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June 28, 2017

Volume 17 Issue 52

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New Mexico Files Suit Against Dollar General

New Mexico’s attorney general filed a lawsuit against Dolgencorp LLC, owner of Dollar General, alleging the discount retail store chain engaged in unfair advertising and trade practices in selling its store brand motor oil. The suit also claims the oil diminished the state’s air quality.

Dollar General sell its DG Auto brand motor oil, in SAE 10W-30 and SAE 10W-40, both of which are manufactured to meet API Service Category SF, making them unsuitable for vehicles built after 1988. The company also sells API SA-quality DG Auto SAE-30, which is only suitable for vehicles built before 1930.

Prior to 2010 these oils were sold under a private label called Uni-lab, which featured advisory language on the front of the package warning customers the oil was unsuitable for most vehicles. When they were changed to the “DG Auto” label, however, the warning was place on the back of the bottle. The front label now reads, “lubricates and protects your engine.”

“The lawsuit is the result of a multi-month investigation into the sale of the obsolete motor oil in the State of New Mexico,” a spokesman for Attorney General Hector Balderas’ office said in an interview. The suit, filed June 6 in Santa Fe County’s First Judicial District Court, covers all Dollar General store brand oils sold in New Mexico between 2010 and Feb 2017.

A press release issued by the attorney general’s office alleges the company knowingly used misleading product placement and advertisement practices in addition to providing inadequate warnings that caused customers to unknowingly use motor oil that could harm their vehicles.

Dollar General positioned “its DG Auto obsolete motor oil immediately adjacent to the more expensive brand-name motor oils, wrongfully representing that its obsolete motor oil is lower-priced but comparable to the brand name products.” The formal complaint also criticizes advertising material for not including warning language.  

“The labeling on these products contains obvious and unambiguous language regarding the products’ intended and appropriate use,” said Dollar General Spokeswoman Crystal Ghassemi. Warning language is featured on the back label of every bottle. However, the lawsuit claims “a reasonable person has no reason to examine the back label of the DG Auto obsolete motor oil.”

The suit also accuses Dollar General’s oil of damaging engines, causing emissions control systems to fail or insufficiently function. This leads to an increase of pollutants into New Mexico’s air, which Balderas labels as a “common law public nuisance.”

Balderas calls for the company to provide sufficient representation and warnings for DG Auto oil, provide funds for a state-approved program to notify the company’s New Mexico customers of the damages caused by its oil and, after conducting inspections, replace any damaged components or entire vehicles if necessary.

Dollar General faces similar suits in 18 other U.S. states, including California, Maryland and a number of Midwestern states, though this is the first to add environmental damage to its allegations.