Chinese Drywall Mess Has No Easy FixOct 8, 2009 | Parker Waichman LLP
Thousands of homeowners across the country are blaming fumes from defective Chinese drywall for making them sick. According to a report in The New York Times, the Chinese drywall debacle has pushed many people out of their homes and to the brink of bankruptcy, but solutions to the problem have not been easy to find.
This blog has been reporting on the Chinese drywall issue for months. According to the Consumer Products Safety Commission (CPSC), it has received about 1,501 reports from residents in 27 states, the District of Columbia, and Puerto Rico who believe their health symptoms or the corrosion of metal components in their homes are related to the presence of Chinese drywall. Chinese drywall poured into the U.S. between 1999 and 2007 because of the high demand created by the housing boom. Imports accelerated when the rebuilding that followed Hurricane Charley in Florida in 2004, and Hurricane Katrina along the Gulf Coast in 2005, created a drywall shortage. According to The Wall Street Journal, some 500 million pounds of Chinese drywall was imported to the U.S. during the housing boom. That means as many as 100,000 homes throughout the country could have been built with the material.
According to The New York Times, the cost to remediate a home with Chinese drywall hovers somewhere around $100,000 -$150,000. Most homeowners simply don't have that. Insurance companies won't pay for a fix, citing pollution exclusions in their policies. Even worse, according to a report in the Miami Herald, some insurance companies are refusing to renew policies on homes with Chinese drywall unless the problems are fixed.
The mess has led many homeowners to file lawsuits against the manufacturers of Chinese drywall. According to the Times, insurers, home builders and drywall suppliers have also filed lawsuits, and in some cases are suing each other. So far, about 300 Chinese drywall cases have been consolidated in a Multidistrict Litigation that is currently underway in Federal Court in New Orleans. The first bellwether trials are expected to start early next year.
Holding Chinese manufacturers accountable could prove difficult. According to the Times, only one - Knauf Plasterboard Tianjin- has come to the U.S. to address the problem. Some manufacturers have been difficult to find, and others simply ignore lawsuits. What's more, should plaintiffs win, there is no way of enforcing U.S. legal judgments against foreign firms.
According to the Times, the CPSC says its Chinese drywall investigation is the largest in its history. It has sent six investigators to Chinese gypsum mines and to meet with the government there, and China has sent investigators to the U.S. It is expected that sometime this month, the CPSC will release the results of a study to determine why the drywall is causing problems, and what kind of remediation programs might be effective, the Times said.