K7 Design Group, Inc. v. Walmart, Inc.

CourtCourt of Appeals for the Eighth Circuit
DecidedJuly 11, 2025
Docket24-1366
StatusPublished

This text of K7 Design Group, Inc. v. Walmart, Inc. (K7 Design Group, Inc. v. Walmart, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
K7 Design Group, Inc. v. Walmart, Inc., (8th Cir. 2025).

Opinion

United States Court of Appeals For the Eighth Circuit ___________________________

No. 24-1366 ___________________________

K7 Design Group, Inc.

Plaintiff - Appellee

v.

Walmart, Inc., doing business as Sam’s Club

Defendant - Appellant ____________

Appeal from United States District Court for the Western District of Arkansas ____________

Submitted: January 15, 2025 Filed: July 11, 2025 ____________

Before GRASZ, STRAS, and KOBES, Circuit Judges. ____________

GRASZ, Circuit Judge.

This case involves the sale of hand sanitizer between a supplier, K7 Design Group, Inc. (K7), and a retailer, Walmart, Inc., doing business as Sam’s Club (Sam’s Club), during the COVID-19 pandemic. K7 sued Sam’s Club for failing to pay for hand sanitizer that Sam’s Club ordered in 2020. A jury ultimately found in K7’s favor, concluding Sam’s Club and K7 formed one or more contracts for the sale of goods and Sam’s Club breached one or more of those contracts. Sam’s Club renewed its motion for judgment as a matter of law and moved for a new trial, but the district court1 denied these motions. Sam’s Club appeals, arguing K7 failed to present sufficient evidence that Sam’s Club was obligated to pay for the products at issue, the jury’s verdict was against the weight of the evidence, and the district court abused its discretion in instructing the jury. We affirm.

I. Background

K7 manufactures and designs health, beauty, and sanitizer products. In March 2020, K7 emailed Sam’s Club and offered to sell it hand sanitizer. At the time, Jessica Surber was Sam’s Club’s buyer for health and beauty products, including hand sanitizer.

Shortly after K7 emailed Sam’s Club, K7 and Surber began discussing product, price, quantity, and delivery terms for jars of hand sanitizer bearing unicorn-like images (Character Jars). Within a week, Surber emailed K7 informing it to “move forward” with three shipments of Character Jars. That same day, Sam’s Club sent a general merchandise agreement (Supplier Agreement) to K7, which K7 signed. Sam’s Club required all suppliers conducting business with it to enter into these agreements. The Supplier Agreement did not contain specific product, price, quantity, or delivery terms.

After the Supplier Agreement was executed, Surber asked K7 about ordering other hand sanitizer products. K7 emailed Surber that it could provide Sam’s Club with packs of eight-ounce bottles of hand sanitizer (Four Packs) and provided the price, quantity, and delivery terms. Surber emailed K7 and agreed to “take the pallets” of Four Packs on the delivery schedule provided by K7 and stated Sam’s Club “need[ed] the product ASAP.” A couple of weeks later, Surber emailed K7 about purchasing jars containing one-ounce bottles of hand sanitizer (Cookie Jars).

1 The Honorable Christy D. Comstock, United States Magistrate Judge for the Western District of Arkansas, to whom the case was referred for final disposition by consent of the parties pursuant to 28 U.S.C. § 636(c). -2- After the parties discussed the price, quantity, and delivery terms of the Cookie Jars, Surber emailed K7 that Sam’s Club was “aligned to 67,000 [C]ookie [J]ars.”

By the end of April 2020, Surber emailed K7 asking to “extend th[e] buys” of the Four Packs and Cookie Jars. K7 emailed Surber informing her that starting in July it could deliver 250,000 units of the Four Packs per week and 65,000 units of the Cookie Jars per week. Surber stated Sam’s Club was “aligned to 250K units of the 4PK/week” and “would like to keep it until the end of September at 250K 4PKs/week.” As to the Cookie Jars, Surber emailed K7 that Sam’s Club “can take 65K units/week until the end of September as well, then will adjust the forecast as necessary, but will keep the item in [store] until the end of December.” Surber also stated Sam’s Club would commit to the listed quantities of the Cookie Jars if K7 reduced the cost for all units of the Cookie Jars. In response, K7 sent Surber a spreadsheet of all the products previously ordered and included the additional units of Four Packs and Cookie Jars based on Sam’s Club’s new requests. The spreadsheet had the previous orders shaded in green, and the new orders shaded in orange. K7 then asked Surber to review the spreadsheet and to “confirm” Sam’s Club’s requests for the additional units, and it also agreed to reduce the cost of the Cookie Jars, including “the ones currently on order,” based on Sam’s Club’s “commitment.” Surber then sent the following email: “Confirmed, we will take all of the units in orange.” The “units in orange” included 2,750,000 Four Packs and 455,000 Cookie Jars.

