Family Dollar ordered to pay $41.7 million in settlement for rat-infested Arkansas warehouse

Family Dollar Stores, Inc. has agreed to pay a settlement of $41.7 million after allegations were made that it had shipped unsanitary products from a warehouse in West Memphis, Arkansas. The U.S. Department of Justice announced this settlement on Monday.

According to the Department of Justice (DOJ), the settlement stands as the most significant financial criminal penalty to date in a food safety case. As a subsidiary of Dollar Tree, Inc., the company has agreed to plead guilty to a misdemeanor count. This count is for causing FDA-regulated products to become adulterated due to unsanitary conditions during storage.

According to a news release from the DOJ, company officials have confirmed that certain employees were already aware of the rodent issue in January 2021. Despite this knowledge, the company continued to ship products from the warehouse until January 2022. The Food and Drug Administration conducted an investigation and found evidence of “live rodents, dead and decaying rodents, rodent feces, urine, and odors, and evidence of gnawing and nesting throughout the facility.” The affected warehouse supplied products to 404 stores located in Alabama, Missouri, Mississippi, Louisiana, Arkansas, and Tennessee.

In February 2022, the company initiated a recall for all products, which encompassed drugs, medical devices, food products, and cosmetics that were sold in stores serviced by the warehouse since January 1, 2021, according to the agreement by the DOJ. As part of the recall process, the facility underwent fumigation, and a total of 1,270 rodents were exterminated.

Jonathan D. Ross, the U.S. Attorney for the Eastern District of Arkansas, emphasized the importance of consumer trust in products purchased from retail stores like Family Dollar. He expressed his disbelief that despite being aware of the rodent and pest problems at its distribution center in Arkansas, Family Dollar chose to ship products that were both unsafe and unsanitary.

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The Department of Justice stated that the company is required to fulfill rigorous corporate compliance and reporting obligations for the next three years.

“We have fully resolved the issues with the DOJ and are now focused on moving forward with our business transformation, safety procedures, and compliance initiatives,” said Rick Dreiling, the chairman and CEO of Dollar Tree. “Upon joining Dollar Tree’s Board of Directors in March 2022, I was deeply disappointed to discover the unacceptable issues at one of Family Dollar’s facilities. Since then, and especially since taking on the role of CEO, we have been dedicated to assisting Family Dollar in resolving this matter and implementing substantial improvements to our policies, procedures, and physical facilities to prevent any recurrence.”

Dollar Tree has announced its plans to open a new distribution center in West Memphis in the coming fall. According to a news release by the company, this new facility will create job opportunities for 300 individuals.

Dollar Tree is currently facing a lawsuit from Arkansas in 2022. This ongoing case is currently being heard in Pulaski County Circuit Court. Dollar Tree has submitted a motion to dismiss the case, and Arkansas has until March 15 to provide a response, as stated in court records.

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