Mayhall Fondren Blaize

Business litigation could turn into bloody battle

In 2010, Walgreens entered into an agreement with Theranos, which is a blood testing laboratory, to provide testing services to its customers. The agreement was amended in 2012 to provide for Theranos Wellness Centers to operate inside Walgreens. However, there appeared to be a problem with the accuracy of the blood tests Theranos was conducting. As recently as June 2016, when Walgreens severed its business relationship with Theranos, the laboratory allegedly admitted to Walgreens that over 10 percent of the test reports had to be voided. As many Louisiana companies might do under similar circumstances, the pharmacy retail giant recently filed business litigation due to this issue, at least in part.

Court documents indicate that as high as 11.3 percent of the blood tests provided to customers had to be voided. Prior to filing the lawsuit, Walgreens had requested certain assurances from Theranos that they were addressing the issue, which was also under investigation by regulators and the press. Walgreens claims that they never received any of the assurances needed in order to continue the relationship.

Theranos fired back, accusing Walgreens of breaching its agreement to expand the wellness centers to more than the 41 locations in which it was operating. The company expressed disappointment that Walgreens initiated litigation. The allegations from both sides appear to set the stage for a bloody and contentious battle if they are unable to come to an agreement.

As many Louisiana business owners can attest, business litigation can become contentious, time consuming and expensive. These possibilities often tend to make business owners do whatever they can to work out disagreements outside of a courtroom, and many issues can be resolved through an alternative method of dispute resolution. Having said that, if it is necessary, it should be pursued since the damage that could be done to the business might threaten its future success.

Source:, "Theranos voided one in every 10 test results conducted on behalf of Walgreens", Michael Johnsen, Nov. 16, 2016

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