Tuesday, March 3, 2015

"GCM Announces New Testing Results of Lumber Liquidators Chinese‐made Laminates; All Chinese‐made Laminates Purchased for Testing Failed CARB Standards" (2015-03-02)

CONSUMERS CONTACT:  Linda Dardarian, 800‐538‐1467

Why These Tests Matter -
As noted in the 60 Minutes report, which aired on March 1, 2015, probably tens of thousands of households in California and probably hundreds of thousands of households nationwide are being exposed to formaldehyde emissions from Lumber Liquidators Chinese‐made laminate flooring. According to its website, the California Air Resources Board (CARB) "evaluated formaldehyde exposure in California and found that one of the major sources of exposure is from inhalation of formaldehyde emitted from composite wood products containing urea‐formaldehyde resins. The International Agency for Research on Cancer (IARC) reclassified formaldehyde from "probably carcinogenic to humans" to "carcinogenic to humans" in 2004, based on the increased risk of nasopharyngeal cancer. Formaldehyde was also designated as a toxic air contaminant (TAC) in California in 1992 with no safe level of exposure. State law requires [C]ARB to take action to reduce human exposure to all TACs" [http://www.arb.ca.gov/toxics/compwood/compwood.htm].
Lumber Liquidators (LL) has stated that it had "over 620,000 customer transactions" in 2014 alone. LL also states that Laminate, Bamboo, Cork, and Vinyl Plank together accounted for 38% of net sales in 2014. In previous years, LL also disclosed that laminates were 22%, 23%, and 21% of net sales in 2012, 2011, and 2010, respectively (Source: Lumber Liquidators Holdings, Inc. SEC filings)

The Standards -
CARB's emissions standards regulate the formaldehyde emissions from "composite wood products"such as particleboard, plywood, and medium density fiberboard (MDF). These composite wood products are used in finished goods such as laminate flooring, furniture, or shelving. The underlying particleboard, plywood, or MDF is sometimes referred to as the "core" of the finished good. CARB's emission standards make it unlawful to sell products, including laminate wood flooring, in California that contain composite wood cores that exceed certain formaldehyde levels set by CARB.

The Test Method & Results -
The tests analyzed Lumber Liquidators laminate flooring purchased in California both in stores and online - the same flooring that consumers would purchase. Lumber Liquidators states that this laminate flooring complies with the CARB Phase 2 Formaldehyde standard. Three different laboratories conducted extensive testing on this flooring - these labs performed over 80 "deconstruction tests" (of which 76 were on Chinese‐made laminates) using the CARB‐approved finished goods methodology and over 200 other formaldehyde tests.
Every single U.S.‐made Lumber Liquidators laminate product purchased for testing passed the CARB standard. Every single Chinese‐made Lumber Liquidators laminate product purchased for testing failed the CARB standard - and by a large average margin. The average formaldehyde emissions of the Chinese‐made products tested was over 6x the CARB legal limit for the MDF core.

Average Formaldehyde Emissions in Tested Lumber Liquidators' Chinese‐Made and US‐Made
Laminate Flooring Purchased by Plaintiffs for Testing.
China: 76 Tests / USA: 5 Tests.
CARB Phase II Limit: MDF 0.11 ppm

