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Food City Settles Opioid Lawsuit for $44.5M

As part of settlement, grocer agrees to provide dedicated employment opportunities for Tennesseans recovering from addiction
Marian Zboraj, Progressive Grocer
Opioid pill bottle
Tennessee Attorney General’s lawsuit against Food City is one of many against food retail companies accused of opioid-related misconduct.

K-VA-T Food Stores, Inc., parent company of Food City, has entered into an agreement to end two opioid-related cases in Knox County and Sevier County Tennessee. The state Attorney General Jonathan Skrmetti announced a $44.5 million settlement with the company. K-VA-T believes the settlement agreement is in the best interest of all parties.

The Tennessee Attorney General claimed Food City “violated the Tennessee Consumer Protection Act, violated the Tennessee’s public nuisance statute at three Knoxville-area stores, and created a common law public nuisance by endangering the health of Tennesseans and interfering with the commercial marketplace."

[Read more: “Albertsons Cos. Wants to Help Treat Opioid Use Disorder”]

The allegations focus primarily on circumstances from more than a decade ago, according to a statement released by K-VA-T. The company has continually disputed any allegations of misconduct made in these actions. Its agreement states that it is not an admission or evidence of any liability or wrongdoing. 

Most of the $44.5 million settlement will go to Tennessee’s Opioid Abatement Fund to support local efforts addressing the opioid epidemic.

According to the Tennessee Attorney General's office, K-VA-T has agreed to ensure future compliance by providing additional training to pharmacy staff, updating the prescription-validation process, and monitoring and reporting data related to suspicious activity. The settlement further includes an agreement by Food City to provide dedicated employment opportunities for Tennesseans recovering from opioid addiction.

K-VA-T stated it is committed to the communities it serves and has pledged its support of local drug rehabilitation centers and their efforts to assist persons in recovery to lead more productive

“Our Consumer Protection Division remains relentless in the pursuit of justice and I am proud of their aggressive enforcement in this case,” said Attorney General Skrmetti. “By paying a hefty price to resolve past misconduct, Food City provides critical resources to save lives and protect families and can now get back to the business of serving its customers and supporting Tennessee communities.”

This is only example of thousands of cases nationwide brought against manufacturers,
distributors and retailers of prescription opioid products. For example, The Kroger Co. recently shared details behind its own opioid settlement. 
The national grocer reached an agreement in principle with plaintiffs to settle the majority of opioid claims that have been or could be brought against it. Along with the execution of certain non-monetary conditions that are still in discussion, Kroger has agreed to pay up to $1.2 billion to states and subdivisions, as well as $36 million to Native American tribes in funding for abatement efforts. Both of those sums will be paid over 11 years in equal installments, and approximately $177 million will be paid over six years to cover attorneys’ fees and costs.

Rite Aid has also been named a defendant in lawsuits that alleged it helped fuel the opioid crisis in the United States. The U.S. Department of Justice in March sued Rite Aid, accusing the pharmacy chain of missing "red flags" as it illegally filled hundreds of thousands of prescriptions for controlled substances, including opioids, according to a Reuters report, which also noted that Rite Aid also is facing lawsuits over opioids by state and local governments around the country. 

Food City’s parent company, Abingdon, Va.-based K-VA-T Food Stores, operates over 150 retail outlets throughout southeast Kentucky, southwest Virginia, east Tennessee, north Georgia and Alabama. K-VA-T is No. 70 on The PG 100, Progressive Grocer’s 2023 list of the top food and consumables retailers in North America. Cincinnati-based Kroger is No. 4 on The PG 100 and Philadelphia-based Rite Aid is No. 22.

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