A federal jury in Fayetteville on Tuesday handed down a $101.2 million verdict against Walmart Inc. of Bentonville after finding that the retail giant breached a pandemic-era contract with a supplier of nitrile gloves.
The sum was awarded to London Luxury LLC of New Rochelle, New York, which argued that the deal was non-cancellable and irrevocable and that Walmart only tried to back out after the retailer lost a customer to which it planned to resell the gloves.
London Luxury’s complaint was originally filed in U.S. District Court for the Southern District of New York. The case was transferred in April 2022 to U.S. District Court for the Western District of Arkansas.
In the complaint, London Luxury said that it began negotiating the deal with Walmart in the summer of 2020 and that it demanded a definitive agreement due to the potential size of the purchase. Walmart in February 2021 agreed to purchase at least six million boxes, then substantially increased the order to 75 million to 80 million boxes annually for the next five years. The deal was valued at more than $500 million.
London Luxury said that because almost all of the world’s nitrile glove production occurs outside of the U.S., the company spent “a considerable amount of time and resources coordinating supplies of gloves” for Walmart from factories in Malaysia and Thailand. The company began shipping gloves to Walmart in July 2021. The complaint notes that at the time, there were “considerable obstacles” in international supply chains due to the COVID-19 pandemic.
A few months later, after Walmart had paid $3.4 million for the first shipments of gloves, the retailer began refusing shipments from London Luxury. Walmart cited shipping delays and concerns about the quality and source of the gloves. However, according to London Luxury’s complaint, Walmart’s own Malaysian affiliates had confirmed the quality of the gloves and Walmart had approved the manufacturer of the gloves just a month earlier.
It was around that time that Walmart lost a “major business-to-business customer” to which it planned to resell the gloves, according to the complaint. That’s also when Garrett Small, Walmart’s director of global sourcing and main negotiator of the deal, stopped speaking to London Luxury.
Walmart’s response to the lawsuit included a counterclaim against London Luxury. The retailer alleged that London Luxury CEO Marc Jason encouraged Small to overlook London Luxury’s “repeated breaches of its contractual obligations” and offered Small financial incentives from a future job at London Luxury.
The jury awarded Walmart $350,000 in damages for tortious conduct that interfered with Walmart’s employer relationship with Small. He no longer works for Walmart.
London Luxury was represented in the case by Holwell Shuster & Goldberg LLP of New York and McDaniel Wolff PLLC of Little Rock. In a statement, Scott Richardson of McDaniel Wolff said, “This jury showed once again that businesses who deal with Walmart can have their day in court, even in Walmart’s backyard.”
Sign up for Daily E-news
