TOANO, Va. - Hardwood flooring giant Lumber Liquidators agreed to a $22 million cash settlement of a class action suit by plaintiffs in the Formaldehyde MDL (MDL 2627) case.
Under the terms of the settlement, Lumber Liquidators will contribute $22 million in cash and provide $14 million in-store-credit vouchers for a total of $36 million to settle all claims brought on behalf of purchasers of the Chinese-manufactured laminate flooring it sold between January 1, 2009 and May 31, 2015.
"We are pleased to have entered into this MOU, and welcome it as an important step toward resolving this legacy issue and moving forward," said Dennis Knowles, Chief Executive Officer of Lumber Liquidators.
The plaintiffs are largely homeowners who began ripping out their floors after CBS News 60 Minutes program did an expose on the flooring. Reporters interviewed managers of factories in China who were producing laminate flooring with glues containing formaldehyde, then packaging it boxes labeled as CARB compliant - erroneously indicating it met California Air Resource Board requirements for minimal formaldehyde contents.
The scandal brought down the CEO and other executives at Lumber Liquidators, and its stock price and sales and share prices fell precipitously.
Attorneys representing the plaintiffs were led by Cohen, Milstein, Sellers & Toll Hagens Berman Sobol Shapiro, LLP; Cotchett, Pitre & McCarthy, LLP; and a proposed class of plaintiffs in the Durability MDL (MDL 2743) led by Robertson & Associates, LLP and Whitfield, Bryson & Mason LLP, today announced the entry into a Memorandum of Understanding to settle all litigation related to the Chinese-manufactured laminate flooring previously sold by Lumber Liquidators pending in the two Multi-District Litigations in the Eastern District of Virginia.
The deal is subject to the execution of a definitive settlement agreement, court approvals, and approval by the plaintiffs' co-lead counsel in the two cases and Lumber Liquidators' board among other contingencies. Lumber Liquidators will not have to admit to any fault or liability.
"The parties have agreed to settle these matters to avoid the expense and uncertainty of continuing the litigation," the legal team said in a press release posted at Lumber Liquidators' website. "Out of an abundance of caution, the Company discontinued the sale of the relevant product in May 2015."
All Plaintiffs' Counsel are pleased with this settlement that they believe will return real value to the class members.
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