Lumber Liquidators Settles Justice Dept. Charges Over Illegal Flooring

Lumber Liquidators has reached a $10 million settlement with the Department of Justice (DOJ) over problems with hardwood flooring, which was allegedly harvested from protected forests. 

The company announced the settlement in a press release issued on October 7, saying that the agreement resolves charges filed against Lumber Liquidators by the Environment and Natural Resources Division of the DOJ.

The case is not connected to ongoing claims and complaints about problems with Lumber Liquidators laminate flooring imported from China, which has been found to emit dangerous levels of formaldehyde.

These charges, including violations of Custom law and the Lacey Act, stem from a 2013 investigation by the DOJ which revealed that some of the hardwood flooring the company claimed came from China was actually made of illegal wood harvested from protected forests in eastern Russia and possibly Myanmar.

The Lumber Liquidator settlement involves a guilty plea to the charges and an agreement to pay a $7.5 million fine, $969,175 in forfeiture payments, and to give community service contributions of $880,825 to the National Fish and Wildlife Foundation and $350,000 to the Rhinoceros and Tiger Conservation fund.

In addition to the fines and penalties, the company has entered into an Environmental Compliance Plan with the DOJ to ensure that the chain of custody of the wood it sells can be verified from tree to consumer.

“We have invested significant time and resources to strengthen our quality assurance procedures, from enhanced protocols designed to verify licensing, certification and regulatory compliance as well as product sample testing,” Lumber Liquidator’s Chief Compliance and Legal Officer, Jill Witter, said in the press release. “We are also committed to strengthening our tools and training programs to encourage secure and anonymous reporting of any potential concerns.”

The settlement comes as the a number of Lumber Liquidator class action lawsuits and individual claims have been filed against the company by individuals and companies impacted by high levels of formaldehyde in its imported Chinese laminate flooring.

The complaints have been brought following a segment that aired earlier this year on 60 Minutes, which found that certain Lumber Liquidator flooring imported from China and sold in California failed to meet the state’s formaldehyde emissions standards.

Formaldehyde is a chemical used to manufacture building materials, resins, household products and is used as an embalming agent. It is classified as a probable carcinogen by the EPA and was determined by the National Academy of Sciences to cause cancer in humans. However, the EPA has never passed regulations which set acceptable formaldehyde gas levels for flooring.

Common symptoms of exposure to formaldehyde may include respiratory symptoms, eye, nose and throat irritation, headaches, nausea, chest pain, vomiting and rashes. The chemical has been linked to some forms of cancer and leukemia.

The number of cases have continued to increase amid concerns that problems with Lumber Liquidator flooring may be impacting thousands of homes throughout the U.S.

On May 7, Lumber Liquidators halted to sales of the flooring. The company also faces an investigation by the U.S. Consumer Product Safety Commission and a number of states.

On June 12, the U.S. Judicial Panel on Multidistrict Litigation (JPML) indicated that nearly 125 complaints currently pending in federal district courts nationwide will be centralized before U.S. District Judge Anthony J. Trenga in the Eastern District of Virginia.