The New York Attorney Generals Office announced Monday that it reached a settlement fining Dollar General Corp. for the sale of obsolete motor oils unsuitable for most automobiles.
The company agreed to pay $1.1 million over the states complaints regarding lubricants and for selling expired over-the-counter medicines. The lubricant case involved Dollar Generals labeling and placement practices for store-branded API SF and SA motor oils.
The discount chain maintained that neither the oils nor its practices in selling them violated state or federal requirements, but it stopped selling them, said New Yorks Attorney General Letitia James.
"These Dollar General-branded motor oils use the same or similar nomenclature … on the bottles found on other brands of oil sold by Dollar General, which the API has given 'current' designations, and are placed next to and in the vicinity of the other motor oil brands on store shelves," the 18-page settlement stated.
The settlement added that Dollar General failed to post either on the shelves or the front of bottles that the products were unsuitable for use in most gasoline powered automobile engines built in the past three decades.
The American Petroleum Institute has declared API SA and SF both to be obsolete performance standards and advises that they are not suitable for most automobile engines built after 1930 and 1988, respectively.
The case indicated that the state was not satisfied by a real label advisory. In small print, the back of the SA product read, Use in modern engines may cause unsatisfactory engine performance or equipment harm, the settlement stated.
New Yorks motor oil complaints stemmed from an investigation that ran from March to July 2016, when undercover investigators from James office visited a number of Dollars Generals looking for expired over the counter medication. The investigators also found motors oils designated obsolete by API.
While not admitting that it violated any laws, Dollar General said it took immediate action to resolve the situation.
The company did not respond to questions from Lube Report but in a statement to CNBC said, We continue to believe that the DG-branded motor oil products at issue meet both the companys standards for quality and value, but also all applicable federal and state labeling, marketing and placement requirements where they are sold.
Mondays settlement is not part of a class-action lawsuit brought by 16 other states claiming Dollar General Generals cheaper, obsolete motor oils can damage modern vehicles.
The class action lawsuit contends Dollar General sold millions of quarts of its motor oils worth $156 million.