London Luxury Llc v. Walmart Inc

  • Court: Western District of Arkansas Fayetteville Division
  • Case Number: 5:22cv5059
  • Filed: 5th January, 2022
  • Judges: Timothy L. Brooks
  • Case Type: 190 Contract – Other
  • Cause: Petition for Removal- Contract Dispute

Parties Involved

Plaintiff: London Luxury LLC

Defendant: Walmart Inc.

About the Case

Walmart had been sued for wrongfully refusing to fulfill its contractual obligation to buy tens of millions of boxes of nitrile gloves from London Luxury. The lawsuit stemmed from the February Commitment Letter, which had been amended by subsequent commitment letters. Despite London Luxury’s efforts to source gloves, Walmart had refused to accept shipments of nearly any of the gloves it had committed to purchase and had instead attempted to avoid its obligations under the Amended Commitment Letter for pretextual reasons.

Cause

In summer 2020, Walmart initiated discussions with London Luxury regarding the potential purchase of nitrile gloves. Following these discussions, Walmart communicated its intent to buy tens of millions of boxes of gloves over an extended period. London Luxury, understanding the challenges of sourcing such quantities during the COVID-19 pandemic, requested a formal agreement before proceeding with fulfilling Walmart’s orders.

The initial February Commitment Letter was straightforward, obligating Walmart to purchase a minimum of 6,072,770 master cartons of nitrile examination gloves from London Luxury on a non-cancellable, irrevocable basis for a twelve-month period. This commitment was later increased by Walmart in terms of both quantity and duration, leading London Luxury to source the gloves from factories in Malaysia and Thailand, despite pandemic-related supply chain disruptions.

By fall 2021, Walmart faced challenges when a major customer, to which it planned to resell the gloves, was lost. Subsequently, Walmart began asserting reasons to back out of the commitment, citing delays and quality testing issues on the gloves. However, London Luxury disputes these claims, noting that Walmart had extended its commitment and accepted previous shipments. Walmart also argued it was not bound by the Amended Commitment Letter, attempting to cancel purchases under a separate agreement, causing uncertainty about the future of the contractual relationship.

Injury

London Luxury asserted that the Amended Commitment Letter was a valid and binding contract, outlining specific purchase commitments for nitrile gloves. Despite London Luxury fulfilling its obligations under the agreement, Walmart’s refusal to accept shipments and doubts about its commitment prompted legal action. London Luxury sought a declaration affirming the validity of the Amended Commitment Letter, Walmart’s obligations, and an injunction compelling Walmart to fulfill its commitments.

London Luxury remained steadfast in its position on the validity of the revised agreement with Walmart. The agreement initially stipulated a minimum purchase of 60 million gloves, which later increased to 72 million and extended to annual purchases of 75-80 million boxes for five years. However, Walmart refused shipments totaling over $41 million, citing breach of contract and causing London Luxury additional costs due to delays. Legal action included seeking confirmation of the contract’s validity, Walmart’s obligations, and compensation for damages, legal fees, and other relief.

On the other hand, Walmart claimed injury resulting from London Luxury’s allegedly substandard gloves. Walmart asserted that the failed quality inspections rendered the gloves unsellable, leading to financial losses for the company. Additionally, Walmart argued that London Luxury’s failure to meet the agreed-upon quality standards in the contract harmed Walmart’s reputation and eroded customer trust.

Damages

Walmart’s breach resulted in London Luxury incurring substantial additional costs and damages. London Luxury specifically cited damages totaling $41,214,800 for unaccepted shipments, which amounted to at least 145 containers of gloves. As a result, London Luxury sought various forms of relief from the court. This included requesting specific performance from Walmart to fulfill its commitments as outlined in the agreement. London Luxury also demanded monetary damages to compensate for the financial losses incurred, including interest on the damages. Additionally, London Luxury sought reimbursement for attorneys’ fees associated with the legal proceedings. The company further requested any other appropriate relief that the court deemed necessary to address the damages caused by Walmart’s breach of contract.

Jury Verdict

On March 25, 2024, the trial between London Luxury, LLC (“London Luxury”) and Walmart, Inc. was presented before a jury of nine members. After eleven days of trial proceedings and jury instructions on relevant legal principles, the case was submitted for deliberation. On April 9, 2024, the jury returned with unanimous verdicts in favor of London Luxury on its breach of contract claim against Walmart, awarding damages totaling $101,218,680. Additionally, the jury found that London Luxury’s actions resulted in tortious conduct causing $350,000.00 in damages to Walmart. Therefore, the jury awarded Walmart this amount as compensation for the tort claims.

Court Documents: Available upon request