Walmart must turn over files on alleged opioid mishandling

A judge ruled Monday that Walmart must turn over internal board discussions about opioids dating back to 2010.

A Walmart store in Commerce, Texas, USA, 04 September 2019
Walmart is accused of allegedly failing to keep an eye on excessively large opioid sales within its 2,700 store pharmacies [File: Larry W Smith/EPA]

Walmart Inc. must disclose some internal files related to alleged mishandling of opioid painkillers sold through the company’s in-store pharmacies, after a judge ruled in favor of investors who claim directors failed in their oversight.

Two pension funds “quite clearly have a credible basis” to probe whether board members wrongfully turned a blind eye to excessively large sales of the highly addictive medicines, Delaware Chancery Judge Travis Laster ruled Monday. Walmart must turn over board discussions about opioid issues stretching back to 2010.

“I don’t think this is a close call,” Laster said during a video hearing. “I don’t think you can say with a straight face there isn’t any evidence of wrongdoing.”

States and local governments are suing numerous drug makers, distributors and pharmacies over the U.S. opioid epidemic, including Bentonville, Arkansas-based Walmart. The retailer faces a November trial in Ohio in which municipalities will seek billions in damages for alleged failures to recognize “red flags” about heavily repeated sales of the painkillers.

Randy Hargrove, a Walmart spokesman, didn’t immediately return a call or an email seeking comment on Laster’s rulings.

The funds, which own Walmart shares, contend in court filings that some of the chain’s executives ensured a steady stream of the painkillers to doctor-run pill mills that routinely wrote hundreds of prescriptions for opioid painkillers. To support their claims, the investors cite evidence that emerged in the opioid cases consolidated before a federal judge in Cleveland, as well as media reports.

When the federal government moved to investigate and then prosecute Walmart, the retailer used its political clout to “thwart any such enforcement action, causing career public servants to quit their jobs in frustration and disgust,” the funds alleged.

David Wales, a lawyer for the funds, told the judge during the hearing Monday that the plaintiffs are seeking the internal files to get a better handle on the board’s oversight of opioid distribution. The company agreed with the federal government in 2010 to beef up monitoring of sales of the highly addictive pills.

Still, the company failed to keep an eye on excessively large opioid sales within its 2,700 in-store pharmacies, Wales said. The investigation would focus on whether Walmart “lived up” to its agreement with the government, he added.

Ray Dicamillo, one of Walmart’s lawyers, told the judge Monday that the funds have no evidence that directors were involved in the opioid issue and sales of the painkillers was a minuscule part of the chain’s business, constituting about 5% of its revenue.

“What’s missing is a direct link” to board members or senior executives in connection with the alleged wrongdoing, Dicamillo said.

The Walmart cases are Norfolk County Retirement System v. Walmart Inc., 2020-0482, and Police and Fire Retirement System of Detroit v. Walmart Inc., 2020-0478, Delaware Chancery Court (Wilmington)