Case: 1:22-cv-04753 Document #: 1 Filed: 09/06/22 Page 1 of 9 PageID #:1
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
`
`
`
`WALGREEN CO.,
`
`
`
`
`
`
`
`
`Plaintiff,
`
`
`
`
`
`
`v.
`
`
`
`
`
`
`
`
`
`
`
`
`
`ADURO PRODUCTS, LLC,
`
`
`
`
`
`
`
`
`
`
`
`
`Defendant.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`
`COMPLAINT
`
`Case No. 1:22-cv-04753
`
`JURY DEMANDED
`
`Walgreen Co. (“Walgreens”), by and through its undersigned attorneys, hereby files this
`
`Complaint for breach of contract against Aduro Products, LLC (“Aduro”), alleging as follows:
`
`I.
`
`NATURE OF THE CASE
`
`1.
`
`This is an action for breach of contract or, alternatively, unjust enrichment. It arises
`
`from Aduro’s breach of its promises and obligations pursuant to the parties’ contracts and
`
`agreements. Specifically, Aduro sold UV light tech accessories, namely Tech Theory UV lights
`
`and UV mini wands (collectively, the “Tech Accessories”), to Walgreens on a guaranteed-sale
`
`basis. Aduro specifically agreed to: (1) refund Walgreens to the extent that the Tech Accessories
`
`did not meet agreed-to benchmarks and unsold units of Tech Accessories were ultimately returned
`
`to Aduro; and (2) pay any amounts that a post-audit of the parties’ transactions performed by
`
`Walgreens found that it owed. In each of these regards, Aduro has failed to live up to its agreements
`
`with Walgreens.
`
`2.
`
`As a direct and proximate result of Aduro’s breaches of contract, Walgreens has
`
`suffered damages in an amount to be proven at trial, but not less than $408,000.41. This amount
`
`

`

`Case: 1:22-cv-04753 Document #: 1 Filed: 09/06/22 Page 2 of 9 PageID #:2
`
`accounts for offsets that Walgreens has applied to Aduro’s account with Walgreens, as the parties
`
`agreed that Walgreens could do. Walgreens files this lawsuit to recover those damages.
`
`II.
`
`THE PARTIES
`
`3.
`
`Walgreens is an Illinois corporation with its principal place of business at 200
`
`Wilmot Road, Deerfield, Illinois, 60015. Walgreens is in the business of providing consumer
`
`goods and services, as well as pharmacy, health and wellness services, through thousands of retail
`
`drugstores throughout the United States.
`
`4.
`
`Aduro is an active, New York limited liability company with its principal place of
`
`business at 250 Liberty Street, Metuchen, New Jersey, 08840. Aduro is engaged primarily in the
`
`production and distribution of electronics accessories. On information and belief, and based on
`
`Walgreens’ research, including review of the public record through New York’s Department of
`
`State, Division of Corporations, and New Jersey’s Department of the Treasury, Division of
`
`Revenue and Enterprise Services, Aduro’s members are not citizens of Illinois. See Carolina Cas.
`
`Ins. Co. v. Team Equip., Inc., 741 F.3d 1082, 1086 (9th Cir. 2014) (“[B]ecause the information
`
`necessary to establish the diversity of the citizenship of some of the defendants was not reasonably
`
`available to plaintiff, we conclude that the court should have permitted Carolina to plead its
`
`jurisdictional allegations as to those defendants on information and belief and without
`
`affirmatively asserting those defendants’ citizenship.”); Lincoln Ben. Life Co. v. AEI Life, LLC,
`
`800 F.3d 99, 108 (3d Cir. 2015) (“If, after this inquiry [of public records], the plaintiff has no
`
`reason to believe that any of the association’s members share its state of citizenship, it may allege
`
`complete diversity in good faith.”); Employers Preferred Ins. Co. v. C&K Hotel Grp., LLC, No.
`
`15-cv-1500, 2016 U.S. Dist. LEXIS 23259 (C.D. Ill. Feb. 25, 2016) (same).
`
`2
`
`

