Lumber Liquidators Settles CA Formaldehyde Allegations For $2.5M

Embattled hardwood flooring company Lumber Liquidators will pay $2.5 million to settle allegations that some of its products violated California standards for formaldehyde.

Officials with the California Air Resources Board said that samples of Lumber Liquidators' Chinese-made laminate flooring showed elevated formaldehyde levels between September 2013 and May 2015.

“Companies need to understand we expect compliance with our rules and we will hold those accountable who do not comply," CARB enforcement chief Todd Sax said in a statement.

The controversy reached a head in March 2015 following a "60 Minutes" report about formaldehyde, a carcinogen, in Lumber Liquidators’ laminate flooring produced in China.

Although the company disputed the findings, it suspended sales of those products in May amid lagging stock prices, safety investigations and civil litigation.

President and CEO Robert Lynch departed the company unexpectedly later that month.

The Virginia-based company said that the settlement includes voluntary measures to ensure compliance with CARB formaldehyde requirements. Lumber Liquidators and CARB will also cooperatively work to develop "new industry standards" for flooring tests.

CARB said that Lumber Liquidators cooperated with its investigation, and the company emphasized that the review wrapped up without an admission of wrongdoing or findings of formal violations.

"We believe today's settlement will go a long way in helping us to execute our strategy, which includes rebuilding our brand and communicating — with clarity and candor — the value of our products to our customers and stakeholders," CEO John Presley said in a statement.

Lumber Liquidators added that CARB recognized a "lack of evidence of actual harm to public health, safety and welfare," but the Centers for Disease Control and Prevention last month reiterated that people should limit their exposure to the flooring to reduce cancer risks and alleviate respiratory symptoms.

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