Lumber Liquidators Faces Lawsuits Over Dangerous Formaldehyde Levels

Lumber Liquidators Faces Lawsuits Over Dangerous Formaldehyde Levels

Posted By Golomb & Honik, P.C. || 13-Mar-2015

Mere days after 60 Minutes reported on the allegedly high formaldehyde levels found in certain wood flooring products sold by Lumber Liquidators, two lawsuits have been filed. The first complaint, filed in a U.S. District Court in California, alleges Lumber Liquidators violated both federal and state laws. The California lawsuit claims that the company sold laminated wood flooring products, manufactured in China, which contained extremely high formaldehyde levels. The levels of formaldehyde contained in the flooring products are allegedly high enough to cause serious health risks. The plaintiffs in the California case are a family from Santa Clarita, California. A second lawsuit against Lumber Liquidators was filed on Thursday, March 5 th, in Florida. This $5 million class-action lawsuit accuses the company of deceptive manufacturing, labeling and sales of toxic laminate flooring causing financial losses to those individuals that purchased the flooring products.

The national consumer protection and product liability lawyers at Golomb & Honik, P.C. are currently investigating claims against Lumber Liquidators and dangerous levels of formaldehyde. If you or someone you love has suffered injury or financial losses because of a Lumber Liquidator product, please call Golomb & Honik, P.C. today at (215) 278-4449 immediately to evaluate your case.

What is Formaldehyde?

When we hear the word "formaldehyde," most of us recall our frog-dissecting days in junior high biology class. Formaldehyde is a colorless gas primarily used in embalming. The gas has a strong odor, and is flammable at room temperatures. Formaldehyde is found in such everyday products as paint, glue, some cosmetics and medications, fabric softener, resins, dishwashing liquid and some building and flooring materials. The properties of formaldehyde offer a low-cost way to both bind and preserve. Unfortunately, formaldehyde is a known carcinogen.

The Dangers of Formaldehyde

Short-term exposure to high levels of formaldehyde can irritate the skin, nose, eyes and throat. Longer exposure can lead to serious respiratory problems, leukemia and specific cancers. Industrial workers exposed to excessive levels of formaldehyde have shown increases in cancer nose and throat cancers in particular. While low levels of formaldehyde are allowed in building and flooring materials, the federal government and some individual states have set formaldehyde limits.

The National Institute for Environmental Health and Sciences recommends consumers purchase only items labeled CARB Phase 1 or CARB Phase 2 (California Air Resources Board). This labeling presumably labels flooring as either ultra-low emitting formaldehyde or no-added formaldehyde (NAF). While it certainly makes sense to read and understand formaldehyde labeling on flooring and construction materials, the Lumber Liquidator laminate flooring in question was labeled as CARB Phase 2. This false labeling has led to the current Lumber Liquidator firestorm associated with Chinese manufactured, formaldehyde-laden flooring.

Other Costs Associated with Lumber Liquidator Formaldehyde Flooring

Consumers who have purchased Lumber Liquidator flooring may be entitled to recover money based on the diminished value of the product. Further, these consumers may now incur exorbitant costs associated with removing the dangerous formaldehyde flooring and replacing it with a safer product. This financial burden should not be the consumer’s responsibility. Yet, removal of potentially dangerous and carcinogenic flooring is imperative for your health - and for the health of your family members.

The Ghost of Chinese-Made Building Materials Resurfaces?

The current allegations of the Chinese-manufactured flooring are reminiscent of the Chinese drywall debacle in 2008-2009. Several hurricanes, along with a construction boom, led to a shortage of U.S. drywall. More than 500 million pounds of what was later found to be defective drywall was used in thousands of residential homes, primarily in Florida. The drywall gave off gases strong enough to corrode metal, causing those living in the homes to suffer headaches, coughs, breathing difficulties, bloody noses, asthma attacks and eye problems.

Homeowners complained of a strong sulfur odor, power outages, sparking electrical outlets, overheating of electrical devices, electrical shocks and blackened metal components in the home. While the courts awarded the American building company $40 million from the Chinese manufacturer to be paid to families harmed by the defective drywall, none of the families have yet to see a penny of that money.

Who Was the Original "Whistle-Blower?"

Lumber Liquidators can thank a twenty-five year old blogger and short seller for the 60 Minutes allegations as well as the subsequent lawsuits and the company's stock plunge. A dropout from UCLA's doctoral program in finance, Xuhua Zhou, a short seller, took a particular interest in Lumber Liquidators over two years ago. The young man followed the company's gross profit margins closely, and when he saw a dramatic surge in those profits, he dug deeper. Zhou found Lumber Liquidators sourced some of its flooring products from China. Born and raised in China, Zhou had experience in researching Chinese suppliers. The depth of that research astonished many. Whitney Tilson, well-known short seller, noted, " It's pretty amazing what he did on his own."

The 60 Minutes Story

Zhou's research into the outsourced flooring eventually led to the 60 Minutes piece which showed managers at three separate Chinese factories admitting to placing false labeling on the flooring in question. The labeling made it look like the flooring met California regulations, when, in fact, it did not. A California environmental attorney, Richard Drury, ordered tests on 150 boxes of the flooring. Those tests showed the average levels of formaldehyde in the Lumber Liquidators flooring manufactured in China was six to seven times more than the state of California allows. Some of the boxes tested as much as twenty times higher than allowed levels. Drury told Anderson Cooper there could be " tens of thousands of households" in California alone which have Lumber Liquidators Chinese manufactured laminate flooring which exceeds allowed formaldehyde levels. Nationwide, this number could be hundreds of thousands. Lumber Liquidators officials continue to maintain their commitment to consumer safety while denying the allegations associated with the current lawsuits.

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