Ontario Provincial Council of Carpenters’ Pension Trust Fund, et al. v. S. Robson Walton, et al.

On February 2, 2022, BLB&G filed an amended stockholder derivative complaint (the “Complaint”) in the Delaware Court of Chancery on behalf of nominal defendant Walmart Inc. (“Walmart” or the “Company”), for Plaintiffs the Police & Fire Retirement System of the City of Detroit and Norfolk County Retirement System. The Complaint alleges that current and former officers and directors of Walmart, as well as the Company’s controlling stockholders, breached their fiduciary duties in connection with the Company’s contribution to the opioid epidemic ravaging the United States.

In particular, the Complaint alleges that the Defendants failed to implement policies and controls to ensure compliance with the federal Controlled Substances Act and related regulations (collectively “the CSA”), as well as a 2011 Memorandum of Agreement (“2011 MOA”) with the Drug Enforcement Administration (“DEA”). The relevant provisions of the CSA and the 2011 MOA were specifically designed to prevent the loss or misuse of controlled substances, with Walmart acting both as a distributor and dispenser of controlled substances, including by requiring Walmart to have a monitoring system for suspicious orders of controlled substances and also to report the suspicious orders to the DEA. The Complaint alleged that Walmart failed to comply with the CSA or the 2011 MOA and that Defendants turned a blind eye to the issue until Walmart was threatened with criminal and civil liability. As a result, Walmart has been sued (i) by the United States Department of Justice for failure to comply with the CSA for improper distribution and dispensing of controlled substances, including opioids, and (ii) in the National Opioid MDL, for contributing to the national opioid crisis by failing to comply with the CSA and failing to report suspicious orders. To resolve the National Opioid MDL, in November 2022, Walmart agreed to a $3.1 billion nationwide opioid settlement framework (the “Settlement”).

Before filing the Complaint, Plaintiffs conducted an extensive investigation, including successfully trying a books-and-records action against Walmart to compel the production of internal records. The Complaint seeks to require Defendants to take action to have Walmart comply with the CSA and to hold Defendants liable for their breaches of fiduciary duty, which have already caused substantial damages to the Company, like the Settlement and injury to its reputation, and subjected it to numerous investigations and lawsuits. The public version of the Complaint is accessible under the Case Documents section of this page.

Defendants’ Motion to Dismiss the Complaint was mostly denied in two landmark opinions in April 2023. The opinion discussing the Complaint’s claims relating to the 2011 MOA and claims relating to Walmart’s compliance with its obligations as a dispenser under the CSA is available under the Case Documents Section of this page.

In June 2023, the Court stayed this case to allow a special litigation committee to conduct an internal investigation on behalf of Walmart. The committee will issue its report in 2024.