“Revelations concerning Walmart are not emerging because Walmart somehow chose to ‘come clean’ on its deplorable refusal to control how its nationwide pharmacies distributed opioids,” the complaint says. “Despite federal prosecutors contemplating an indictment of Walmart, Walmart failed to disclose this information to stockholders.”
The lawsuit is the second filed in Delaware Chancery Court by pension funds seeking access to the retail giant’s internal files under a state law giving corporate shareholders broad records inspection rights if they credibly suspect wrongdoing at the top.
Walmart didn’t immediately respond to a request for comment Monday. A company spokesman told Bloomberg in response to the earlier records suit that “Walmart takes its responsibility to shareholders seriously” and “there is no credible basis to conclude Walmart or its board engaged in any misconduct.”
Like the earlier suit, the new complaint seeks to assess how much blame Walmart’s board deserves for billions in potential liability stemming from the opioid crisis, particularly in connection with a multidistrict case brought by “thousands of states and municipalities.” That suit accuses top retail pharmacies, including Walmart, of ignoring “red flags” and doing “nothing to stop” the overprescribing of addictive painkillers.
Part of the multidistrict case is set for trial in November. Evidence emerging from it, as well as from other public sources, allegedly shows that “pill mill doctors viewed Walmart as a place addicts could fill a prescription without any hassle.”
Meanwhile, Walmart was bound by—and violating—an agreement with the Drug Enforcement Agency, signed in 2011, that required it to implement strict prescription controls, according to the complaint brought by the Ontario Provincial Council of Carpenters’ Pension Trust Fund.
Although the company"received notice” that the Justice Department was considering charging it for breaching that agreement, it “actively concealed the existence of the government’s criminal and civil investigations and actions, in direct violation of the federal securities laws,” the suit says.
Cause of Action: Section 220 of the Delaware General Corporation Law.
Relief: An order requiring the company to turn over relevant records; costs and fees.
Attorneys: The pension fund is represented by Labaton Sucharow LLP.
The case is Ont. Prov. Council of Carpenters Pension Tr. Fund v. Walmart Inc., Del. Ch., No. 2020-0697, 8/24/20.
—With assistance from