`

`Case: 1:22-cv-04753 Document #: 1 Filed: 09/06/22 Page 3 of 9 PageID #:3
`
`III.
`
`JURISDICTION AND VENUE
`
`5.
`
`This Court has jurisdiction over this dispute pursuant to 28 U.S.C. § 1332 because
`
`the citizenship of Walgreens and Aduro is diverse and the amount in controversy is in excess of
`
`$75,000.
`
`6.
`
`Venue is proper in the Northern District of Illinois pursuant to 28 U.S.C.
`
`§ 1391(b)(2) because a substantial part of the events giving rise to the claims made in this lawsuit
`
`occurred within the Northern District of Illinois. Moreover, in the parties’ written agreement
`
`(discussed further below), they “consent[ed] to the exclusive jurisdiction of the courts of the State
`
`of Illinois or Federal District Court of the Northern District of Illinois and agree[d] to waive all
`
`objections as to venue and forum non conveniens.”
`
`IV.
`
`FACTUAL ALLEGATIONS
`
`The Parties’ Agreements
`
`In 2020, Walgreens and Aduro agreed that Walgreens would buy Tech Accessories
`
`A.
`
`7.
`
`from Aduro and stock the Tech Accessories at its stores for resale to consumers. Walgreens and
`
`Aduro agreed that these purchases by Walgreens would be pursuant to certain written agreements.
`
`8.
`
`The written agreement through which all purchases by Walgreens from Aduro were
`
`made was the Walgreen Co. General Trade and Electronic Data Interchange Agreement (the
`
`“GTA”). Aduro, through its authorized representative Gary Levy, signed the GTA with an
`
`effective date of May 19, 2020.
`
`9.
`
`The GTA states in its preamble that: “The terms and conditions contained herein
`
`shall apply to all merchandise . . . sold by Vendor [Aduro], directly or indirectly through its
`
`distributors, to Walgreen[s].”
`
`10.
`
`The GTA further provides that: “[Aduro’s] performance shall be in accordance with
`
`these terms, dating and conditions. Any other terms in [Aduro’s] acceptance are rejected unless
`
`3
`
`

`

`Case: 1:22-cv-04753 Document #: 1 Filed: 09/06/22 Page 4 of 9 PageID #:4
`
`agreed to in writing and signed by Walgreen[s’] authorized representative.” Further clarifying that
`
`the GTA controls the parties’ relationship, it provides that: “In the event of a conflict between
`
`these terms or any purchase order issued by Walgreen[s], and any document issued by [Aduro],
`
`the terms of this Agreement shall control.” The GTA also provides that: “No oral modification or
`
`waiver of any of the provisions of this Agreement shall be binding on either party.”
`
`11.
`
`The parties never signed any written modification of the GTA that contradicts or
`
`modifies any of its terms.
`
`12.
`
`The GTA states that “if a purchase order is designated as a ‘Guaranteed Sale,’ . . .
`
`Walgreen[s] shall not be obligated to pay for any merchandise until after it is sold by Walgreen[s]
`
`in accordance with terms agreed upon by the parties.”
`
`13.
`
` The GTA also states that “Walgreen[s] shall have the unrestricted right to rescind
`
`its purchase of the merchandise from [Aduro] both before and after acceptance of such
`
`merchandise by Walgreen[s] and return any remaining merchandise to [Aduro] for full refund of
`
`any amounts paid for such merchandise.”
`
`14.
`
`On July 23, 2020, Walgreens and Aduro entered into a Merchandise Vendor
`
`Agreement (the “Merchandise Agreement”).
`
`15.
`
`The Merchandise Agreement adds specific agreed-upon terms to the parties’
`
`contract. Specifically, the Merchandise Agreement states that: “The Merchandise will be sold by
`
`[Aduro] to Walgreen[s] on a ‘Guaranteed Sale’ basis. At its sole discretion, Walgreen[s] may
`
`return . . . any unsold merchandise, and Walgreen[s] shall be entitled to a credit from Vendor for
`
`the cost of such Merchandise.”
`
`16.
`
`Thus, consistent with the GTA and Merchandise Agreement, all purchases by
`
`Walgreens from Aduro were on a “Guaranteed Sale” basis such that Walgreens was not obligated
`
`4
`
`

