Formaldehyde in Construction Materials Spurs Products Liability Litigation

Among the ever-growing list of toxins and contaminants that can form the basis of a products liability claim, formaldehyde has shown signs of potential for litigation in recent years. Formaldehyde, a known carcinogen, can be found in a variety of household products and construction materials. While exposure to low levels of formaldehyde is considered safe, exposure at a higher level poses a number of health issues. Formaldehyde in construction and building materials presents a unique concern, as it can create constant risk of exposure within the home, especially if the materials contain a high level of the chemical. In 2015, Lumber Liquidators, a flooring retailer, faced a number of class actions after an investigation found that their laminate flooring contained extremely high levels of formaldehyde. The company eventually settled two years later and agreed to pay consumers $36 million. While cases of high levels of formaldehyde in construction materials have not been frequently litigated, the Lumber Liquidators settlement may change the trajectory for potential future cases.

Formaldehyde Exposure and Federal Regulations

What exactly is formaldehyde and how can exposure form the basis of a products liability lawsuit? Formaldehyde is a colorless, flammable chemical that is used in building materials such as insulation and composite wood products. It can be found in glues, paints, lacquers, paper products, fertilizers, and pesticides. It is also used as a preservative in some medicines and cosmetic products. Because it is a byproduct of combustion, it is also found in emissions from fuel-burning appliances as well as cigarette smoke. In light of its ubiquity, there are a number of opportunities for formaldehyde exposure in the home. The primary way one can be exposed is by inhaling air containing off-gassed formaldehyde. Children, the elderly, and individuals with pre-existing breathing conditions, such as asthma and bronchitis, are particularly sensitive to formaldehyde exposure. Formaldehyde can cause irritation to the skin, eyes, nose, and throat, with high exposure found to cause cancer. Exposure can also cause adverse respiratory, metabolic, immunologic, and gastrointestinal effects.

In 2011, the Department of Health and Human Services confirmed that formaldehyde is a known carcinogen. In addition, a number of federal agencies have gone public with recommendations concerning exposure, particularly in building materials. The Occupational Health and Safety Administration (OSHA) established a regulation that limits workers’ exposure to an average of 0.75 ppm (parts per million) of formaldehyde over the course of an 8-hour workday. The Department of Housing and Urban Development has also set standards for manufactured housing and the amount of formaldehyde that can be present in plywood and particle board.

The Formaldehyde Emission Standards for Composite Wood Products Act of 2010 established formaldehyde emission standards in composite wood products. In 2016, the Environmental Protection Agency finalized the rules for implementing and enforcing the provisions to reduce the number of formaldehyde emissions in composite wood products domestically produced and imported into the United States. Mandatory compliance with labeling standards began on June 1, 2018, with additional requirements scheduled for implementation beginning on March 22, 2019. These recently published formaldehyde regulations may likely cause an increase in potential litigation concerning chemical exposure.

Lumber Liquidators Products Liability Litigation

The discount flooring chain, Lumber Liquidators, has been one of the first manufacturers to be held accountable for extreme levels of formaldehyde contamination in its products. In a 2015 report that aired on 60 Minutes, independent laboratory tests performed on flooring samples found that the company’s laminate flooring contained alarming levels of formaldehyde. In one set of tests, the levels of formaldehyde were higher than the lab’s equipment could measure, leading to the assumption that the equipment was broken. Some flooring samples contained twenty times more than California’s legal limit of formaldehyde in building materials.

Almost immediately after the 60 Minutes exposé, lawyers and environmental activists began to investigate the matter on behalf of homeowners and construction workers. The first complaint, filed in the U.S. District Court in California, alleged that Lumber Liquidators violated federal and state laws by selling products that contained formaldehyde levels “known to pose serious health risks” and in excess of California’s legal limits. The complaint further alleged that testing indicated the laminate flooring Lumber Liquidators sourced from its suppliers in China contained more formaldehyde than its domestically sourced products, despite its labeling that the company’s products manufactured in China complied with California’s emission standards. A number of other similar class actions were subsequently filed against the company, which were eventually centralized by the United States Judicial Panel on Multidistrict Litigation and transferred to the Eastern District of Virginia, the state in which Lumber Liquidators is based.

In October 2017, Lumber Liquidators announced it had reached an agreement. Under the settlement, the company agreed to pay $22 million in cash and $14 million in store credit to customers who purchased laminate flooring between January 1, 2009 and May 31, 2015. As part of the memorandum of understanding, the company did not admit any wrongdoing or liability.

The class actions also prompted a federal investigation by the Consumer Product Safety Commission, which found that Lumber Liquidators imported flooring that used illegally harvested wood from protected forests. In October 2015, the company pled guilty to violating the Lacey Act, a law that bans the sale of illegally harvested animal and plant products. Lumber Liquidators was ordered to pay $10 million, some of which was paid to a wildlife charity.

How Can the Experts Weigh in?

While the scientific community is in general agreement that exposure to formaldehyde can cause cancer, the specifics as to the extent and type of cancer are still up for debate. As such, the experts used during a formaldehyde exposure case can vary according to the type of cancer and area of the body affected. The level of exposure is another important factor in establishing a causal link. Toxicology experts can be used throughout litigation to determine the amount and frequency of exposure and how, if at all, they affected the plaintiffs.

Experts versed in environmental federal regulations will undoubtedly be an asset, especially in light of the new EPA regulations and the emissions standards set forth in the Formaldehyde Emission Standards for Composite Wood Products Act of 2010.

Overall, as research concerning formaldehyde advances and more regulations are enforced, it is likely that potential products liability claims will also develop.