Family Dollar to Pay Largest-Ever Monetary Criminal Penalty in a Food Safety Case

Family Dollar Stores agreed to pay nearly $42 million in fines as part of a plea agreement with the Department of Justice in a product contamination case related to a rodent infestation at the company’s West Memphis, Arkansas, distribution center.

According to the Department of Justice, Family Dollar, a subsidiary of Dollar Tree Inc., entered into a plea agreement that includes a sentence of a fine and forfeiture amount totaling $41.675 million, the largest-ever monetary criminal penalty in a food safety case.

The plea agreement also requires Family Dollar and Dollar Tree to meet robust corporate compliance and reporting requirements for the next three years. U.S. Magistrate Judge Jerome T. Kearney presided over the company’s guilty plea and sentencing at the hearing.

In January 2022, an FDA inspection of the Arkansas distribution center revealed live rodents, dead and decaying rodents, feces, urine, and odors, and evidence of gnawing and nesting throughout the facility. Subsequent fumigation of the facility resulted in the reported extermination of 1,270 rodents.

“Consumers trust that products purchased from retail stores such as Family Dollar are safe,” said U.S. Attorney Jonathan D. Ross 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 unsafe and unsanitary products.”

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The DOJ said that on February 18, 2022, Family Dollar voluntarily recalled all drugs, medical devices, cosmetics, and human and animal food products sold since January 1, 2021, in the 404 stores the warehouse had serviced.

After the plea agreement announcement, the company released the following statement:

“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 then and even more directly when I assumed the CEO role, 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.”

Also, Dollar Tree recently announced that Family Dollar plans to return operations to West Memphis, Arkansas, with a fully reimagined and refreshed distribution center.

The company said the new facility, expected to be operational by fall 2024, reflects more than $100 million in current and anticipated future investments. The facility, expected to provide more than 300 new jobs for Arkansas workers initially, is being rebuilt with a strong emphasis on safety, sanitation, and compliance.