Overview of the Sanctions Order
On November 7, 2025, U.S. District Judge R. Gary Klausner in the Central District of California issued a sanctions order against two partners at the Los Angeles-based law firm Dovel & Luner LLP—Christin Cho and Rick Lyon—in a putative class action lawsuit alleging false labeling of Walmart’s Great Value Refined Avocado Oil. The case, Valdovinos v. Walmart Inc. (Case No. 2:24-cv-07892), centers on claims that the product, marketed as “100% pure,” is adulterated with cheaper oils or impurities, leading consumers to overpay for a premium-priced item. This lawsuit is part of a wave of similar class actions targeting avocado oil brands like Target’s Good & Gather, Aldi’s Simply Nature, and others, fueled by a 2019 UC Davis study highlighting widespread adulteration in the industry.
The sanctions stem from what Judge Klausner described as the attorneys’ pursuit of the case based on a “false fact”: the lead plaintiff, Maria Valdovinos, purchased the avocado oil online from Walmart.com, subjecting her claim to mandatory arbitration under Walmart’s online terms of use. Despite discovering this fact early in discovery, the attorneys allegedly failed to disclose it and continued litigating, including opposing Walmart’s motion to compel arbitration. The judge ruled this conduct violated Federal Rule of Civil Procedure 11, which prohibits filings made for improper purposes or based on misrepresented facts, and warranted sanctions to deter such behavior.
Details of the Case and Alleged Misconduct
- The Underlying Lawsuit: Filed in September 2024, the complaint accuses Walmart of violating California’s Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act by labeling the oil as “100% avocado oil” without disclosing alleged impurities. The suit seeks damages, injunctive relief, and class certification for California purchasers. Independent lab testing commissioned by the plaintiffs’ counsel purportedly showed the product’s fatty acid profile mismatched that of pure avocado oil, indicating dilution.
- Discovery of the Arbitration Issue: During initial disclosures in late 2024, Walmart produced evidence showing Valdovinos’s purchase was online, triggering arbitration. Emails revealed that Cho and Lyon learned of this by October 2024 but did not notify the court or withdraw the complaint. Instead, they argued the arbitration clause did not apply retroactively and continued discovery motions.
- Judge’s Rationale for Sanctions:
- False Representation: The attorneys “knowingly pursued a claim they knew was subject to arbitration,” creating a “false factual predicate” for the litigation.
- Improper Purpose: This delayed resolution and increased Walmart’s costs unnecessarily, potentially to pressure settlement.
- Proportionality: Unlike broader Rule 11 violations, the sanctions target only the misleading conduct, not the merits of the adulteration claims.
- The order emphasizes the judiciary’s role in policing class action abuses, especially in consumer protection suits where lead plaintiffs are often “professional” class representatives.
The sanctioned attorneys face a $10,000 monetary penalty each, payable to the court, plus an order to reimburse Walmart for $25,000 in related attorney fees. The case remains stayed pending arbitration for Valdovinos, with the judge hinting at potential dismissal if no suitable substitute plaintiff emerges.
Response from Dovel & Luner
Sean Luner, a partner at the firm (and no relation specified to Rick Lyon), issued a statement calling the order “unwarranted and contrary to controlling law.” The firm plans to appeal to the Ninth Circuit, arguing:
- The arbitration clause’s applicability was a legal dispute, not a settled “fact.”
- Walmart’s terms did not clearly govern the purchase, and the attorneys had a good-faith basis to challenge it.
- Sanctions chill zealous advocacy in consumer class actions, where discovery often uncovers such issues.
Dovel & Luner, known for high-volume consumer litigation (e.g., similar suits against Target and Aldi), emphasized that the adulteration claims are meritorious and supported by scientific evidence, independent of the procedural flaw.
Broader Context and Implications
This incident highlights escalating scrutiny on class action tactics amid a surge in food labeling lawsuits. Since 2024, at least a dozen avocado oil cases have been filed nationwide, often by the same firms, citing the same UC Davis research. Defendants like Sovena USA have moved to dismiss others for lack of evidence, calling them “baseless litigation campaigns.” The Judicial Panel on Multidistrict Litigation denied consolidation in January 2025, citing insufficient overlap.
For the legal community:
- Deterrence Effect: Rule 11 sanctions are rare but increasing in consumer suits; this could prompt firms to vet lead plaintiffs more rigorously for arbitration risks.
- Industry Impact: Avocado oil producers face ongoing pressure, with potential for settlements or label changes. Consumers may see refunds if classes certify elsewhere.
- Appeal Outlook: Ninth Circuit precedent (In re Mercury Interactive Corp. Sec. Litig., 2009) requires “willful” misconduct for sanctions, which Dovel may leverage to reverse.
The order underscores tensions between aggressive plaintiff-side litigation and judicial efficiency, particularly in an era of e-commerce where arbitration clauses are ubiquitous. Walmart has not commented beyond welcoming the ruling. Updates on the appeal are expected in early 2026.