Family Dollar to pay record $41 million fine for rodent-infested warehouse in Arkansas
A yearslong investigation into a rodent-infested warehouse in West Memphis, Arkansas, has ended in a multimillion dollar settlement.
On Monday, Family Dollar Stores, LLC pleaded guilty to holding food, drugs, medical devices and cosmetics under insanitary conditions, according to a U.S. Department of Justice news release.
The plea agreement was in relation to a February 2022 U.S. Food and Drug Administration investigation that discovered unsanitary conditions, including more than 1,000 rodents, inside Family Dollar's distribution center located at 1800 Family Dollar Parkway in West Memphis.
Family Dollar, which is a subsidiary of Dollar Tree Inc. (the companies merged in 2015), will have a forfeiture monetary judgment worth $41,475,000, the largest-ever monetary criminal penalty in a food safety case. The plea agreement includes a $200,000 fine and will require a strict corporate compliance agreement for the next three years, according to the DOJ news release.
“When consumers go to the store, they have the right to expect that the food and drugs on the shelves have been kept in clean, uncontaminated conditions,” acting associate Attorney General Benjamin C. Mizer said in a statement. “When companies violate that trust and the laws designed to keep consumers safe, the public should rest assured: The Justice Department will hold those companies accountable.”
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An FDA inspection in January 2022 revealed rodent nests along with rodent feces and both alive and deceased rodents inside the facility. A resulting fumigation of the facility resulted in the extermination of 1,270 rodents, according to the plea agreement.
The infestation dated back to August 2020 when the company began receiving reports of pest issues from stores. In February 2022, the company closed 404 stores in Alabama, Arkansas, Louisiana, Missouri, Mississippi and Tennessee that were impacted by the conditions and received shipments from the West Memphis distribution center. That same year, Tennessee state Rep. G.A. Hardaway called for an investigation into Family Dollar.
Criticism of Family Dollar's unsanitary conditions and calls for improvement among Memphis officials and community leaders dates back to 2019.
“Having reached full resolution with the Department of Justice, we are continuing to move forward on our business transformation, safety procedures and compliance initiatives,” Dollar Tree CEO Rick Dreiling said in a statement. “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.”
According to a Dollar Tree Inc. news release, some of the new health and safety compliance regulations include hiring a new chief legal officer, a new chief ethic and compliance officer, more food safety leadership positions, improved training programs, and maintaining an independently audited certification compliance.
The West Memphis facility closed in 2022, with 320 staff laid off due to the closure. In October 2023, Family Dollar announced a $100 million investment in the West Memphis distribution center and plans to reopen the site in fall 2024. The renovated 850,000-square-foot facility will bring more than 300 jobs. The distribution center will serve more than 1,000 regional stores, according to a news release.
Neil Strebig is a journalist with The Commercial Appeal. He can be reached at neil.strebig@commercialappeal.com, 901-426-0679 or via X: @neilStrebig.
This article originally appeared on Memphis Commercial Appeal: Family Dollar pleads guilty, fined $41M over rodent-infested warehouse
