Settled: December 16, 2014
The Firm represented shareholders in a suit on behalf of the company against the board of directors of Walgreen Co. (Walgreens) in connection with violations of the Controlled Substances Act and the resulting $80 million settlement with the Drug Enforcement Agency (DEA), the largest in that agency's history.
The DEA had found that certain actions by Walgreens pharmacists and the most senior leaders of the company were taken in "staggering disregard" of Walgreens' obligations under the Controlled Substances Act (CSA). The suit alleged the members of the board breached their fiduciary duty by, among other ways, failing to take any steps to address the DEA's concerns that led to the fine. As part of the settlement with the DEA, the company was required to implement certain corporate governance reforms. The settlement of the derivative action extended the terms of those reforms and also created additional obligations to ensure that the company would (1) comply with its obligations as a DEA registrant and (2) implement appropriate reporting requirements so that the Walgreens' board of directors could effectively monitor the company's compliance with the law.
As co-lead counsel, Labaton Sucharow managed all aspects of the litigation.
On September 19, 2014, the court granted preliminary approval to a settlement, and final approval was granted on December 16, 2014.
The case is In re Walgreen Co. Derivative Litigation, No. 13-cv-05471 (N.D. Ill.). Labaton Sucharow represented the lead plaintiffs West Palm Beach Police Pension Fund and the Police Retirement System of St. Louis. The defendant is the board of directors of Walgreen Co.