`

`Case: 1:22-cv-04753 Document #: 1 Filed: 09/06/22 Page 5 of 9 PageID #:5
`
`to pay for the merchandise until it was sold pursuant to agreed-upon terms. Moreover, if
`
`Walgreens’ sales expectations were not met, Walgreens had a right to return the merchandise to
`
`Aduro (with no payment obligation having arisen), which would provide a corresponding refund
`
`to Walgreens for the Tech Accessories and costs incurred by Walgreens to return the unsold Tech
`
`Accessories to Aduro, including the agreed-upon upcharge fee and applicable freight expenses.1
`
`17.
`
`The Merchandise Agreement further provides that “[Aduro] will pay four percent
`
`(4%) of total purchases of Merchandise towards co-op advertising support (‘Co-op Support’) (i.e.,
`
`Rotos, TLCs, Easy Saver, etc.).”
`
`18.
`
`Lastly, the GTA expressly incorporates Walgreens’ Post Audit Policy. The Post
`
`Audit Policy provides that “Walgreens reserves the right to audit all transactions up to two and
`
`one-half years from the end of the calendar year that the transaction occurred.”
`
`B.
`
`Aduro Breaches its Agreements with Walgreens
`
`19. Walgreens ordered Tech Accessories from Aduro at $8.00-$9.00 per unit, paid for
`
`the items and placed them for sale in its stores. However, the units of Tech Accessories did not all
`
`sell, and some units were returned or never delivered to Walgreens.
`
`20.
`
`Consistent with the terms of the GTA and Merchandise Agreement, Walgreens
`
`returned at least 44,247 units of Tech Accessories to Aduro between April 2021 and August 2021.
`
`Each unit of Tech Accessories that Walgreens returned to Aduro was authorized by the parties’
`
`agreements either because the Tech Accessories did not meet agreed-to benchmarks or because
`
`they were sold to Walgreens on a guaranteed sale basis. Aduro accepted those returned items, for
`
`which Walgreens had paid Aduro approximately $380,000.00.
`
`
`1
`Pursuant to the Merchandise Agreement, the upcharge fee was either 4% (distribution
`center returns), 6% (retail merchandise returned at the end of its life cycle), or 8% (retail
`merchandise returned in the ordinary course of business).
`5
`
`

`

`Case: 1:22-cv-04753 Document #: 1 Filed: 09/06/22 Page 6 of 9 PageID #:6
`
`21. Walgreens incurred costs when it returned unsold Tech Accessories to Aduro.
`
`Consistent with Walgreens’ right to rescind in the GTA, Aduro is responsible to Walgreens for
`
`those costs, including the agreed-upon upcharge fee and freight expenses, which in this case total
`
`approximately $25,000.00.
`
`22.
`
`As a result of the returns referenced in Paragraphs 20 and 21 above, Aduro now
`
`owes Walgreens at least $405,768.21 for the units of Tech Accessories that Walgreens returned to
`
`Aduro. Walgreens demanded this payment from Aduro, but in breach of the parties’ agreements,
`
`Aduro has refused to pay this amount.
`
`23.
`
`There is also a post audit claim that Walgreens sought from Aduro for the Co-op
`
`support which Aduro agreed to pay Walgreens pursuant to the Merchandise Agreement, but which
`
`Walgreens never received, in the amount of $24,248.64. Again, consistent with the parties’
`
`agreements, Walgreens demanded this payment from Aduro. Again, in breach of those agreements,
`
`Aduro has refused to pay these amounts.
`
`24.
`
`In total, Aduro owes Walgreens $430,016.85 arising from its breaches of its
`
`agreements with Walgreens. However, as provided for in the GTA, Walgreens has taken credits
`
`against Aduro’s account with Walgreens to mitigate its damages, reducing the current amount that
`
`Aduro owes Walgreens to $408,000.41.
`
`V.
`
`CAUSES OF ACTION
`
`COUNT I: BREACH OF CONTRACT
`
`25. Walgreens re-alleges as Paragraph 25 of Count I paragraphs 1-24 above.
`
`26. Walgreens and Aduro contracted for Walgreens to buy Tech Accessories from
`
`Aduro on a “Guaranteed Sale” basis. Walgreens agreed to and did pay $8.00-$9.00 per unit of
`
`Tech Accessories.
`
`6
`
`

