AUSTIN - The Texas Supreme Court has been asked to decide whether a federal regulation protecting food stamp consumers and state governments in charge of the Supplemental Nutrition Assistance Program from lawsuits by retailers also gives technology contractors complete immunity from all state-law causes of action brought by retailers.
On May 27, the high court granted Walmart’s petition for review, which seeks to reverse an appellate court’s decision to affirm two summary judgment wins in favor of Xerox.
The case involves a dispute between Walmart and Xerox, a company that contracts with many states to distribute SNAP benefits to lower-income citizens.
According to Walmart’s petition, on Oct. 12, 2013, Xerox’s Electronic Benefit Transfer system failed and remained down for ten hours. Retailers all over the country, including Walmart, were unable to process SNAP transactions automatically and had to decide whether to stop selling food or to conduct the transactions using back-up systems.
“Rather than shut down SNAP purchases, Walmart did exactly what regulators would have it do—continue to sell food to SNAP beneficiaries by using one of the long-established, state-authorized back-up systems, which is called ‘store-and-forward,’” the petition states. “When Walmart later submitted those transactions, Xerox improperly rejected about 80,000 of them— even though Walmart had been coordinating with Xerox throughout. All told, Walmart lost about $4,000,000 because of Xerox’s negligence.”
Walmart argues the decisions rejecting its suit to recover lost revenue was in error.
“Those decisions threaten to cause significant disruption to the delicately wrought SNAP distribution system, creating a new-found federal immunity to state-law claims, and to summary judgment practice throughout Texas,” the petition states.
Xerox’s response asserts the appellate court correctly held that Walmart performed store-and-forward transactions at its own choice and liability.
“The court of appeals correctly held that Wal-Mart is responsible for its own, voluntary commercial decisions,” the response states.
Case No. 20-0980