Arkansas Attorney General Leslie Rutledge filed a lawsuit Thursday accusing Family Dollar Stores Inc. and Dollar Tree of selling products that were potentially hazardous or contaminated because of exposure to a rodent infestation at its distribution center in West Memphis.
The lawsuit, filed in Pulaski County Circuit Court, states that Family Dollar made significant profits while knowingly exposing consumers to potentially hazardous or contaminated products by allowing and failing to prevent massive rodent infestations and unsanitary conditions with the distribution center.
The lawsuit seeks punitive damages, restitution and civil penalties through the Arkansas Deceptive Trade Practices.
Shannon Halijan, a deputy with the attorney general's Public Protection Department, said the office plans to seek a $10,000 fine per product distributed from the warehouse during the two-year period the rodent infestation occurred.
"Each individual package of pasta, each individual package of potatoes could be a $10,000 fine for Family Dollar and Dollar Tree," Rutledge said during a news conference Thursday.
The attorney general also encouraged consumers who may have obtained contaminated products to reach out to her office and file complaints.
The lawsuit also seeks the suspension or revocation of Family Dollar's ability to do business in Arkansas. The company has 85 stores in the state.
"If they can't control their rat problem, then that is what we will pursue," Halijan said.
Rutledge said the office usually allows businesses time to correct their practices before seeking to end operations.
"We know that Family Dollar and other small stores across the state serve the purpose of providing medication, essentials, food and other items to Arkansans particularly in rural areas, so we don't want to wipe out a source of groceries or medicines," Rutledge said. "But if those groceries and medicine are not safe, then we need someone else providing those services."
The complaint states that Family Dollar, under the parent company Dollar Tree Inc., knew about the rodent infestation for years but allowed unsafe products to be sold at hundreds of stores in Arkansas and five other states throughout the region.
"Like many of you I was horrified a little while ago when I learned about the rodent infestation at Family Dollar's West Memphis distribution center," Rutledge said. "Since at least January of 2020 Family Dollar had knowledge of the long-lasting, massive rodent infestation."
Rodent contamination can cause salmonella and infectious diseases, the U.S. Food and Drug Administration said earlier this year as it recommended that consumers throw out all drugs, medical devices, cosmetics and dietary supplements purchased from the affected stores. The agency's alert covered products bought from the stores since January 2021.
"Family Dollar has had knowledge of this dangerous and massive rodent infestation for over two years, yet they continued to sell and profit from potentially contaminated goods," Rutledge said in a news release announcing the lawsuit. "Consumers lost money and could have lost their lives."
The West Memphis distribution center at 1800 Family Dollar Parkway opened in the mid-1990s with about 850,000 square feet, according to the company's website.
The Arkansas Department of Health inspected the distribution center multiple times in 2021, according to documents filed in Pulaski County Circuit Court. During an on-site inspection March 3, 2021, inspectors reported seeing significant rodent activity where human food and pet food were stored.
Inspectors also noted that members of Family Dollar management stated they were aware of the rodent issue, court documents said. On April 2, 2021, Arkansas Department of Health inspectors reported that effective measures were not being taken to stop the infestation.
"The Department of Health at that time didn't have the power to shut down that facility and take action against it, and please keep in mind during this time the Department of Health was in the middle of a pandemic and was extremely shorthanded," Rutledge said.
The U.S. Food and Drug Administration's alert earlier this year cited unsanitary conditions at the distribution facility, and said the rodent infestation could have potentially contaminated products sent to six states.
FDA inspectors came across live rodents, rodent droppings and dead rodents in "various states of decay" during an inspection of the facility, according to their report. Foul odors -- indicative of a decaying animal carcass -- also came from several places within the distribution center, the report said.
Investigators found rats climbing up scaffolding and reported a foul stench in a pallet of clothing and apparel, according to the report. Near that pallet was a separate pallet that had rodent droppings on boxes.
Investigators also discovered rodent droppings on a pallet of flour and reported that two mice exited from product bags that had been gnawed open, according to the report.
"Your firm failed to implement appropriate and timely corrective action to ensure that product that may be injurious to health due to potential contamination by rodent urine and excreta and/or had been chewed or gnawed by rodents, or may have been subjected to filth conditions such as dirt and debris, was not distributed to your stores," the report said.
Investigators also noted that Family Dollar had no system for tracking store reports of potentially contaminated products received by the distribution facility.
During a fire drill at the distribution facility in October 2021, dozens of rats were seen running around because of the loud alarm, according to a general manager.
That same month the company abandoned a break room and a control center room because of the foul stench of rodents, according to the report. The FDA report described a "putrid odor" permeating from the control center. After fumigating the facility, more than 1,100 dead rodents were collected, officials said.
"No one should be subjected to products stored in the kind of unacceptable conditions that we found in this Family Dollar distribution facility," Judith McMeekin, an associate commissioner for regulatory affairs with the U.S. Food and Drug Administration, said in February.
Rutledge said Thursday that a review of the company's internal records indicated the collection of more than 2,300 rodents from March 29 and Sept. 17, 2021.
"Not only was there a rat infestation, there were birds, insects and other vermin inside the facility," she said.
Family Dollar issued a voluntary recall in February of particular items sold after Jan. 1, 2021, at hundreds of stores throughout Arkansas, Alabama, Louisiana, Mississippi, Missouri and Tennessee.
"It may be that the other states will be taking action as well," Rutledge said, "but we will be looking into the facility itself and the 85 stores in Arkansas."
Shannon Halijan (right), deputy of the state’s public protection department, speaks during Attorney General Leslie Rutledge’s press conference Thursday announcing the lawsuit filed against Family Dollar Store. (Arkansas Democrat-Gazette/Staci Vandagriff)