`

`Case: 1:22-cv-04753 Document #: 1 Filed: 09/06/22 Page 7 of 9 PageID #:7
`
`27. Walgreens and Aduro also contracted that any unsold units of Tech Accessories
`
`could and would be returned to Aduro. Aduro agreed to refund Walgreens the amounts Walgreens
`
`had paid for those units of Tech Accessories, and that Aduro would be responsible for paying
`
`freight costs and an upcharge fee for all returned units of Tech Accessories.
`
`28. Walgreens and Aduro also contracted that Walgreens could seek any amounts
`
`owing after an audit, for up to two and a half years.
`
`29.
`
`The GTA, its incorporated policies, and the Merchandise Agreement are valid and
`
`enforceable contracts.
`
`30. Walgreens fully complied with its obligations pursuant to these contracts.
`
`31.
`
`Aduro, however, breached the terms of the parties’ agreements, including by:
`
`a.
`
`Accepting the return of unsold Tech Accessories, but refusing to refund the
`
`amounts already paid by Walgreens and refusing to reimburse Walgreens
`
`for the incurred freight costs and related administrative fees; and
`
`b.
`
`Failing to make payment on amounts owing following an audit performed
`
`by Walgreens.
`
`32.
`
`Aduro’s breaches proximately caused Walgreens damages in the amount of
`
`$430,016.85, of which Aduro owes Walgreens at least $408,000.41, after accounting for credits
`
`taken by Walgreens pursuant to the GTA.
`
`WHEREFORE, Walgreens prays that judgment be entered in its favor and against Aduro
`
`for damages in an amount to be determined by the Court, but not less than $408,000.41, plus pre-
`
`judgment interest, and for such other relief as the Court deems just and proper.
`
`7
`
`

`

`Case: 1:22-cv-04753 Document #: 1 Filed: 09/06/22 Page 8 of 9 PageID #:8
`
`COUNT II: UNJUST ENTRICHMENT (PLED IN THE ALTERNATIVE)
`
`33. Walgreens re-alleges as Paragraph 33 of Count II the foregoing allegations, except
`
`those asserting the existence and breach of a written contract between the parties, , as if fully set
`
`forth herein.
`
`34.
`
`By accepting return of approximately 44,247 units of Tech Accessories from
`
`Walgreens but refusing to refund amounts already paid by Walgreens for those goods, and
`
`benefitting by the cost to Walgreens in making those returns, Aduro has unjustly received a benefit
`
`from Walgreens.
`
`35.
`
`Aduro’s benefit was received to Walgreens’ detriment, as Walgreens paid for the
`
`units of Tech Accessories that Aduro now has and may re-sell. Additionally, Walgreens incurred
`
`the costs associated with returning those units of Tech Accessories to Aduro.
`
`36.
`
`Aduro was also unjustly enriched by refusing to make payment for amounts owed
`
`to Walgreens, as found in Walgreens’ audit.
`
`37.
`
`Allowing Aduro to retain the benefits of its own wrongdoing, as alleged herein,
`
`would violate fundamental principles of justice, equity and good conscience, including by
`
`affording Aduro the opportunity to sell the returned items twice.
`
`WHEREFORE, Walgreens prays that judgment be entered in its favor and against Aduro
`
`for damages in an amount to be determined by the Court, but not less than $408,000.41, plus pre-
`
`judgment interest, and for such other relief as the Court deems just and proper.
`
`VI.
`
`JURY DEMAND
`
`Pursuant to Federal Rule of Civil Procedure 38, Walgreen Co. hereby demands trial by jury
`
`in this case.
`
`
`
`8
`
`

`

`Case: 1:22-cv-04753 Document #: 1 Filed: 09/06/22 Page 9 of 9 PageID #:9
`
`Respectfully submitted,
`
`WALGREEN CO.
`
`By:
`
` s/ Robert M. Andalman
`One of its Attorneys
`
`
`
`
`
`
`
`Robert M. Andalman (ARDC #6209454)
`Rachael Blackburn (ARDC #6277142)
`A&G Law LLC
`542 S. Dearborn St., 10th Floor
`Chicago, IL 60605
`(312) 341-3900
`randalman@aandglaw.com
`rblackburn@aandglaw.com
`
`9
`
`