Caption: In re Walgreens Boots Alliance Securities Litigation.
Case No.: 24-cv-5907
Jurisdiction: U.S. District Court, Northern District of Illinois, Eastern Division
Judge: Hon. Mary M. Rowland
Summary
On January 5, 2026, Judge Mary M. Rowland granted in part and denied in part defendants’ motion to dismiss the securities class action against Walgreens Boots Alliance. The Court allowed Exchange Act claims under Section 10(b) and Rule 10b-5 to proceed based on a limited set of alleged misstatements, while dismissing the majority of challenged statements. Plaintiffs were granted leave to amend.
Allegations Against Walgreens Boots Alliance
Plaintiffs alleged that Walgreens and certain executives made false or misleading statements about the viability of the company’s VillageMD primary care strategy. The complaint focused on statements concerning clinic rollout, staffing conditions, insurance acceptance, and growth prospects during the class period from October 2021 through July 2024. Plaintiffs said these statements concealed internal knowledge that the strategy was failing.
Defendants’ Motion to Dismiss
Walgreens and individual defendants argued that the complaint failed to plead falsity and scienter with particularity under the PSLRA. They contended that many statements were accurate, forward-looking, protected by the safe harbor, or amounted to non-actionable puffery or opinion. Defendants also moved to strike an appendix submitted with plaintiffs’ opposition.
Plaintiffs’ Opposition
Plaintiffs argued that defendants’ statements about clinic expansion, labor conditions, and insurance coverage were misleading in light of internal data and confidential witness accounts. They maintained that defendants had a duty to disclose adverse facts once they spoke on these topics and that senior executives acted with knowledge or reckless disregard of the truth.
Court’s Ruling
The Court denied the motion to dismiss as to three statements concerning clinic expansion after an alleged nationwide halt, labor conditions at VillageMD, and projected clinic targets. All other challenged statements were dismissed. Control-person claims under Section 20(a) survived only to the extent they were tied to the remaining primary violations. The motion to strike was denied.
Court’s Rationale
Falsity: The Court held that most statements were not misleading, were forward-looking, or constituted puffery. However, statements suggesting continued clinic expansion and no labor issues were plausibly misleading if a nationwide hold and staffing problems already existed.
Scienter: The Court found a strong inference of scienter as to statements about clinic expansion and labor conditions, given allegations of executive access to detailed performance data. Scienter was not adequately alleged for statements about insurance acceptance.
Section 20(a): Derivative claims were dismissed except as tied to the surviving Section 10(b) claims.
Other Issues: The Court denied the motion to strike and granted leave to amend, cautioning plaintiffs to comply with PSLRA requirements.
Case Status
The case continues in part. Plaintiffs may file an amended complaint consistent with the Court’s order, while claims against certain individual defendants were dismissed without prejudice.
