Virginia-based hardwood flooring retailer Lumber Liquidators Inc. has paid the California Air Resources Board $2.5 million to settle claims that the business sold, supplied or offered for sale composite wood products that ARB testing showed exceeded state formaldehyde limits.
ARB said Tuesday that the payment also settled state claims that Lumber Liquidators failed to take “reasonable, prudent precautions to ensure those products met such limits designed to protect public health.”
Lumber Liquidators has been in the national spotlight for more than a year, following a March 1, 2015, report by CBS’ “60 Minutes,” which raised questions about high levels of formaldehyde in Chinese-made laminate flooring. The company’s stock and sales plunged after the report aired.
ARB said inspections were done at Lumber Liquidators stores in California between September 2013 and May 2015. The agency said it obtained and tested boxes of laminate flooring samples that were labeled as compliant.
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ARB said it notified Lumber Liquidators that some of the tested samples exceeded clean-air limits related to formaldehyde, a colorless gas that is a toxic air contaminant, a known human carcinogen and a respiratory irritant.
Officials said the $2.5 million payment has been deposited into the California Air Pollution Control Fund, which pays for projects and research to improve California’s air quality.
In addition, the state said, Lumber Liquidators has agreed to conduct regular audits of suppliers and to randomly test composite core samples in accordance with ARB standards.
“Companies need to understand we expect compliance with our rules, and we will hold those accountable who do not comply,” ARB Enforcement Division Chief Todd Sax said in a statement.
In a separate statement, Lumber Liquidators CEO John Presley said: “We strengthened our quality-assurance procedures, launched the largest voluntary testing program in our nation’s history and, in May 2015, voluntarily suspended the sale of all laminate flooring sourced from China. We look forward to continuing to work with CARB to establish new industry standards for flooring product testing.”
Lumber Liquidators bills itself as North America’s largest specialty retailer of hardwood flooring, with 370 locations.