Family Dollar to pay $42 million for shipping food from rat-infested warehouse to stores

Family Dollar Stores has agreed to pay a nearly $42 million fine after pleading guilty on Monday to storing consumer products including food, drugs, cosmetics and medical devices in a rat-infested warehouse, the Department of Justice has announced.

The subsidiary of Dollar Tree agreed to pay the largest-ever monetary criminal penalty in a food safety case for allowing products to become contaminated at a filthy distribution center in West Memphis, Arkansas. The company admitted that the facility shipped Food and Drug Administration-regulated products to more than 400 Family Dollar stores in Alabama, Arkansas, Louisiana, Mississippi, Missouri and Tennessee, according to the DOJ.

The company started getting reports in August 2020 of mouse and pest issues with deliveries to stores, and by the end of the year some stores reported getting rodents and rodent-damaged products from the warehouse, according to the plea agreement. The company admitted that by January 2021 some employees were aware that the insanitary conditions were causing products to become contaminated.

The warehouse continued shipping products until January 2022, when an FDA inspection found live rodents, dead and decaying rodents, rodent feces, urine and odors, as well as evidence of gnawing and nesting throughout the facility. Nearly 1,300 rodents were exterminated and the company on Feb. 18, 2022, launched a massive recall of products sold by 404 stores serviced by the warehouse.

"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," stated Brian Boynton, principal deputy assistant attorney general and head of the Justice Department's civil division.

"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," Dollar Tree Chairman and CEO Rick Dreiling stated in a company release. "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."

In a separate incident in October, Family Dollar recalled hundreds of consumer products sold in 23 states that had been stored improperly. That recall followed another in May for certain Advil products stored by Family Dollar at the wrong temperature.

Dollar Tree operates 16,622 stores across 48 states and five Canadian provinces. 

Kate Gibson

Kate Gibson is a reporter for CBS MoneyWatch in New York.