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Item 3. Legal Proceedings

2025-03-14 compared with 2024-03-15 · 30 added, 70 removed, 44 unchanged (69% of the section changed)

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Financial Statements and Supplementary Data ," which is captioned "Contingencies," under the sub-caption "Legal Proceedings." We refer you to that discussion for important information concerning those legal proceedings, including the basis for such actions and, where known, the relief sought.

We provide the following additional information concerning those legal proceedings, including the name of the lawsuit, the court in which the lawsuit is pending, and the date on which the petition commencing the lawsuit was filed.

Prescription Opiate Litigation:

Opioid-Related Litigation:

In re National Prescription Opiate Litigation (MDL No.

2804) (the "MDL").

2804) (the "MDL") is pending in the U.S.

District Court for the Northern District of Ohio and includes over 340 cases as of March 4, 2024.

The liability phase of a single, two-county trial in one of the MDL cases against a number of parties, including the Company, regarding opioid dispensing claims resulted in a jury verdict on November 23, 2021, finding in favor of the plaintiffs as to the liability of all defendants, including the Company.

The abatement phase of the single, two-county trial resulted in a judgment on August 17, 2022, that ordered all three defendants, including the Company, to pay an aggregate amount of approximately $0.7 billion over fifteen years, on a joint and several liability basis, and granted the plaintiffs injunctive relief.

The Company has filed an appeal with the Sixth Circuit Court of Appeals.

The monetary aspect of the judgment is stayed pending appeal, and the injunctive portion of the judgment went into effect on February 20, 2023.

On September 11, 2023, the Sixth Circuit Court of Appeals issued an order certifying certain questions in the appeal for review by the Supreme Court of Ohio.

On November 29, 2023, the Supreme Court of Ohio accepted the request for certification, and the matter remains pending with that court.

On October 25, 2023, the MDL designated four cases brought by third-party payers as bellwether cases to proceed through discovery.

Additional bellwethers of cases brought by hospitals and other healthcare providers may be designated in the future.

In addition, there are over 50 other cases pending in state and federal courts throughout the country against the Company as of March 4, 2024, as well as other cases in Canada against Wal-Mart Canada Corp.

and certain other subsidiaries of the Company.

The case citations and currently scheduled trial dates, where applicable, are listed on Exhibit 99.1 to this Annual Report on Form 10-K.

Opioid Settlement Framework:

On November 15, 2022, the Company announced that it had agreed to a Settlement Framework to resolve substantially all opioids-related lawsuits filed against the Company by states, political subdivisions, and Native American tribes (other than the single, two-county trial on appeal to the Sixth Circuit Court of Appeals as described above), as described in more detail in Note 10 to the Consolidated Financial Statements.

The Company now has settlement agreements with all 50 states, including four states that previously settled with the Company, as well as the District of Columbia, Puerto Rico and three other U.S.

territories, that are intended to resolve substantially all opioids-related lawsuits brought by state and local governments against the Company.

As described in more detail in Note 10 to the Consolidated Financial Statements, the Settlement Framework became effective on September 6, 2023, and as of January 31, 2024 substantially all of the original approximately $3.3 billion accrued liability for the Settlement Framework and other settlements have been paid.

District Court for the Northern District of Ohio and includes approximately 250 cases with claims against the Company as of March 10, 2025.

In addition, there are more than 25 other opioid-related cases against the Company and its subsidiaries pending in U.S.

state and federal courts and Canadian courts as of March 10, 2025.

The non-MDL case citations are listed on Exhibit 99.1 to this Annual Report on Form 10-K.

DOJ Opioid Civil Litigation:

A civil complaint pending in the U.S.

District Court for the District of Delaware has been filed by the U.S.

Department of Justice (the "DOJ") against the Company, in which the DOJ alleges violations of the Controlled Substances Act related to nationwide distribution and dispensing of opioids.

United States of America v.

Walmart Inc., et al., USDC, Dist.

of DE, 12/22/20.

The Company filed a motion to dismiss the DOJ complaint on February 22, 2021.

