Lumber Liquidators is facing a massive formaldehyde lawsuit after it knowingly sold Chinese laminate flooring that contained toxins. A recent 60 Minutes report uncovered the company’s decision to stop using one supplier, claiming they had lied to the public and investors. The company has since paid out $23 million to settle the class-action lawsuit. While the case is still ongoing, the company has already made headlines by paying out millions of dollars to compensate victims of formaldehyde exposure.
The company has responded by denying the allegations.
But the firm has a long history of success in product defect cases. The firm recently settled a similar class action with Trex Company Inc. for $825 million. The lawsuit also alleges that the company misrepresented investors, concealed information, and failed to warn consumers about potential risks. It’s important to note that the plaintiffs are not just seeking compensation, but monetary damages as well.
The lawsuit claims that Lumber Liquidators sold laminate flooring that contained toxic levels of formaldehyde. The company denies this but has pleaded guilty to misleading investors and paying $36 million in settlements to 760,000 customers. The firm’s Chinese-made laminate flooring was tested and found to contain formaldehyde 13 times higher than the California formaldehyde limit. The company has also withdrawn from the sale of laminate flooring and terminated its employees who committed wrongdoing. In addition to paying the settlements to 760,000 customers, the company has also paid out $23 million in fines and sanctions for illegally smuggled wood from endangered tigers and Russian habitats. Despite these significant settlements, Lumber Liquidators still have not addressed the formaldehyde problem.
The Lumber Liquidators formaldehyde lawsuit has been consolidated and transferred to multi-district litigation.
The suit focuses on the fact that the company failed to disclose that its laminate flooring contained dangerous levels of the chemical. In response to the class action, the retailer has paid settlements to 760,000 customers. Although Lumber Liquidators has denied the allegations, the company has ceased selling laminate flooring from China since the 60 Minutes program. During the investigation, the company terminated its employees who engaged in wrongdoing. In addition, the business has paid out $23 million in fines and sanctions for illegally smuggling wood from endangered tigers and Russian habitats.
Lumber Liquidators has disputed the 60 Minutes segment’s allegations and has admitted to misleading investors. Nonetheless, it has voluntarily settled with 760,000 customers, resulting in $36 million settlements. The company has also stopped selling Chinese laminate flooring. In May 2015, the company ceased selling the Chinese laminate flooring after a government investigation found that the flooring contained toxic levels of formaldehyde. Moreover, it has also terminated all of its employees involved in the wrongdoing. The latest development in the case is the payment of $23 million in fines and sanctions. But this did not address the formaldehyde problem.
Lumber Liquidators have also agreed to settle the case.
The company has admitted that it misled investors and sold illegally-sourced wood. In addition, it has stopped selling its Chinese laminate flooring and has terminated all of its employees involved in the wrongdoing. Despite the legal action, Lumber Liquidators have not addressed the formaldehyde issue. The company has repaid $36 million in fines and sanctions.
While the lawsuit was filed in the Northern District of California, Lumber Liquidators has agreed to pay $33 million in penalties. The company has also entered a corporate resolution with the Securities and Exchange Commission for securities fraud. The investigation resulted in the suspension of sales of Chinese laminate flooring. The case has already prompted Lumberliquidators to pay a $33 million penalty.
The company has agreed to settle the case for $33 million. As a result of the settlement, Lumber Liquidators has agreed to pay out the damages to the plaintiffs. In addition to settling the case, the company also agreed to stop the sale of Chinese laminate flooring in the U.S. and terminated all of its top executives. However, this does not mean the company has fully resolved the lawsuit, and it is a class-action lawsuit.