Lumber Liquidators Inc. has reached a $36 million settlement with two classes of consumers in Virginia federal court multidistrict litigation (MDL) over its allegedly defective and hazardous laminate flooring. One class had alleged that the durability of the wood was not up to snuff, despite marketing statements to the contrary. The other class claimed that the wood contained levels of formaldehyde beyond the standard allowed. Under the agreement, Lumber Liquidators will pay out $22 million in cash and another $14 million in store credit. The company’s CEO, Dennis Knowles, told Law360 in an email:
The memorandum of understanding executed with the classes represents another important milestone. Over the past two and a half years, our new leadership team at Lumber Liquidators has been committed to significant internal and external measures to ensure the products we offer are safe, compliant and of the highest quality for all of our customers. These included the removal of the relevant product back in 2015.
The proposed agreement will have to be approved by the court. Anyone who bought Chinese-manufactured laminate flooring sold by the company between January 2009 and May 2015 will be eligible for cash or vouchers. The multidistrict litigation over the company’s Chinese-manufactured flooring was consolidated in June 2015. You will recall that in March 2015 CBS’ “60 Minutes” reported that the company’s Chinese-manufactured laminate flooring contained levels of formaldehyde beyond the standard allowed by the California Air Resources Board (CARB). Two years before that, the board told the company that some of its products had failed emissions testing, including some of the products eventually resold to the consumers in the litigation.
Lumber Liquidators retained another laboratory that confirmed at least some of its products’ emissions exceeded CARB standards. But despite that, the company didn’t change its website. It was reported that on the same day that CARB notified Lumber Liquidators of further CARB test results indicating impermissible formaldehyde levels (May 7, 2015), Lumber Liquidators suspended all sales of its products.
The case is Leticia Ruiz v. Lumber Liquidators Holdings Inc. et al., (case number 1:15-cv-02745) in the U.S. District Court for the Eastern District of Virginia.