--- title: "Civil suits by investors, patients and Walgreens" language: en canonical: https://dossiertwist.com/dossiers/theranos-inc/civil-suits/ as_of: 2026-10-21 keywords: ["Theranos","RealTime Cures","Elizabeth Holmes","Ramesh Balwani","Sunny Balwani","Walgreen Co.","Walgreens Boots Alliance","Safeway","Theranos Wellness Center","Edison device","Nanotainer","CLIA","Centers for Medicare & Medicaid Services","SEC v. Holmes","United States v. Holmes","Fortress Investment Group","Theranos IP Company","Labrador Diagnostics","Partner Fund Management","Haemanthus"] --- # Civil suits by investors, patients and Walgreens **Question.** Who sued Theranos and its executives in civil courts, and how did those suits end? **Answer.** Investors, patients and Walgreens sued Theranos from 2016. The Partner Fund investors' Delaware suits for fraud and breach of fiduciary duty were settled in May 2017, and a federal court refused in 2018 to certify a class of indirect investors. Arizona patients pursued a class action against Theranos, Holmes, Balwani and two Walgreens companies; the court let fraud-by-omission and RICO wire-fraud claims proceed in 2018, and in 2024 all defendants except Holmes settled, Walgreens paying $44 million while denying the allegations. Walgreens' own suits ended in a 2017 settlement without a finding of liability and a $5,000,000 judgment in 2018. ## Investor suits - Analysis: In October 2016 the investors Partner Investments, L.P., PFM Healthcare Master Fund, L.P. and PFM Healthcare Principals Fund, L.P. sued Theranos, Holmes and Balwani in the Delaware Court of Chancery (C.A. No. 12816-VCL) for fraud, negligent misrepresentation, indemnification and violations of Delaware and California law. In April 2017 they sued Theranos, Holmes and directors Fabrizio Bonanni, William Foege and Daniel Warmenhoven for breach of fiduciary duty, self-dealing and waste (C.A. No. 2017-0262-JTL). These were the plaintiffs' claims and were never decided on the merits. According to an online encyclopaedia, Theranos said the funds had mischaracterised its exchange offer, and on settling its general counsel said the company was confident it would have prevailed. The parties settled in May 2017 and both actions were dismissed by stipulation; in April 2018 the court denied a documentary filmmaker access to unfiled deposition videos from the cases. [src-032] [src-083] - Analysis: The SEC's complaints record the 2017 settlement of an investor's securities-fraud suit against Theranos, Holmes and Balwani. Several investment funds released their claims against Theranos when they took part in the 2017 share exchange. [src-003] [src-002] [src-073] - Analysis: Two indirect investors, who had bought interests in funds that purchased Theranos stock, filed a class action (N.D. Cal. No. 16-cv-06822-NC) on November 28, 2016 against Theranos, Holmes and Balwani for fraud, misrepresentation and market manipulation. The court dismissed the claim under sections 25401 and 25501 of the California Corporations Code, excluded direct investors from the proposed class and refused a July 2017 request to certify a limited-fund class or freeze the defendants' funds. On May 31, 2018 Magistrate Judge Nathanael M. Cousins denied class certification, finding that questions of reliance defeated predominance and that individual actions were superior; the allegations were not decided. [src-073] ## The Arizona patients - Analysis: Patients who bought Theranos tests brought a consolidated class action in the District of Arizona, In re Arizona Theranos, Inc., Litigation (No. 2:16-cv-2138), against Theranos, Holmes, Balwani, Walgreens Boots Alliance, Inc. and Walgreen Arizona Drug Co. As the court summarised their allegations, Walgreens invested $140 million in Theranos, marketed its unreliable tests, including a September 2013 joint release promoting "CLIA-certified laboratory services", concealed material information and drew the blood in its stores; 90 percent of the testing was done at the Scottsdale laboratory; and state inspectors found deficiencies there in April 2015, which Theranos called routine and said it had fixed. Walgreens and Balwani denied all the allegations when they settled. [src-058] - Analysis: On April 10, 2018 Judge H. Russel Holland dismissed, without leave to amend, the RICO claims based on mail fraud and several affirmative-misrepresentation claims against Walgreens and Theranos, but allowed fraud-by-omission claims against all defendants, negligence, contract and unjust-enrichment claims against Walgreens and Theranos, aiding-and-abetting claims against Walgreens and RICO claims based on wire fraud against all defendants to proceed. He held that the Arizona Attorney General's consent decree, under which Theranos had denied the allegations but refunded consumers' costs, did not moot the claims, because Walgreens, Holmes and Balwani had disgorged no profits and the decree did not address punitive damages. [src-058] [src-031] - Analysis: The court certified a class of test purchasers on March 6, 2020. All parties except Holmes settled: Walgreens Boots Alliance and Walgreen Arizona Drug Co. paid $44 million into a non-reversionary fund intended to repay consumers about twice their testing costs, with about $1,000 more for those whose blood was drawn at Walgreens; Balwani withdrew his claims to Theranos's remaining assets; and Theranos's assignee for the benefit of creditors contributed about $1.33 million. Walgreens and Balwani deny the allegations. Judge David G. Campbell gave final approval on February 6, 2024. [src-074] [src-080] [src-116] ## Walgreens - Analysis: Walgreen Co. sued in Delaware on November 8, 2016 to recover the $100 million Innovation Fee and the $40 million paid for the note; Theranos announced on August 1, 2017 that the suit would be dismissed with no finding or implication of liability. A second suit, filed under seal on July 2, 2018, ended on October 1, 2018 with a $5,000,000 judgment against Theranos, whose basis was not retrieved. Walgreens then filed a claim in the assignment for the benefit of creditors, allowed at $45,000,000 in 2023. [src-041] [src-042] [src-059] [src-080] ## Sources - [src-032] Memorandum opinion, Partner Investments, L.P. v. Theranos, Inc., Del. Ch. C.A. No. 12816-VCL and No. 2017-0262-JTL (April 23, 2018), Court of Chancery of the State of Delaware, 2018-04-23 - [src-083] Other source · src-083 - [src-003] Complaint, SEC v. Ramesh "Sunny" Balwani, N.D. Cal. Case 5:18-cv-01603, U.S. Securities and Exchange Commission, 2018-03-14 - [src-002] Complaint, SEC v. Elizabeth Holmes and Theranos, Inc., N.D. Cal. Case 5:18-cv-01602, U.S. Securities and Exchange Commission, 2018-03-14 - [src-073] Court record source · src-073 - [src-058] Order on motions to dismiss, In re Arizona Theranos, Inc., Litigation, D. Ariz. No. 2:16-cv-2138 (April 10, 2018), U.S. District Court for the District of Arizona (GPO copy), 2018-04-10 - [src-031] Arizona Attorney General list of past consumer settlements (Theranos entry), Arizona Attorney General - [src-074] Court record source · src-074 - [src-080] Court record source · src-080 - [src-116] Other source · src-116 - [src-041] Report and recommendation, Walgreen Co. v. Theranos, Inc., D. Del. C.A. No. 16-1040-RGA-MPT (July 27, 2017), U.S. District Court for the District of Delaware, 2017-07-27 - [src-042] Media source · src-042 - [src-059] Court record source · src-059