|Delaware Court of Chancery
|Edward G. Timlin
|Daniel Meyer, Mae Oberste
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 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 diversion 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 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 (“DOJ”) 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.
Plaintiffs conducted an extensive investigation prior to filing the Complaint, 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, 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.
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