A class action lawsuit launched by homeowners with Retrofoam insulation has moved one step closer to a court date, after a federal objection was withdrawn.

Health Canada ordered Retrofoam of Canada Inc. to stop selling the product in February 2009, because the urea formaldehyde foam insulation (UFFI) had been prohibited in the country in 1980 under the Hazardous Products Act.

But by that time the insulation, which homeowners thought was approved by the federal government, had been installed in hundreds of homes.

Homeowner Jerry Doyle says "We believed there was a degree of security there because this came from a licenced energy auditor, so that's one reason we went ahead with the foam."

Doyle's home is one of nearly 900 in Ontario with the insulation. A class action lawsuit launched on behalf of all the homeowners is seeking $500 million in compensation.

The suit claims the federal government was negligent in allowing the product to be installed.

While the Attorney General of Canada initially tried to block the class action suit as it relates to the federal government, the objection was withdrawn on Thursday.

The company is also named in the lawsuit, but in a 2009 interview, the owner of the company claimed the product posed no danger.

Retrofoam President Paul Weigel said "All of the free volatiles are burned off in a factory environment and in fact are removed from the product before it is installed in homes."

While Doyle says his health hasn't suffered, the situation continues to be a stressor.

"Do we finish the renovations on the house? Are we going to list it someday and sell it? How's it going to affect the value of the house? So all of that's added up," he says.

The stress will continue as the court case could take years to resolve.

For more information on UFFI please visit: http://www.cmhc-schl.gc.ca/en/co/maho/yohoyohe/inaiqu/inaiqu_008.cfm