All Three Laboratories Used the CARB‐Approved Test Method -
Each of the testing laboratories used the finished goods sample preparation method and test method developed by CARB and published on CARB's website. This is the official CARB test method. CARB has only one published test method for testing for formaldehyde in finished products containing composite wood cores, and that is the test method the independent laboratories used.  
The purpose of the deconstruction is to expose the composite wood core so that its emissions can be compared against CARB's numeric limit. CARB has published a "Standard Operating Procedure" for finished goods testing. This SOP can be found in the "Test Methods" section of CARB's website [http://www.arb.ca.gov/toxics/compwood/outreach/testmethods.htm].
According to this SOP, this procedure "is to be used to prepare a finished good for laboratory testing to determine if the finished good complies with" CARB standards [http://www.arb.ca.gov/toxics/compwood/outreach/compwood_sop_fg_decon_091313.pdf]. Senior CARB  personnel have confirmed that the SOP is the official CARB methodology for analyzing formaldehyde emissions from finished goods.  
Lumber Liquidators has criticized the CARB test method, but that industry argument has long since been rejected by CARB. CARB's official legislative history from 2007 states (Agency Response, 24‐Landry‐070423‐CWIC [http://www.arb.ca.gov/regact/2007/compwood07/fsorcompwood07.pdf]) [begin excerpt]: Yes it is correct that finished products must be deconstructed to test for compliance. But, we disagree that there is great uncertainty in the enforcement program. Deconstructive testing is needed for finished goods to verify compliance with the emission standards. We are currently developing the sample preparation and testing protocols that we will use to enforce the ATCM (see page 127 of the ISOR). The sample preparation and emission testing protocol we use to  enforce the ATCM will be technically sound and will be more than adequate to identify non‐compliant composite wood products found in finished goods for California. [end excerpt]
Although Lumber Liquidators says it has done testing, it does not say that it has performed   deconstructive testing. The company also posted a chart of "Fiberboard Core Testing" on its website. If these tests were performed by "Third Party Certifiers" (TPCs) in China, it would only indicate that the core manufacturer is capable of producing CARB‐compliant cores - not that the cores used in Lumber Liquidators' products are actually CARB compliant. As noted by 60 Minutes, "[e]mployees at the mills openly admitted that they use core boards with higher levels of formaldehyde to make Lumber Liquidators laminates, they also admitted falsely labeling the company's laminate flooring as CARB2". In addition, TPCs sometimes conduct testing on pre‐scheduled dates (rather like announcing the location of highway "speed traps.")
CARB defines a Third Party Certifier as "an organization or entity approved by the Executive Officer that verifies the accuracy of the emission test procedures and facilities used by manufacturers to conduct formaldehyde emission tests, monitors manufacturer quality assurance programs, and provides independent audits and inspections" [http://www.arb.ca.gov/toxics/compwood/certifiers.htm].
Therefore, TPC tests do not, and cannot, prove that all of Lumber Liquidators' Chinese‐made products sold in the United States comply with CARB standards. Lumber Liquidators has acknowledged as much in a public court filing: "A [third‐party certification] is obtained from an approved, third‐party testing lab that tests samples of products - not every product - for formaldehyde levels. Thus, LL's statement that it obtains [third‐party certifications] from its suppliers (mills) is in no way a representation that every single product meets CARB's standards." See Donnie Williamson, et al., v Lumber Liquidators, Inc. Case #1:14‐00035‐GBL‐TCB. "Memorandum in Support of Defendant Lumber Liquidators, Inc.'s Motion to Dismiss Under Rules 12(b)(1) and 12(b)(6)."

Update, 2015-03-12:
Lumber Liquidators Admits CARB Tests Resulted in a Preliminary Agency Finding That Some Products Exceed Formaldehyde Limits -
Today, Lumber Liquidators acknowledged that the California Air Resources Board (CARB) has tested Lumber Liquidators’ products and preliminary results show that some of the products exceed the CARB formaldehyde standard.  The admission was made by the company’s CEO, Robert Lynch during a conference call.  Lumber Liquidators also announced, for the first time, that it is offering free formaldehyde tests and potentially the replacement of floors which may be found to exceed acceptable levels of formaldehyde.
The transcript from today’s briefing states:  “CARB has ‘deconstructed’ our products in routine inspections, as well as we believe others in the industry, in order to try to determine if the core materials complied. In CARB's preliminary findings, some of our samples they deconstructed and tested (due to the variability of the test) exceeded the limits for raw cores.”
“CARB testing is the standard to which Lumber Liquidators’ laminate products must be held,” said Denny Larson, Executive Director of GCM.  “They admitted today that CARB has made a preliminary finding that some of their products have failed to pass the formaldehyde test conducted by CARB.  Lumber Liquidators must go farther to make sure that all of their laminate products comply with the standard and provide increased protection for the consumers.”  GCM has asked Lumber Liquidators to disclose which products failed the CARB testing and by how much above the CARB formaldehyde standard.  Lumber Liquidators’ laminate products have now failed to pass the CARB formaldehyde test conducted dozens of times by 60 Minutes, at least three independent laboratories, and apparently by CARB itself.  While Lumber Liquidators continues to dispute the test method, the test method has been adopted, published and applied by CARB itself.

About the authors:
Global Community Monitor is a nonprofit environmental health and justice organization empowering   communities to prevent their exposure to toxic chemicals and promote healthy outcomes for all. Global Community Monitor is joined in the Proposition 65 lawsuit by Sunshine Park, a firm affiliated with private investment companies that have substantial short financial exposure to Lumber Liquidators. Sunshine  Park and its affiliates have financed extensive testing and have conducted substantial on‐the‐ground investigation regarding Chinese‐made laminate flooring production.

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