Lumber Liquidators is now facing a second class action lawsuit.
Shareholders filed a lawsuit against the company on Nov. 26 seeking compensation for damages they say they sustained after the company was alleged to have imported certain wood products from the habitat of an endangered animal — a violation of U.S. law — and to have sold wood products tainted with elevated levels of formaldehyde. Now a group of people who have bought wood products from the company have filed the class-action suit seeking compensation for what they say is wood that has elevated levels of formaldehyde.
Like the shareholder suit, the consumer suit was filed in U.S. District Court for the Eastern District of Virginia. That court serves the Historic Triangle, including the company’s Toano headquarters. The suit seeks a jury trial on 10 claims connected to the importation of wood products from China. The claims deal with the alleged elevated levels of formaldehyde and how that violates state and federal law and with the Lacey Act, which governs the importation of certain items.
Lumber Liquidators has been under investigation for violating that act after importing wood from China that is alleged to have been harvested in Russia from the habitat of the endangered Siberian tiger. Federal agents searched the company’s Toano headquarters and a retail store in Henrico County in September on the alleged Lacey Act violations. Because laws on the book in Russia criminalize harvesting wood in that habitat, to import such wood is a violation of the Lacey Act.
Three consumers filed the suit on behalf of “all persons and entities in the United States (including its Territories and the District of Columbia) who purchased and installed wood flooring from Lumber Liquidators Holdings, Inc., either directly or through an agent, that was sourced, processed, or manufactured in China,” according to a document filed in the court.
The suit outlines financial damages including installation and removal costs, remediation costs, restocking fees, loss of use, diminished values and other losses. The suit seeks individual damages for each person for whom the suit was filed as well as their attorney fees and interest on payments.
The three consumers named in the suit each purchased wood products from Lumber Liquidators.
According to the document, Florida resident Donnie Williamson purchased Mayflower Birch brand from Lumber Liquidators in December 2012. That wood was installed in his home. At the time of the sale, the wood was represented as being compliant with formaldehyde standards and with the Lacey Act. Williamson relied on the company’s representation of compliance with U.S. laws when he purchased the wood.
Texas resident Melissa Stini purchased Morningstar Bamboo and had it installed in her home in August 2013. Like Williamson, Stini said she wouldn’t have purchased the wood had she known that it wasn’t in compliance with existing laws. Massachusetts resident Jennifer Hogencamp — who purchased Dream Home St. James 12 mm Blacksburg Barn Board wood in February 2011 — echoed Williamson and Stini in the document outlining the suit.
According to the Environmental Protection Agency, formaldehyde is an important component in the production of pressed wood products and other home goods. It is a “colorless, pungent-smelling gas” that has “been shown to cause cancer in animals and may cause cancer in humans” along with a host of other potential health issues, including eye, nose and throat irritation, wheezing and coughing, fatigue, severe allergic reactions and more. Because of that, the federal government imposes limits on the amount of formaldehyde that can be present in wood products.
The suit references an article published in June on the investment website SeekingAlpha.com. The writer of that article claims to have purchased Mayflower hardwood for testing. He said he sent it to Berkeley Analytical and the national Wood Flooring Association for testing, revealing what he said are elevated levels. The suit goes on to list several comments posted online from people who claim to have bought wood from lumber liquidators and claim to have had problems with it, including respiratory issues and more.
When WYDaily published an article about the first class-action lawsuit, Clint Roberts, a spokesperson for the company, said “Lumber Liquidators does not comment on pending or in-progress litigation.”
The company has until late December to answer the complaint filed in district court.
Lumber Liquidators recently issued an outlook for 2013, saying the company expects to achieve $994 million to $1 billion in sales, with 29 to 30 new store locations opening in 2013. The company now employs more than 1,000 people across 46 states.
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