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Lumber Liquidators said a California court ruled in its favor against claims that it did not warn consumers about cancer-causing formaldehyde in some of its flooring products.
The company's shares rose about 7 percent to $17.45 in after-hours trading on Tuesday.
Lumber Liquidators said a Superior Court of the State of California ruled that Global Community Monitor and Sunshine Park's evidence failed to support their claims and asked them to pay $100,000 as reimbursement.
Global Community Monitor and Sunshine Park had in 2014 filed a lawsuit claiming that Lumber Liquidators failed to provide a formaldehyde warning to California consumers.
The court in April had ruled tentatively in favor of Lumber Liquidators in a civil case that had accused the hardwood floor retailer of violating a California state law.
Lumber Liquidators has been under pressure since March last year, when CBS's "60 Minutes" report alleged that the company's laminate products sourced from China contained toxic levels of formaldehyde.
The company agreed not to sell its existing inventory of laminate flooring previously sourced from China, the U.S. Consumer Products Safety Commission said in June.