Walgreens’s Motion Against Former Law Firm Allowed to Proceed in Lawsuit Over Drug Prices

We all know attorneys are not allowed to represent both sides in a lawsuit, but what if the law firm currently representing one side used to represent the other side? Wouldn’t that be considered a conflict of interest? It’s especially likely to pose a problem if the issue involved in the lawsuit is the same issue the law firm previously handled for the other side.

If the law firm had recently represented the company they’re currently suing, it’s obvious how that could cause problems. But what if the prior legal work in question was performed more than a decade ago? Would that be long enough to erase the conflict of interest?

All that is in question as Walgreens seeks to disqualify a law firm currently filing a lawsuit against it on behalf of major health insurance providers.

Walgreens claims the law firm, Crowell & Moring, has breached its fiduciary duty to the giant retail company by representing major health insurers suing Walgreens over drug prices. The law firm sought to have the claims dismissed, but U.S. District Judge Virginia Kendall said Walgreens had provided enough evidence to keep their claim alive, at least for now.

Some of the country’s biggest health care insurance companies, including Blue Cross and Blue Shield, accused Walgreens of inflating their drug prices when submitting claims to the insurance companies for reimbursement. Walgreens has denied those allegations.

Representatives for Crowell & Moring have insisted that Walgreens’s allegations that they breached their fiduciary duty to the pharmacy retailer are baseless, but Judge Kendall disagrees as far as dismissing the case out of hand.

When Walgreens launched its “prescription savings club” program, Crowell & Moring represented the pharmacy. Now Walgreens is claiming the current lawsuit over their drug prices is directly related to the services Crowell & Moring provided for the giant retailer. That allegedly gives the law firm insider knowledge on Walgreens’s pricing strategies that the law firm could potentially use to benefit their current client in this lawsuit against Walgreens.

Crowell & Moring said the work they did for Walgreens was more than a decade ago and has no bearing on the current lawsuit. They filed a countermotion to have Walgreens’s concerns dismissed, but Judge Kendall denied the law firm’s motion.

To be clear, Judge Kendall has not ruled that Crowell & Moring has breached its fiduciary duty to Walgreens. She has only found that Walgreens has presented enough evidence to justify taking the matter under consideration.

Walgreens has filed a separate lawsuit against the law firm over an alleged breach of ethics. That lawsuit has asked a judge to strip Crowell & Moring of all the fees they earn in legal actions against Walgreens, both now and in the future.

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