In a letter sent to regulators on Wednesday, Senator Bill Nelson (D-Florida) has asked the heads of the Consumer Product Safety Commission (CPSC), the Centers for Disease Control and Prevention (CDC) and the Federal Trade Commission (FTC) to test the company's flooring highlighted during a report on "60 Minutes" on Sunday night.
Following news of this letter, shares of the company were down as much as 10% in afternoon trade on Wednesday.
On Tuesday, shares of the company rallied after one analyst upgraded the stock, saying that negative news surrounding the "60 Minutes" report would likely blow over.
The flooring retailer has been under fire this week after a report aired on "60 Minutes" on Sunday night that showed apparent health and safety violations at some of its factories in China.
Nelson is a ranking member of the Senate Committee on Commerce, Science, and Transportation.
In his letter, Nelson writes:
In past Congresses, the Senate Committee on Commerce, Science and Transportation has held numerous hearings on defective drywall imported from China. Unfortunately, the laminate flooring sold by Lumber Liquidators bears resemblance to that defective product, which was widely installed in Florida homes, caused metal corrosion, and negatively impacted public health. Furthermore, the drywall debacle also showed that Chinese manufacturers often refuse to stand behind their products - even when they cause great harm to American consumers. We must not repeat the Chinese drywall experience.
Accordingly, I ask that your agencies independently investigate and test these specific Chinese wood laminate products to determine if they present a risk to the public under the Consumer Product Safety Commission's (CPSC) authority under the Federal Hazardous Substances Act or the limits prescribed by Congress in the Formaldehyde Standards for Composite Wood Products Act. In so doing, we request that the CPSC, in collaboration with the Centers for Disease Control's Agency for Toxic Substances and Disease Registry and the EPA, replicate the cooperative, inter-agency initiative that tested defective Chinese drywall.
In a statement following the "60 Minutes" report, Lumber Liquidators said the testing methods used by the newsmagazine were improper.
Here's Nelson's full letter.