Berman Tabacco represented Norfolk County Retirement System in this derivative action that sought to hold Walmart Inc.’s (“Walmart”) controlling shareholders, board of directors, and senior management accountable for alleged breaches of fiduciary duty arising from their decisions and oversight related to the company’s opioid distribution and dispensing practices. The lawsuit followed a successful action to compel the company to produce books and records regarding these practices pursuant to 8 Del. C. § 220 of the Delaware General Corporation Law, Norfolk Cnty. Ret. Sys. v. Walmart Inc., No. 2020-0482 (Del. Ch.).
The complaint alleged that Walmart entered into numerous settlements and consent decrees with federal regulators requiring the implementation of robust opioid diversion controls but failed for more than a decade to implement those mandated safeguards. As a result, plaintiffs alleged the company exposed itself to significant regulatory and litigation risk through systemic compliance failures. In two landmark opinions issued in April 2023, the court largely denied defendants’ motion to dismiss, sustaining the core fiduciary duty claims. Ontario Provincial Council of Carpenters’ Pension Tr. Fund v. S. Robson Walton, C.A. No. 2021-0827, 2023 WL 2904946 (Del. Ch. Apr. 12, 2023); 2023 WL 3093500 (Del. Ch. Apr. 26, 2023). Following these rulings, the company appointed a special litigation committee to evaluate the claims.
The parties reached a settlement of $123 million that also required Walmart to maintain enhanced corporate governance practices for at least five years. Specifically, the settlement imposed strengthened board-level reporting obligations and direct board oversight of compliance with the Controlled Substance Compliance Policy. The court approved the settlement on December 23, 2024.