When Arbitration Agreements Matter: A Practical Reminder from the Golikov v. Walmart Sanctions Proceedings
In federal litigation, few procedural issues carry as much practical weight as arbitration agreements. Whether a claim belongs in court or before a private arbitrator dictates the forum, the timetable, the procedural posture, and frequently the cost of the dispute. A recent order from the U.S. District Court for the Central District of California, followed by supplemental briefing on sanctions, highlights just how significant that threshold determination can be when it is overlooked.
The case, Golikov v. Walmart Inc., arose from consumer protection claims involving retail food products. But the underlying merits became secondary once it emerged that the plaintiff had agreed to arbitrate disputes relating to her purchase — a fact that had not been identified at the outset of the case. The court ultimately awarded sanctions against plaintiff’s counsel, though the amount of those sanctions is still pending. Walmart has since submitted briefing outlining the fees it incurred after the arbitration agreement came to light, leaving it to the court to determine what portion of those fees should be reimbursed.
The scenario offers more than a cautionary tale. It provides a valuable reminder to litigators — on both sides — of the importance of confirming whether a binding arbitration agreement exists at the earliest stage of any dispute. This is not about assigning blame; it is about understanding how procedural accuracy affects the trajectory, cost, and fairness of a case.
Understanding the Court’s Ruling
In its November 6, 2025 order, the court found that plaintiff’s counsel had acted unreasonably in failing to correct a key factual allegation: that the plaintiff purchased the product in a Walmart store. In reality, she purchased it online, which meant her transaction was governed by Walmart’s website Terms of Use, including a mandatory arbitration provision and class-action waiver.
This distinction mattered enormously. A purchase in a brick-and-mortar store would not automatically trigger an online terms-of-use agreement. A purchase through Walmart’s website did. By failing to recognize or verify the nature of the purchase, the parties litigated in federal court for months before anyone identified the arbitration agreement.
Once the agreement surfaced, it altered the case in three meaningful ways:
It rendered the core claims subject to mandatory individual arbitration
The claims should not have proceeded in federal court at all.It invalidated the plaintiff’s ability to represent a class
The very premise of class certification — that the named plaintiff could serve as an adequate representative — was no longer viable.It meant earlier litigation work had been unnecessary
Motions to dismiss, class certification proceedings, discovery, and even a motion to decertify all took place under an assumption that the plaintiff’s claims properly belonged in court.
The court granted Walmart’s motion for sanctions and held that plaintiff’s attorneys were responsible for the fees incurred as a result of the oversight. What remains for the court now is to determine the appropriate amount.
Walmart’s Supplemental Fee Submission
Following the sanctions order, Walmart filed a detailed supplemental brief documenting the attorney’s fees it seeks. According to the submission, the company incurred $745,422.75 in legal fees attributable to litigation that would not have occurred had the arbitration agreement been identified at the outset.
The fee request covers six categories:
Motion to dismiss the First Amended Complaint
Answering the amended complaint
Opposing class certification
Preparing a Rule 23(f) petition
Responding to and conducting discovery
Moving to decertify the class
It also includes time spent preparing the sanctions motion and the supplemental briefing now before the court. Each category is supported by timekeeper breakdowns, hourly rates, and detailed explanations of the tasks involved.
The court has not yet ruled on the reasonableness of the amount requested. The broader lesson, however, is already clear: when an arbitration agreement exists, early awareness of that fact shapes every legal and strategic choice that follows.
Why This Matters for Litigators
The situation in Golikov underscores a procedural truth that applies across practice areas. Whether a case involves consumer law, employment disputes, commercial contracts, or business torts, identifying the correct forum is essential to ensuring efficient and fair resolution.
Here are three practical takeaways for litigators who regularly navigate arbitration clauses:
1. Confirm the Transaction Pathway Immediately
If a dispute arises out of a transaction, the first question should be: Where and how did the transaction occur?
In consumer cases, this may involve distinguishing between in-store versus online purchases. In employment cases, it may mean identifying whether the employee electronically acknowledged onboarding documents. In commercial settings, it may involve verifying whether digital terms were accepted during contract formation.
Small distinctions in how a transaction occurred can determine whether an arbitration agreement governs the dispute.
2. Verify the Terms of Use or Contract Documents
Many clients assume they know what terms apply to their transactions. But assumptions are risky. Litigators should:
Retrieve the actual version of the terms in effect on the transaction date
Confirm the client’s assent method (e.g., clickwrap, browsewrap, signature)
Ensure that record systems reflect accurate dates and account data
A five-minute verification step at intake can prevent months of litigation conducted in the wrong forum.
3. Assess the Impact on Class Claims Early
Arbitration agreements commonly include class-action waivers. That means:
A named plaintiff subject to an arbitration clause may not be eligible to serve as class representative
Putative class claims may need to be reframed or narrowed
Counsel must be alert to substitute plaintiffs or alternative legal theories
Even when plaintiffs believe they have multiple purchases, courts will evaluate whether the representative’s claims align with the alleged class-wide injury. Misidentifying the governing transaction can undermine the entire class structure.
A Neutral Observation: Litigation Efficiency Helps Everyone
The court’s sanctions order does not suggest that mistakes never happen. Instead, it emphasizes that attorneys have an obligation to verify material facts that affect the forum and trajectory of the case. The decision should be read less as a critique and more as a procedural reminder: when arbitration agreements exist, they exert a substantial influence on how disputes must proceed.
For defense counsel, early identification of arbitration rights allows timely motions to compel arbitration and avoid unnecessary federal litigation. For plaintiff’s counsel, the same diligence ensures accurate assessment of class viability, claim strategy, and the risks associated with pursuing court litigation.
Most importantly, for clients — whether businesses, individuals, or employees — early clarity about arbitration prevents unnecessary expense and avoids the emotional toll of protracted litigation.
What This Means for Arbitration Professionals
From the neutral’s perspective, the case illustrates why arbitration agreements continue to play a central role in modern dispute resolution. They offer:
A defined forum
Predictable procedures
Flexibility in scheduling
A more efficient path toward resolution
But these benefits only materialize when the agreement is recognized and enforced early. When overlooked, parties risk engaging in duplicated efforts — litigating in court only to ultimately arbitrate the same dispute.
At Nationwide ADR, the focus remains on helping litigants and counsel navigate these procedural inflection points. Whether through arbitration, mediation, Early Neutral Evaluation, or early dispute resolution strategies, the goal is always the same: to help parties find clarity and resolution without unnecessary detours.
Conclusion
The Golikov proceedings offer a clear reminder of the importance of verifying whether an arbitration agreement governs a dispute. The court has already determined that sanctions are appropriate, and it will soon determine the amount. But the enduring takeaway for practitioners is procedural rather than punitive: a single overlooked fact about how a transaction occurred can shift a case from federal court to private arbitration, reshape the class landscape, and affect hundreds of hours of litigation effort.
Ensuring accuracy on that point at the outset is not only prudent legal practice — it is essential to serving clients effectively.