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Arizona-Based Blood Testing Company Entangled in Legal Battles

Max Kellogg | Legal Staff Writer

Starting in late May 2016, the blood testing company, Theranos Inc., has faced a number of lawsuits. At that time, three class-action litigations were filed within a four-day window. Since, even more lawsuits have emerged against the company, including those involving its investors and U.S. drug store giant, Walgreens. 

Theranos specializes in providing “non-invasive” blood testing, which was sold to individuals at Walgreens pharmacies. Theranos claimed that its proprietary blood testing technology could analyze dozens of diagnostic tests with a single drop of blood. As questions began surfacing regarding the accuracy of the company’s finger-prick tests, on May 19, 2016 the company issued a public announcement stating that it potentially provided erroneous results to tens of thousands of patients. The announcement prompted the three class-action suits to be filed.

Walgreens terminated its relationship with Theranos the month following the announcement. Thereafter, it sued the company for $140 million in damages arising from a breach of contract claim. In the complaint, Walgreens argues that it was mislead by Theranos concerning the proprietary blood testing technology when the contract was executed.

Most recently, on Monday, November 28, 2016, Theranos’ investors filed a lawsuit against the company. Robert Colman and Hilary Taubman-Dye, on behalf of themselves and those similarly situated, claim that the Chief Executive Officer of Theranos, Elizabeth Holmes, lied when she pitched the blood testing technology to investors. They assert that the accuracy of the testing was overstated and the test itself was flawed. In the lawsuit, the plaintiffs cite to a Wall Street Journal article, which provided that not only did some doctors not trust the results, even Theranos employees were unsure of the technology’s accuracy. The plaintiffs seek class action status for all those who invested with Theranos’ securities from July 29, 2013 to October 2, 2016.

Theranos shut down all lab operations in October 2016 after numerous U.S. regulators investigated the company and concluded it failed to comply with standards. In addition, the company has closed all operations in Walgreen’s Wellness Centers and has started focusing on developing a new product.

 This case is: Colman v. Theranos, 16-cv-06822, U.S. District Court, Northern California (San Francisco).

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