Regulation Corporations
Walgreens alleges Crowell & Moring engaged in ‘unethical side-switching,’ resulting in $642M arbitration loss
A $642 million arbitration award in opposition to Walgreens was obtained by “undue means” due to Crowell & Moring’s “unethical side-switching,” in line with a Could 19 amended petition looking for to vacate the award.
The petition alleges that Crowell & Moring suggested Walgreens in 2008 and 2009 on whether or not a pharmacy financial savings membership would have an effect on the “ordinary and customary” costs that the pharmacy reported to insurers for reimbursement.
Then in 2017, Crowell & Moring despatched a “pitch” doc to Humana, a medical insurance firm, arguing that Walgreens and different pharmacies had overcharged the insurer as a result of the financial savings membership costs weren’t handled as ordinary and customary, in line with the amended petition to vacate filed in Washington, D.C., federal courtroom. Crowell & Moring was employed to pursue litigation for Humana and refused to withdraw after Walgreens requested it, the petition says.
“This arbitration started in betrayal and resulted in a miscarriage of justice,” the petition says.
Law360 and Reuters have protection.
Walgreens beforehand filed a lawsuit in opposition to Crowell & Moring in Washington, D.C., superior courtroom alleging that the legislation agency breached its fiduciary obligation to Walgreens, Law360 reported in 2021. The amended swimsuit filed in April 2021 seeks authorized charges and prices incurred by Walgreens on account of the alleged breach, in addition to indemnification for damages that Walgreens is ordered to pay.
Walgreens says decision of its petition to vacate needs to be stayed pending a remaining decision of the swimsuit filed in opposition to Crowell & Moring in Washington, D.C.
Humana’s motion to confirm the award says the arbitrator “carried out some of the thorough, complete and deliberate arbitration proceedings identified to any of the undersigned counsel” at Crowell & Moring.
Crowell & Moring commented in an announcement emailed to Law360 by spokesperson Rebecca Carr.
“We’re assured that the arbitrator’s thorough and well-reasoned award shall be affirmed,” the assertion mentioned. “We’ve got no battle of curiosity in representing Humana, and we’re assured that we are going to prevail in [other litigation] filed by Walgreens in opposition to Crowell in D.C. Superior Court docket. The meritless declare in opposition to Crowell is not any foundation for vacating Humana’s arbitration award in opposition to Walgreens.”