After the parties had fully briefed the Company's motion to dismiss, the DOJ filed an amended complaint on October 7, 2022.

On November 7, 2022, the Company filed a partial motion to dismiss the amended complaint.

The Court held a hearing on the partial motion to dismiss on January 18, 2024, and ordered the DOJ to file an amended complaint.

The DOJ filed that amended complaint on February 1, 2024, and Walmart filed a partial motion to dismiss that complaint on February 6, 2024.

On March 11, 2024, the Court granted in-part Walmart's motion by dismissing the entirety of the DOJ's claims related to distribution and dismissing the DOJ's claims arising under one of the DOJ's two dispensing liability theories.

The DOJ's claims arising under its other dispensing liability theory remain pending.

Opioids Related Securities Class Actions and Derivative Litigation :

Three derivative complaints and two securities class actions drawing heavily on the allegations of the DOJ complaint have been filed in Delaware naming the Company and various current and former directors and certain current and former officers as defendants.

The plaintiffs in the derivative suits (in which the Company is a nominal defendant) allege, among other things, that the defendants breached their fiduciary duties in connection with oversight of opioids dispensing and distribution and that the defendants violated Section 14(a) of the Exchange Act, and are liable for contribution under Section 10(b) of the Exchange Act in connection with the Company's disclosures about opioids.

Two of the derivative suits have been filed in the U.S.

District Court in Delaware and those suits have been stayed pending further developments in other opioids litigation matters.

The other derivative suit has been filed in the Delaware Court of Chancery.

The defendants in the derivative suit pending in the Delaware Court of Chancery moved to dismiss and/or to stay that case on December 21, 2021;

the plaintiffs responded by filing an amended complaint on February 22, 2022.

On April 20, 2022, the defendants moved to dismiss and/or stay proceedings on the amended complaint.

In two orders issued on April 12 and 26, 2023, the Court of Chancery granted the defendants' motion to dismiss with respect to claims involving the Company's distribution practices and denied the remainder of the motion, including the Company's request to stay the litigation.

On May 5, 2023, the Company's Board of Directors appointed an independent Special Litigation Committee (the "SLC") to investigate the allegations regarding certain current and former officers and directors named in the various proceedings regarding oversight with respect to opioids.

The Board has authorized the SLC to retain independent legal counsel and such other advisors as the SLC deems appropriate in carrying out its duties.

The derivative matter pending in the Delaware Court of Chancery is stayed until the SLC completes its investigation.

The securities class actions, alleging violations of Sections 10(b) and 20(a) of the Exchange Act regarding the Company's disclosures with respect to opioids, purport to be filed on behalf of a class of investors who acquired Walmart stock from March 30, 2016, through December 22, 2020.

On May 11, 2021, the U.S.

District Court in Delaware consolidated the class actions and appointed a lead plaintiff and lead counsel.

The defendants moved to dismiss the consolidated securities class action on October 8, 2021.

On October 14, 2022, plaintiffs filed an amended complaint, which revised the applicable putative class of investors to those who acquired Walmart stock from March 31, 2017, through December 22, 2020.

On November 16, 2022, the Company moved to dismiss the amended complaint.

That motion remains pending.

Derivative Lawsuits:

Settlement of Certain Opioid-Related Matters:

As described in more detail in Note 10 to our Consolidated Financial Statements, the Company accrued a liability of approximately $3.3 billion in fiscal year 2023 for certain opioid-related settlements.

As of January 31, 2025, all of the accrued liability has been paid.

Certain eligible political subdivisions and federally recognized Native American tribes have until July 15, 2025 and February 24, 2026, respectively, to join the settlement.

Opioid-Related Derivative Lawsuits:

Alvarez et al.

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Walton et al., DE Court of Chancery, 9/27/21.

Securities Class Actions:

Opioid-Related Securities Class Actions:

, USDC, Dist.

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of DE, 5/11/21;

In re Walmart Inc.

Securities Litigation, USCCA, 3d Cir., 4/29/24.

False Claims Act Litigation:

United States of America ex rel.

