Times Ledger: Senator Avella calls on DEC for probe into Lumber Liquidators

State Sen. Tony Avella (D-Bayside) called on the New York State Department of Environmental Conservation last week to launch an investigation into levels of formaldehyde found in some Chinese-made laminate flooring sold by Lumber Liquidators.

Avella, who is the vice chairman of the Senate Environmental Conservation Committee, wants the DEC to launch its own investigation into the product. If CBS’ assertions are verified, he is asking that the products be recalled.The senator issued his concerns to DEC Commissioner Joseph Martens following a March 1 segment by the CBS television program “60 Minutes,” which reported very high levels of the chemical in some laminate flooring.

“I also ask that you take necessary action against Lumber Liquidators if it has violated any application regulations or laws against the sale of this product,” Avella said in a letter to Martens.

Reporting the results from testing laminate samples, CBS claimed that Lumber Liquidators Holding Corporation had violated California state emissions regulations. The company has since publicly defended its products, and asked that CBS share its methodology.

Formaldehyde is also found in several other chemicals, particle board, household products, glues, permanent press fabrics, paper product coatings, fiberboard and plywoods. The chemical becomes airborne when products containing it are installed and is almost always present indoors and out at levels less than 0.03 parts per million.

Indoor airborne concentrations of formaldehyde above 0.1 parts per million have been linked to health concerns by the Environmental Protection Agency. Anything above that level can cause irritation of the respiratory system. Long-term exposure to the chemical has been linked to nasal and lung cancer, according to the EPA. The agency has also found the installation of some pressed laminate flooring to produce formaldehyde emissions of up to 0.3 parts per million.

Despite other ongoing investigations into Lumber Liquidators flooring, Avella said it is still important that the DEC look into the matter to determine whether or not New York standards are being met.

“The levels of formaldehyde far exceed what the requirements are in California and it’s also my understanding that the EPA … has adopted California regulations for the entire country, but they don’t go into effect until May,” he said. “In the meantime, who knows how many families with children have had this flooring installed in their homes here in New York state.”

Investors in the lumber and flooring wholesaler dumped stock in the week before the CBS report and up until Wednesday this week. The company warned investors Feb. 24 of the upcoming television report, when the stock was being traded for over $68. The stock was trading for less than $30 a share at its lowest point, but hedge fund executives started discrediting CBS’ methodology this week and investors started to pick shares back up by Wednesday.

CBS tested the laminate samples by taking the product apart and testing each individual piece for the chemical resin, which is not mandated by California’s standards. The law requires that products be tested by sampling a piece of the core before the product is fully assembled. Lumber Liquidators said this week during a meeting on product safety that the toxin levels they tested using this method were much lower.

Skepticism remains on both sides of the issue.

If further investigation reveals unsafe levels of fomaldehyde in the company’s flooring, Avella said, “we may have to start seizing the assets of Lumber Liquidators, because their stock has gone down by half since this has come down.”

“I think the reports are very serious and if anyone’s invested in this company, you have to question whether or not the company is viable from here because this is such a serious issue,” the senator continued.

Two Wall Street firms publicly said last week that the sell-off blew the publicity out of proportion. Janney Capital Markets and Goldman Sachs have investment banking relationships with Lumber Liquidators and contended that even if non-compliant with U.S. or state regulations, the flooring would not cause severe health issues.

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