The insulation company RetroFoam is facing a possible $500-million class action suit that alleges the insulation the company sold contained formaldehyde, a banned substance in Canada. Reportedly, RetroFoam knew the insulation contained formaldehyde, but sold it anyway, to hundreds of Canadian homeowners. So far, 140 people have registered for the suit against the Ontario based company.
The attorney general of Canada is also named in the suit, representing the natural resources minister. This is because the department of natural resources runs a program called ecoEnergy Retrofit, which was allegedly recommending RetroFoam to homeowners.
The ecoEnergy Retrofit program enables homeowners to have their houses inspected for energy efficiency by licensed inspectors certified by the department of natural resources. Depending on the results of the inspection, homeowners may qualify for federal rebates for upgrades which include insulation.
Reportedly, the licensed inspectors were recommending RetroFoam. About 700 homes in the Windsor and Cornwall areas have had the RetroFoam insulation installed through the ecoEnergy Retrofit program. But on February 3, 2009, Health Canada ordered RetroFit to stop selling the insulation. This has resulted in a loss or property value to the homeowners. Consequently, the focus of the class action is the loss of property value resulting from having the banned insulation installed.