About a month and a half later, K7 offered to sell Sam’s Club two kinds of six packs of hand sanitizer (Six Packs). After the parties discussed the product, price, quantity, and delivery terms of the Six Packs, Surber emailed K7 that Sam’s Club was “aligned” to purchase five million of the Six Packs “as long as availability was moved up to the beginning of Aug[ust.]”

Between May and July 2020, K7 delivered over 1,000,000 Four Packs, 328,000 Cookie Jars, and 62,000 Character Jars to Sam’s Club. Sam’s Club paid K7 approximately $17.5 million for the hand sanitizer. -3- By the summer of 2020, hand sanitizer sales began to decline. In July 2020, K7 emailed Sam’s Club asking when it would “ship” the remaining Four Packs, Cookie Jars, and Character Jars. Sam’s Club responded that it was “working on” the Four Packs and “may not write the full 612K due to [store] need,” and that it would “work on the other 2 items.” Whenever K7 asked Sam’s Club to “ship” the product, that meant Sam’s Club would pick up the product at a specific location based on a purchase order written by Sam’s Club for that product. Based on the parties’ communications, K7 was a “collect supplier,” 2 which meant that K7 would deliver the hand sanitizer to one of its warehouses and Sam’s Club would pick up the hand sanitizer from those warehouses. Sam’s Club would then transport the product to its distribution centers and direct the product to its stores based on a different internal purchase order that the distribution centers issued.

At this time, K7 was preparing for products to arrive at its warehouses for collection and, as new product came into its warehouses, the previous deliveries began piling up. K7 continued to ask Sam’s Club to pick up the product it had already delivered at K7’s warehouses and communicated to Sam’s Club that its warehouses were experiencing “space issues.” Notwithstanding K7’s communications, Sam’s Club did not pick up all the hand sanitizer. Surber then emailed K7 that it expected to sell only “20K-25K units/week” and could not “push[] inventory into [stores].” But K7 continued to ask Sam’s Club to take the remaining hand sanitizer and stated that it could not “scale back at present – as all goods have been fully produced based off commits.” By the end of August 2020, K7 communicated to Sam’s Club that it had to move incoming product to other warehouses to accommodate the previously delivered product and needed Sam’s Club to pick up the product “asap.” But Sam’s Club’s payments did not keep pace with their orders.

By September 2020, K7 had millions of units of Four Packs, Cookie Jars, and Six Packs at its warehouses and many more in transit to its warehouses. While the

2 “Collect supplier” is a term that Sam’s Club itself defined at trial.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Grain Land Coop v. Kar Kim Farms, Inc.
199 F.3d 983 (Eighth Circuit, 1999)
James Trickey v. Kaman Industrial Technologies
705 F.3d 788 (Eighth Circuit, 2013)
Bio-Tech Pharmacal, Inc. v. International Business Connections, LLC
184 S.W.3d 447 (Court of Appeals of Arkansas, 2004)
Skallerup v. City of Hot Springs
2009 Ark. 276 (Supreme Court of Arkansas, 2009)
Daniel Retz v. William Seaton
741 F.3d 913 (Eighth Circuit, 2014)
Michigan Millers Mutual Insurance v. Asoyia, Inc.
793 F.3d 872 (Eighth Circuit, 2015)
Edward Blackorby v. BNSF Railway Company
849 F.3d 716 (Eighth Circuit, 2017)
Anthony Smiley v. Gary Crossley Ford, Inc.
859 F.3d 545 (Eighth Circuit, 2017)
Ecclesiastical Washington v. Larry Denney
900 F.3d 549 (Eighth Circuit, 2018)
Ryan Data Exchange, Ltd. v. Graco, Inc.
913 F.3d 726 (Eighth Circuit, 2019)
Bowen v. Gardner
425 S.W.3d 875 (Court of Appeals of Arkansas, 2013)
Daniel Monohon v. BNSF Railway Company
17 F.4th 773 (Eighth Circuit, 2021)
Troutman Oil Co. v. Lone
57 S.W.3d 240 (Court of Appeals of Arkansas, 2001)

Cite This Page — Counsel Stack

Bluebook (online)
K7 Design Group, Inc. v. Walmart, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/k7-design-group-inc-v-walmart-inc-ca8-2025.