Please ensure Javascript is enabled for purposes of website accessibility

Walmart May Be on the Hook for Billions in Opioid Damages

By Rhian Hunt – Updated Oct 6, 2020 at 8:50AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Yesterday's ruling by a judge could spell big trouble in next month's trial.

Walmart (WMT 0.15%) received a potentially major piece of bad news on Monday when Delaware Chancery Judge Travis Laster ruled the retailer must produce files relating to two major opioid lawsuits.

"I don't think you can say with a straight face there isn't any evidence of wrongdoing," Laster said during a video hearing, according to Bloomberg.

The lawsuits, Norfolk County Retirement System v. Walmart Inc. and Police and Fire Retirement System of Detroit v. Walmart Inc., were filed in June by two pension funds that own Walmart stock. The suits allege Walmart broke the law for years by selling large amounts of highly addictive opioid painkillers to doctors and others operating "pill mills."

Law books and a set of brass scales on a polished desktop.

Image source: Getty Images.

According to Bloomberg Law, Cleveland-based federal judge Dan Aaron Polster heard evidence earlier this year that Walmart started flagging massive opioid painkiller orders as far back as 2011, but said it "appears Walmart simply shipped the flagged orders and did not report them to the DEA." Responding to the suit in June, Walmart spokesman Randy Hargrove countered, "There is no credible basis to conclude Walmart or its board engaged in any misconduct." The actual trial is set to occur next month, in November 2020.

Judge Laster said on Monday the pension funds "quite clearly have a credible basis" for their lawsuits, which could see Walmart compelled to pay billions of dollars in damages if the allegations are ruled true.

This isn't the only multi-billion loss Walmart may face this year. It recently sold its U.K. Asda supermarket chain for $8.8 billion but lost $2.5 billion on the divestiture, which is expected to have a significant effect on its earnings per share in the year when the deal closes. 

Rhian Hunt has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Stocks Mentioned

Walmart Stock Quote
Walmart
WMT
$148.78 (0.15%) $0.23

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.