In the wake of the recent 60 Minutes piece that highlighted alleged elevated formaldehyde in the Chinese-made wood flooring imported by Lumber Liquidators, all manufacturers and importers of consumer products containing compressed wood need to ensure that their products comply with the California Air Resources Board (CARB) limits regarding formaldehyde emissions. And while the formaldehyde limits now only apply to products sold in California, those limits are soon to become the law nationwide, as EPA is finalizing regulations (expected by the end of the year) that largely parallel the CARB regulations. The EPA regulations are being promulgated under 2013 amendments to the Toxic Substances Control Act. All consumer goods that contain hardwood plywood (HWPW), particleboard (PB), medium density fiberboard (MDF) are affected.
Reasonable Prudent Precautions
For importers of HWPW, PB and MDF and finished products containing these materials, the Airborne Toxic Control Measures (ATCM) imposes no obligation to test, but importers must take “reasonable prudent precautions” to ensure that the products are compliant, which at a minimum, requires the importer to instruct (in writing) each supplier that the goods it supplies to the importer comply with the applicable emission standards, and obtain written documentation from each supplier that this is so. ATCM § 93120.6(b). In addition to certification from the supplier that all composite wood components are CARB 2 compliant, it would be advisable to require suppliers of products with composite wood components to provide copies of test reports that demonstrate CARB 2 compliance. Since the manufacturer is required to test for CARB 2 compliance, those test reports should be available – if not available, that should at least raise a red flag.
Recordkeeping Requirements
Importers of finished goods containing composite wood components must maintain records showing the date of purchase and the supplier of each shipment of goods containing HWPW, PB or MDF and document the precautions taken to ensure that the composite wood in the finished goods comply with applicable emission standards. These records must be kept in electronic of hard copy form for a minimum of two years and provided to CARB or local air district personnel upon request. ATCM § 93120.6(b).
Statement of Compliance
For each composite wood product or finished good made with composite wood, the importer must state on the bill of lading or invoice that the composite wood products or components comply with the CARB 2 emission standards.
Facility Inspections
Importers may be inspected by CARB or local air district personnel. In the course of an inspection, the importer may be subject to a records audit and product sampling.
Verification Testing
As noted above, there is no requirement that importers conduct independent testing of composite wood components of finished goods. Nonetheless, an importer of composite wood products or finished goods with composite wood components is still at risk for penalties even if it takes the “reasonable prudent precautions” described above. Those reasonable prudent precautions may serve to mitigate penalties levied by CARB, but penalties could still be levied if CARB were to determine that the composite wood is not compliant despite the certification and test reports provided by the supplier. As a result, it may help to further mitigate potential liability to conduct some independent testing to confirm compliance.
In addition to the potential liability Lumber Liquidators is facing regarding alleged CARB emissions noncompliance, the Justice Department recently announced that it is investigating whether the Company violated the Lacey Act by importing endangered species of wood and the U.S. Consumer Product Safety Commission (CPSC) is investigating whether the Company’s products run afoul of CPSC regulations.
If you are a manufacturer or importer of consumer products that contain wood, it is important that you understand the laws and regulations that affect your products. In the wake of the investigations surrounding Lumber Liquidators, your products are in the regulatory spotlight.
Elliot Belilos represents companies in the areas of product safety and compliance. You can reach him at ebelilos@ofwlaw.com.
