Walmart Appeals $101M Award in PPE Supply Case, Seeks New Trial

The case involved Walmart’s 2020 deal to buy millions of dollars’ worth of nitrile gloves for employees and customers. (Shutterstock)

A U.S. District Court judge recently rejected Walmart Inc.’s request to toss a jury verdict last year that awarded $101.2 million to its supplier of nitrile gloves ordered during the pandemic.

On April 14, Walmart filed a notice of appeal to the 8th U.S. Circuit Court of Appeals in St. Louis.

The Bentonville retailer had asked U.S. District Judge Timothy Brooks for a new trial, and argued in court filings that the case brought by London Luxury, a supplier of nitrile gloves, was built on fraud and that the jury’s verdict was wrong. The filings claim the verdicts against Walmart were not supported by sufficient evidence.

Brooks found otherwise. “The jury’s verdicts are consistent with the law and the evidence presented at trial,” he wrote in his 46-page decision.

In April 2024, a jury in U.S. District Court for the Western District of Arkansas found that Walmart breached its $500 million contract with London Luxury and awarded London Luxury $101.2 million, one of the largest verdicts for breach of contract in Arkansas history.

Walmart had made a deal in 2020 to buy millions of dollars’ worth of nitrile gloves for its employees and customers from its supplier, London Luxury.

Walmart argued during the trial that there were delays in shipping and issues with factory sourcing and quality of the gloves.

But London Luxury said during the trial that Walmart had planned to sell the excess gloves to another supplier, Heypex Global Inc. of Rogers, in a business-to-business transaction expected to generate a $72 million profit.

Walmart “would just buy it, and turn around and sell. They wouldn’t have to do much,” Brendon DeMay, an attorney for London Luxury, told Arkansas Business last year. “Not only could they get rid of this excess inventory, but they would make an easy profit.”

Walmart was so wrapped up in the B2B transaction that it took the “highly unusual step of issuing a letter of credit to London Luxury — effectively guaranteeing payment to London Luxury’s manufacturers,” Brooks wrote.

But problems with the deal soon arose.

After Walmart placed a $500 million noncancelable order with London Luxury in 2021, Heypex decided it no longer wanted the gloves. Prices on personal protective equipment had fallen by the end of that year.

Brooks found “that more than enough evidence was presented at trial to allow a reasonable jury to conclude that London Luxury did not materially breach the contract through shipping delays (and/or that Walmart waived any timeliness issues related to workflow), poor factory sourcing, or failed product testing.”

The jury found in favor of Walmart on its counterclaim accusing London Luxury’s CEO, Marc Jason, of interfering with Walmart’s employment contract with Garrett Small, who was Walmart’s senior sourcing director and main negotiator of the deal with London Luxury. Small no longer works for Walmart. The jury awarded Walmart $350,000 after finding that London Luxury engaged in tortious conduct. That was the amount of Small’s annual salary and benefits, Brooks’ order said.

Brooks said in his order that he won’t order a new trial and found that the “jury’s verdict was not against the weight of the evidence, nor did it result in a miscarriage of justice.”

Adding to the Award

Brooks also awarded London Luxury another $24.1 million for pre-judgment interest and attorneys fees.

But the $5.4 million awarded for attorneys fees was less than London Luxury’s attorneys had requested. The law firm for London Luxury, Holwell Shuster & Goldberg LLP of New York, participated through a contingency-fee arrangement and said in a filing that it was entitled to 33.33% of the gross amount recovered. It wanted the judgment amount to be increased to cover the fees. If that amount isn’t awarded, London Luxury asked that the firm’s attorneys be awarded $17.4 million for the time spent on the case.

DeMay, a partner at Holwell Shuster & Goldberg, tried the case with Priyanka Timblo, also a partner at the firm, and Scott Richardson of McDaniel Wolff of Little Rock.

Brooks said in his order that during the case he became “very familiar with the high-quality lawyering displayed by HSG and McDaniel Wolff.”

But he had to calculate the award for attorneys fees based on the number of hours worked at the rate that “a highly skilled, highly experienced litigator would charge in” northwest Arkansas for complex, specialty litigation.

HSG spent more than 21,000 hours on the case, resulting in an award of $5.1 million for attorneys fees, and McDaniel Wolff will receive $291,000 for attorneys fees.

Brooks also awarded London Luxury $18.7 million for pre-judgment interest.

Walmart said in a statement to Arkansas Business that it was pleased that Brooks “rejected London Luxury’s overreach on its request for attorney fees and found that Walmart played by the rules.

“As we said from the beginning, this case is about London Luxury’s tortious conduct and unethical behavior. … We look forward to addressing these issues on appeal.”

Walmart asked for a stay on the judgment while it appeals the case. It produced a $105 million letter of credit. Brooks said he “finds that there is no danger of Walmart being unable to pay the amount of the judgment following the appeal, plus interest.”

Richardson, one of London Luxury’s attorneys, told Arkansas Business via email that “London Luxury appreciates the Court’s thoughtful and well-reasoned opinion confirming the jury’s verdict on Walmart’s breach of London Luxury’s contract.

“We look forward to defending this award at the Eighth Circuit.”