Illinois Appellate Court Revives Tortious-Interference Claim in $600 Million State Pharmacy Contract Dispute

CHICAGO (LN) — The Illinois Appellate Court on Tuesday reversed the dismissal of a tortious-interference claim by 3R Health Care Products, finding that 3R adequately alleged it had a reasonable business expectancy in the $600 million-plus contract and that Cardinal Health knew about it.

3R, a certified disadvantaged business enterprise, alleged Cardinal Health obtained two DBE waivers from the state by misrepresenting 3R's capabilities after rejecting 3R as a subcontractor because, as Cardinal put it in a June 2021 meeting, "it would not benefit [Cardinal] to use [3R's] services." The appellate court upheld the dismissal of breach-of-contract and declaratory-judgment counts, finding 3R had no standing as a third-party beneficiary to the contract between Cardinal and the Illinois Department of Central Management Services. But the court reversed the tortious-interference dismissal, finding 3R's allegations sufficient to plead an actionable business expectancy. The court found 3R's position unlike that of a typical bidder. The complaint alleged 3R was the only qualified DBE for the work, and Cardinal was under a mandatory duty under the Business Enterprise for Minorities, Women, and Persons with Disabilities Act to make a good-faith effort to include a DBE. "Cardinal was not 'free to walk away for whatever reason' from discussions with 3R," Justice Ellis wrote for the panel, quoting precedent. "The BEP Act does not require ultimate inclusion of DBEs, but it does mandate a good-faith effort at inclusion." Cardinal told the state in its utilization plan that five DBE companies declined to submit proposals, two were non-responsive, and one was rejected for failure to provide information. The plan also stated that 3R could not perform as a subcontractor because of its "inability to meet contract requirements and lack of needed information." The court said 3R's allegation that it was the sole qualified DBE was pleaded on "information and belief," but that was sufficient stage, where 3R lacked access to discovery tools. The court remanded the tortious-interference count for further proceedings. The cause was affirmed in part and reversed in part. Justice Ellis authored the opinion. Presiding Justice Van Tine and Justice McBride concurred.