Lumber Liquidators Holdings Inc. flooring, tested by U.S. regulators after an outcry over formaldehyde, was found to have a low risk of causing cancer, though it could potentially trigger irritation and breathing problems.
The U.S. Consumer Product Safety Commission tested the health impact of formaldehyde released into indoor air from Lumber Liquidators’ laminate flooring, according to a report released on Wednesday by the Centers for Disease Control and Prevention. The products -- the subject of a “60 Minutes” investigation last year -- were produced in China between 2012 and 2014.
“Breathing in very high levels of formaldehyde over many years has been linked to rare nose and throat cancers in workers,” the CDC said in the report. “Formaldehyde exposure from the tested laminate flooring would be much lower and would last for less time than the exposures linked to cancer. We estimated the risk of cancer from exposure to this flooring and it’s low.”
The company’s stock rose 2.6 percent to $12.41 after the report was released. It had plummeted more than 70 percent since the March airing of the “60 Minutes” story, which alleged that Lumber Liquidators flooring had potentially dangerous levels of formaldehyde. While the CDC’s findings may help the company, it still faces consumer lawsuits over the issue.
The catalyst for the “60 Minutes” story were short sellers, who had bet that the stock would fall. Investor Whitney Tilson disclosed a short position in the company in 2013 and then pitched a story to the news program. Tilson was featured in the broadcast, along with a lawyer and environmental advocate funded by other short sellers.
The crux of the allegations was that Lumber Liquidators sold laminate flooring with levels of formaldehyde above regulations in California, which has the strictest standards in the country. The piece showed customers ripping floors out of their homes, along with undercover video of managers at Chinese suppliers saying they were labeling flooring as compliant with California regulations when it wasn’t.
After the “60 Minutes” story, the company raised doubts about the testing that the show had used, saying it wasn’t measuring the amount of formaldehyde that may be released in a person’s home. The CPSC used a testing method to replicate “in-home exposure” and then let the CDC analyze the results.
The company said in a statement that it supports the report’s recommendations and will continue working with the commission.
Still, the CDC recommends that people who bought the flooring from 2012 to 2014 should see a doctor if they experience symptoms. The agency also recommended they reduce other sources of formaldehyde like tobacco.