Bloomberg News

Express Scripts Sues E&Y Alleging Trade Secret Theft

February 15, 2013

Express Scripts (ESRX:US) Inc. sued the accounting firm Ernst & Young LLP and one of its partners for the alleged theft of trade secrets and misappropriation of the pharmacy benefit manager’s confidential and proprietary data.

The Express Scripts Holding Co. unit said in a complaint filed yesterday in state court in Clayton, Missouri, that it learned last year that accounting firm partner Don Gravlin had been “sneaking” into its St. Louis headquarters and e-mailing documents to a private Google account via the account of an Ernst & Young consultant.

“E&Y and Gravlin were possessed with an evil motive,” the benefits manager said in its complaint. The company is seeking punitive damages to deter future similar conduct by Ernst & Young and other accounting firms.

The accountants allegedly took the equivalent of more than 20,000 pages of data, including pricing information, business strategy, projections and “performance metrics” documents, to aid development of Ernst & Young’s own health-care business segment, which includes Express Scripts and Medco Health Solutions Inc. (MHS:US), which it acquired last year, as well as some of their competitors.

“When we were notified about this matter several months ago, we immediately conducted an investigation and concluded there was a violation of EY policies and the company’s policies,” Amy Call Well, an Ernst & Young spokeswoman, said in an e-mailed statement.

“The individual at the center of these allegations is no longer with the firm,” she said.

Gravlin, whom the complaint identifies as living in the St. Louis suburb of Caseyville, Illinois, didn’t immediately respond to a voice-mail message seeking comment on the lawsuit.

Trade-Secret Law

Claiming the firm and Gravlin violated Missouri computer- tampering and trade-secret protection laws, Express Scripts seeks unspecified money damages plus a court order barring Ernst & Young from the use or disclosure of any of the information it allegedly misappropriated.

Call Well said the firm, a New York-based unit of London- based Ernst & Young International, is unaware of any instance in which the information was used for any purpose by the accounting firm or its personnel.

“We will vigorously contest the claims in the complaint,” she said.

The case is Express Scripts Inc. v. Ernst & Young LLP, 13SL-CC00537, St. Louis County, Missouri, Circuit Court, Division 20 (Clayton).

To contact the reporter on this story: Andrew Harris in the Chicago federal courthouse at

aharris16@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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