Pirelli Armstrong Tire Corp. Retiree Medical Benefits Trust v. Walgreen Co.
631 F.3d 436
7th Cir.2011Background
- Pirelli Armstrong Tire Corp. Retiree Medical Benefits Trust sues Walgreens under Illinois ICFA as a third-party payor seeking to recover allegedly inflated reimbursements.
- Pirelli alleges Walgreens routinely filled cheap-prescribed forms with more expensive dosage forms for Ranitidine and Fluoxetine, increasing costs billed to Pirelli.
- The reimbursement framework involves a PBM that sets MAC prices and uses AWP for non-MAC drugs, creating incentives for higher reimbursements when AWP applies.
- Pirelli relies on three evidentiary tracks: its own preliminary reimbursement data, a 2003 qui tam action Lisitza v. Walgreens, and an investigation from another PBM (ESI suit).
- The district court dismissed, holding Pirelli failed to plead fraud with Rule 9(b) particularity and failed to show injury under Illinois law; the unjust enrichment claim was dismissed with the fraud claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 9(b) requires particularity for ICFA fraud claim | Pirelli asserts heightened pleading applies and facts show misrepresentation/damages. | Walgreens contends Pirelli failed to allege specific misrepresentations and injury with particularity. | Yes; complaint insufficient under Rule 9(b). |
| Whether information-and-belief allegations can satisfy 9(b) when corroboration is lacking | Allegations draw on information from qui tam and PBM data as grounds for suspicions. | Grounds are insufficient corroboration without firsthand, meaningful data from plaintiff. | No; information-and-belief grounds were not plausibly corroborated. |
| Whether Pirelli could rely on Illinois data and nationwide pattern to establish injury | National pattern and Illinois data show injury from the scheme. | Lack of context and paucity of data prevent plausibly showing injury. | No; insufficient context and data to establish plausibility of injury. |
| Whether unjust enrichment survives the fraud dismissal | Unjust enrichment exists if Walgreens wrongfully retained benefits. | Unjust enrichment is contingent on fraud and cannot stand with its dismissal. | No; unjust enrichment claim dismissed as derivative of failed fraud claim. |
Key Cases Cited
- Davis v. G.N. Mortg. Corp., 396 F.3d 869 (7th Cir.2005) (Rule 9(b) pleading standard for fraud)
- Bankers Trust Co. v. Old Republic Ins. Co., 959 F.2d 677 (7th Cir.1992) (fraud pleadings cannot be based on information and belief alone)
- Emery v. Am. Gen. Fin., Inc., 134 F.3d 1321 (7th Cir.1998) (flexibility in 9(b) when information is outside plaintiff's control)
- Uni*Quality, Inc. v. Infotronx, Inc., 974 F.2d 918 (7th Cir.1992) (grounds for suspicions must make allegations plausible)
- Corley v. Rosewood Care Ctr., 142 F.3d 1041 (7th Cir.1998) (relaxation of 9(b) when plaintiff lacks access to all facts)
- Ackerman v. Nw. Mut. Life Ins. Co., 172 F.3d 467 (7th Cir.1999) (duty to plead grounds for suspicion in information-and-belief claims)
- In re HealthCare Compare Corp. Sec. Litig., 75 F.3d 276 (7th Cir.1996) (flexibility in pleading fraud; consider context of allegations)
- Pirelli Armst. Tire Corp. Ret. v. Walgreen Co., 631 F.3d 436 (7th Cir.2011) (affirmed district court dismissal for failure to plead fraud with particularity)