James Marcilla and Isela Chavez , USDC, Dist.

of N.M., 8/23/19, transferred to USDC Dist.

of DE 7/25/24.

ASDA Equal Value Claims:

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Federal Trade Commission v.

(CV-3372), USDC, N.

Of Ill, 6/28/22;

Federal Trade Commission v.

, USCCA, 7th Cir., 10/28/24.

Driver Platform Matter:

Consumer Financial Protection Bureau v.

Walmart Inc., et al.

of Minn., 12/23/24.

Mexico Antitrust Matter:

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(Docket IO-002-2020, consolidated with Docket DE-026-2020), Mexico, 10/6/23.

CERTAIN OTHER MATTERS:

Foreign Direct Investment Matters:

In July 2021, the Directorate of Enforcement in India issued a show cause notice to Flipkart Private Limited and one of its subsidiaries ("Flipkart"), and to unrelated companies and individuals, including certain current and former shareholders and directors of Flipkart.

The notice requests the recipients to show cause as to why further proceedings under India's Foreign Direct Investment rules and regulations (the "Rules") should not be initiated against them based on alleged violations during the period from 2009 to 2015, prior to the Company's acquisition of a majority stake in Flipkart in 2018.

The notice is an initial stage of proceedings under the Rules which could, depending upon the conclusions at the end of the initial stage, lead to a hearing to consider the merits of the allegations described in the notice.

If a hearing is initiated and if it is determined that violations of the Rules occurred, the regulatory authority has the authority to impose monetary and/or non-monetary relief.

Flipkart has begun the process of responding to the notice and, if the matter progresses to a consideration of the merits of the allegations described in the notice is initiated, Flipkart intends to defend against the allegations vigorously.

Due to the fact that this process is in an early stage, the Company is unable to predict whether the notice will lead to a hearing on the merits or, if it does, the final outcome of the resulting proceedings.

While the Company does not currently believe that this matter will have a material adverse effect on its business, financial condition, results of operations or cash flows, the Company can provide no assurance as to the scope or outcome of any proceeding that might result from the notice, the amount of the proceeds the Company may receive in indemnification from individuals and entities that sold shares to the Company under the 2018 agreement pursuant to which the Company acquired its majority stake in Flipkart, and can provide no assurance as to whether there will be a material adverse effect to its business or its Consolidated Financial Statements.

India Antitrust Matter:

Competition Commission of India, Case No.

40 of 2019, order initiating investigation 1/13/20.

ENVIRONMENTAL MATTERS:

Item 103 of SEC Regulation S-K requires disclosure of certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that the Company reasonably believes will exceed an applied threshold not to exceed $1 million.

In December 2021, the Office of the Attorney General of the State of California filed suit against the Company, bringing enforcement claims regarding Walmart's management of waste consumer products at its California facilities that are alleged to be hazardous.

The suit was filed in Superior Court of Alameda County, California, Case No.

21CV004367, People v.

Trial is currently set for September 30, 2024.

The Company believes it has strong defenses and is vigorously defending this litigation matter.

While the Company cannot predict the ultimate outcome of this matter, the potential for penalties or settlement costs could exceed $1 million.

Although the Company does not believe that this matter will have a material adverse effect on its business, financial position, results of operations or cash flows, the Company can provide no assurance as to the scope and outcome of this matter and no assurance as to whether there will be a material adverse effect to its business or its Consolidated Financial Statements.

In October 2023, the Company received a Finding of Violation from the U.S.

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Due to the fact that this process is in an early stage, the Company is unable to predict the final outcome of this matter.

Although the Company does not believe this matter will have a material adverse effect on its business, financial position, results of operations or cash flows, the Company can provide no assurance as to the scope or outcome of this matter and no assurance as to whether there will be a material adverse effect to its business or its Consolidated Financial Statements.

Although the Company does not believe this matter will have a material adverse effect on its business, financial position, results of operations, or cash flows, the Company can provide no assurance that its business, financial position, results of operations or cash flows will not be materially adversely affected.

MINE SAFETY DISCLOSURES

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What changed 10-K

Item 3. Legal Proceedings