Walmart ordered to pay more than $19M in hand sanitizer distributor lawsuit

A jury in Washington County, Arkansas, found Walmart liable for $19.3 million in damages in a breach-of-contract dispute with a hand sanitizer distributor hired by the retail giant in 2020, according to court documents.

Pittsburg, California-based K2 Distribution Company, LP, filed suit against Bentonville, Arkansas-based Walmart in October 2021, alleging the retail giant hired K2 to provide a “reputable, reliable, fixed-price, long-term supply of hand sanitizer (and dispensers for that hand sanitizer)” for use by customers and employees, the suit said. The jury announced its verdict Friday.

The distributor said it spent more than $35 million on 44,000 custom-designed sanitizer dispensers and cases of sanitizer for more than 5,000 Walmart and Sam’s Club stores, but that Walmart refused to pay for the order and later declined to purchase any further sanitizer from K2. The lawsuit also accused Walmart of “conversion,” or, essentially, stealing property.

Walmart, in a statement to WGB Monday, said it is considering its legal options following the verdict.

“We value our supplier relationships and disagree with the verdict,” Randy Hargrove, the retailer’s senior director of national media relations, said. “We continue to believe our business dealings with K2 were appropriate, and we are reviewing our options, including the filing of post-trial motions.”

The jury awarded K2 $14,478,000 for the breach of contract charges and $4,826,250 on the conversion charge. K2 had originally sought more than $200 million in damages in its lawsuit.

The distributor said Walmart backed out of its contract “after supplies of hand sanitizer became available from other sources at a lower price,” in August 2020.

“K2 Distribution brings this lawsuit based on Walmart’s breaches of contract, bad faith, malfeasance, misfeasance and/or nonfeasance, and fraudulent conduct,” the lawsuit said.

Walmart is slated to release its first-quarter earnings on Thursday morning.