San Francisco, CAThe ongoing woes at Lumber Liquidators continues with yet another Lumber Liquidators formaldehyde lawsuit filed at the end of March in the state of California. This lawsuit, however, differs slightly from previous lawsuits filed alleging an unsafe level of formaldehyde in the company’s imported composite flooring, but instead relates to the testing kits provided and ostensibly designed to monitor formaldehyde levels in the flooring.
There are allegations, however, that the design kits are faulty, inaccurate and poorly designed.
Lumber Liquidators had been doing a booming business vending inexpensive composite flooring imported from China. And while sales are still healthy according to a recent Q1 performance report by the corporation, sales took a hit last month following the airing of a 60 Minutes investigation that found evidence of unsafe levels of formaldehyde in the flooring. While it is a normal practice to use formaldehyde in the manufacture of composite flooring, it can be done safely with formaldehyde levels in glue held to a minimum, levels further mitigated by entrapment within the flooring.
The 60 Minutes investigative unit, however, found that it’s more expensive to manufacture flooring with lower levels of formaldehyde. A less-expensive manufacturing process utilizes a more liberal use of formaldehyde in the glue mixture. During its investigation, 60 Minutes traveled to the manufacturing facility in China and was told by an insider that while formaldehyde could be mitigated with a more expensive manufacturing process, Lumber Liquidators had opted for less expensive manufacturing. There were also allegations of incorrect labeling.
When faced with the allegations, principals of Lumber Liquidators indicated they had no knowledge of the mislabeling, or of the seriously high levels of formaldehyde in their products, and pledged to investigate forthrightly. 60 Minutes, meanwhile, took various samples of the flooring to independent labs, with the vast majority finding levels of formaldehyde escaping from the flooring that were beyond safe limits.
The most recent Lumber Liquidators lawsuit, filed late last month in San Francisco, alleges that the home testing kits provided by Lumber Liquidators to worried homeowners concerned about formaldehyde levels, were “bogus,” according to a summary of the lawsuit published in The Virginia Gazette (4/3/15).
The lawsuit claims the home testing kits, provided free by Lumber Liquidators, were “inherently unreliable” and “designed to under-report” the true levels of formaldehyde in the composite flooring. The class-action lawsuit, filed March 31 in US District Court, Northern District of California, represents plaintiffs from California, as well as Florida and Michigan. It is the fifth such class-action lawsuit alleging major problems with the formaldehyde levels in the best-selling composite flooring.
In a statement, the company said, “Lumber Liquidators is committed to providing our customers with safe, high-quality products. To reassure our customers, we have implemented an air quality testing program that includes testing by a third-party laboratory at no cost to the customer. We intend to defend ourselves vigorously against the claims asserted in this suit,” the statement said.
However, the Lumber Liquidators formaldehyde lawsuit involving the home testing kits, alleges the third party from whom Lumber Liquidators sourced the home testing kits, is not an independent entity but rather was being compensated by Lumber Liquidators
Net sales reported by Lumber Liquidators in the first quarter of 2015 were $260 million, an increase of 5.6 percent from the first quarter of 2014. However, the company went on to say that the “60 Minutes” piece had an impact, with net sales in March at $89.4 million, a decrease of 12.8 percent in comparison to March 2014.
“Consistent with company’s expectations as discussed in its March 12, 2015 business update, net sales in March 2015 were significantly weaker than trends in January and February, as net sales were negatively impacted by unfavorable allegations surrounding the product quality of the company’s laminates sourced from China,” the statement said.
Lumber Liquidators’ products have proven popular due to the price point and the overall popularity of composite flooring. Products are sold as safe for consumer use. However, health and safety advocates concerned with high levels of formaldehyde escaping from the flooring in an enclosed area, such as a home or a single room, point out a health risk that becomes exacerbated when the formaldehyde is not properly vented or dispersed.
The formaldehyde test kits - 10,000 of which were requested by consumers - are alleged to be non-compliant with California Air Resources Board (CARB) standards.
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