Arizona Attorney General Announces Intention to Sue Theranos for Fraud

Elizabeth DiNardo, Esq. | Associate Counsel

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Photo credit: businesswire.com

On January 12, 2017 Arizona Attorney General Mark Brnovich quietly announced, via the state’s website, that he will be pursuing a civil suit for consumer fraud against healthcare technology company, Theranos Inc. The announcement of this suit comes after a string of bad news concerning the healthcare start-up, stemming from a damning investigative article from the Wall Street Journal in October 2015, which exposed the inherent problems with the company’s non-invasive blood testing technology.

 Prior to the explosive Wall Street Times, article Theranos was seemingly an unstoppable presence in the health-tech field, inking a deal with Walgreens in September 2013 to implement Theranos blood-drawing sites in 40 Walgreens locations in Phoenix, Arizona. However, in June 2016 Walgreen terminated its relationship with the company and just a month later, in July 2016, Theranos received sanctions from the Centers for Medicare and Medicaid Services. These sanctions included a renunciation of the company’s CLIA Certificate, which in effect equates to prohibiting Theranos’ founder, Elizabeth Holmes, from owning and operating a lab for two years.

 In the positing to the state’s website, Brnovich elaborated on the suit saying that the goal was to bring a cause of action under the Arizona Consumer Fraud Act to recover civil penalties, disgorgement, restitution, attorneys’ fees, costs, potential injunctive relief and other equitable relief.

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