Wal-Mart's Costs Connected To Mexican Bribery Case Reach $400M

by Mark Friedman  on Monday, Dec. 9, 2013 12:00 am  

Allegations that Wal-Mart’s Mexican division paid brides are at the center of lawsuits that are making their way through the courts.

Five other shareholder derivative lawsuits were consolidated into that case.

Only days later, the California State Teachers’ Retirement System filed a lawsuit in the Delaware Court of Chancery with similar allegations of wrongdoing tied to the bribery scandal. Seven derivative actions were consolidated into the lawsuit.

Meanwhile, in the Texarkana case, one of Wal-Mart’s attorneys, Jonathan Dickey of New York, asked that the case be stayed while the lawsuit in Delaware makes its way through the courts.

The cases “involve substantially the same claims and substantially the same issues,” Dickey said in a September 2012 hearing before U.S. District Judge Susan Hickey in El Dorado.

Attorney Corey McGaha of Little Rock, who is one of the attorneys representing the plaintiff Cottrell, said during the hearing that the case should remain in federal court because he raised claims that can’t be settled in state court.

He also pointed out that it wasn’t unusual for two shareholder derivative cases to proceed in two different courts at the same time.

“What we have is this bribery scandal that’s an important event in Wal-Mart’s history,” McGaha said at the hearing. “And [Wal-Mart’s attorneys] are coming here to tell you that that shouldn’t be adjudicated in an Arkansas federal court where Wal-Mart essentially was born, and where it grew up; where the documents are going to be.”

But Hickey wasn’t persuaded to allow the case to move forward in federal court.

“The claims and parties in this action and the Delaware action are almost identical, and the issues involved overlap substantially,” she wrote in her order on Nov. 20, 2012.

She ordered that the federal case be stayed pending the outcome of the Delaware court case, which she said was “moving forward.”

But the Delaware case has made little progress. In October, a Delaware judge ruled on which Wal-Mart documents could be released to the shareholders for their lawsuit.

Wal-Mart’s spokesman Hargrove said both Wal-Mart and the plaintiffs have appealed the ruling to the Delaware Supreme Court. Wal-Mart wants to release fewer documents and the plaintiffs want more.



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