLUSION

After two pleadings, Plaintiffs still ask the Court to ignore Illinois law and apply the Illinois 

Acts to transactions that took place primarily and substantially outside Illinois. Avery, Landau, and 

their progeny preclude the extraterritorial application of the Illinois Acts to disputed transactions 

occurring primarily and substantially beyond this state’s borders. For the foregoing reasons, 

Defendants respectfully request that the Court dismiss Counts III and IV of the First Amended 

Complaint with prejudice under Federal Rule of Civil Procedure 12(b)(6).
16

Dated: April 2, 2021 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) 845-5522

Jeffrey.Bushofsky@ropesgray.com

Laura.Hoey@ropesgray.com

Charles.Zagnoli@ropesgray.com

Attorneys for Defendants Walgreen Co. and 

Walgreens Boots Alliance, Inc.
CERTIFICATE OF SERVICE

I, Charles D. Zagnoli, hereby certify that the foregoing Defendants’ Reply in Support of 

Their Motion to Dismiss Counts III and IV of Plaintiffs’ First Amended Complaint was 

electronically filed on April 2, 2021, and will be served electronically via the Court’s ECF Notice 

system upon the registered parties 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) 845-5522

Charles.Zagnoli@ropesgray.com

Attorney for Defendants Walgreen Co. and 

Walgreens Boots Alliance, Inc.