Walmart Seeks New Trial After $101.2M Judgment in PPE Supply Case

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Though London Luxury LLC won a $101.2 million judgment against Walmart Inc. in April, the legal battle rages on.

In the latest court filings in U.S. District Court for the Western District of Arkansas, the Bentonville retailer has asked for a new trial. It claims the case brought by London Luxury, a supplier of nitrile gloves, was built on fraud and that the jury’s verdict was wrong.

London Luxury, of New Rochelle, New York, has meanwhile asked the judge to award it about $35 million in attorneys’ fees and about $19 million in prejudgment interest.

Both motions are pending.

On May 3, three of London Luxury’s creditors filed an involuntary Chapter 7 bankruptcy against it, which could lead to liquidation. The total amount of the creditors’ claims is $6 million, according to the filing in a U.S. Bankruptcy Court in New York.

London Luxury said in its motion for fees that the case with Walmart was complex and spanned more than 825 days of litigation, resulting in almost half a million pages of documents.

But in the end, a nine-member jury found on April 9 that Walmart breached its $500 million contract with London Luxury and awarded it $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.

“This case is not the average commercial dispute,” London said in the filing. Brendon DeMay, a partner at Holwell Shuster & Goldberg LLP of New York, represented London Luxury and tried the case with Priyanka Timblo, also a partner at the firm, and Scott Richardson of McDaniel Wolff of Little Rock.

“The contractual matters at issue in this case included a complex, international contract that required multiple aspects to litigate: from glove testing (bringing in a product-liability component), to pandemic market forces, to supply chain management,” the London Luxury filing said.

The law firm for London Luxury, Holwell Shuster & Goldberg, was on a contingency-fee arrangement and is entitled to 33.33% of the gross amount recovered, London Luxury said in the filing.

It asked that the judgment amount 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.

“The outstanding result that counsel achieved at trial weighs strongly in favor of granting every penny of the requested fee application,” the supplier’s filing said.

London Luxury also said that U.S. District Judge Timothy Brooks, who presided over the case, should punish Walmart for allegedly committing “blatant discovery” abuses and intentionally violating the court’s orders.

London Luxury alleged that Walmart “withheld material that was not subject to good-faith privilege claim.” London Luxury also said that Walmart’s attorneys “made factual representations to the Court that were patently untrue, as the wrongly withheld documents eventually showed.”

During the trial, the jury also heard Walmart’s 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.

Walmart’s Response

Walmart said in its filing that Brooks shouldn’t award London Luxury any attorneys’ fees, adding that the amounts are unreasonable.

Walmart asked Brooks to overrule the jury’s decision on London Luxury’s breach of contract claim. If not, it asked Brooks to toss the judgment and order a new trial.

“As it has demonstrated, Walmart had a clear legal right to stop ordering gloves from London Luxury for violation of the parties’ contract,” Walmart said in its filing.

Walmart said that the contract contained anti-corruption rules that prohibited London Luxury from forming personal relationships with Walmart employees who could influence business with Walmart.

“No jury could reasonably find that Walmart was required to keep ordering gloves from London Luxury if it breached the contractual anti-corruption rules — much less if it breached them so egregiously as to give rise to tort liability,” Walmart said in the filing.

Timblo, one of London Luxury’s attorneys, told Arkansas Business that the facts listed by Walmart in its “motion do not give an accurate picture of what happened during this 10-day trial.” She also said that Walmart should have presented a lot of its points in the filing to the jury.

Walmart also alleged in its filing that “If the verdict is allowed to stand, it will set a chilling standard for the way business is conducted in this district, which includes four Fortune 500 companies. Suppliers will have every incentive to ignore their contractual ethical obligations, corrupt their counterparties, and engage in all manner of fraud, secure in knowing that they will face no consequences for it … .”

Walmart also said that London Luxury’s request for sanctions is “baseless,” and denied that it engaged in discovery abuses.

London Luxury’s argument “rests on an implausible conspiracy theory that grossly mischaracterized Walmart’s good-faith conduct and efforts to comply with the Court’s orders,” Walmart said in the filing.