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Family Dollar to pay $41.7 million over rat-infested Arkansas warehouse

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(The Center Square) – Family Dollar Stores, Inc. will pay $41.7 million to settle claims it shipped unsanitary products from a rodent-infested warehouse in West Memphis, Arkansas, the U.S. Department of Justice said Monday.

The settlement is the largest monetary criminal penalty in a food safety case, according to the DOJ. The company, a subsidiary of Dollar Tree, Inc., agreed to plead guilty to one misdemeanor count of causing FDA-regulated products to become adulterated while being held under insanitary conditions.

Company officials said some employees were aware of the rodent problem in January 2021. The company continued to ship products from the warehouse until January 2022 after an investigation from the Food and Drug Administration showed evidence of “live rodents, dead and decaying rodents, rodent feces, urine, and odors, and evidence of gnawing and nesting throughout the facility,” according to DOJ news release. The warehouse served 404 stores in Alabama, Missouri, Mississippi, Louisiana, Arkansas and Tennessee.

The company issued a recall in February 2022 for all products including drugs, medical devices, food products and cosmetics sold in stores serviced by the warehouse since Jan. 1, 2021, the DOJ agreement said. The facility was fumigated and 1,270 rodents were exterminated.

“Consumers trust that products purchased from retail stores such as Family Dollar are safe,” said Jonathan D. Ross, U.S. Attorney for the Eastern District of Arkansas. “It is incomprehensible that Family Dollar knew about the rodent and pest issues at its distribution center in Arkansas but continued to ship products that were unsafe and insanitary.”

The company must also meet “robust corporate compliance and reporting requirements for the next three years,” the DOJ said.

“Having reached full resolution with the DOJ, we are continuing to move forward on our business transformation, safety procedures and compliance initiatives,” said Dollar Tree chairman and CEO Rick Dreiling. “When I joined Dollar Tree’s Board of Directors in March 2022, I was very disappointed to learn about these unacceptable issues at one of Family Dollar’s facilities. Since that time and even more directly when I assumed the role of CEO, we have worked diligently to help Family Dollar resolve this historical matter and significantly enhance our policies, procedures, and physical facilities to ensure it is not repeated.”

Dollar Tree plans to open a new West Memphis distribution center in the fall, which will employ 300, the company said in a news release.

Arkansas also sued the company in 2022. That case is still making its way through Pulaski County Circuit Court. Dollar Tree filed a motion to dismiss the case. Arkansas has until March 15 to respond, according to court records.

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