Chinese Drywall Response Team
During the construction boom of 2004-2007 the rising costs and shrinking availability of construction materials, fueled by the active hurricane seasons, led some builders to begin importing drywall, including potentially hazardous drywall manufactured in China. Documentation indicates that close to 540 million pounds of drywall was imported from China during this period, enough to construct 100,000 homes.
The allegedly tainted Chinese drywall contains strontium sulfide, a chemical with a "rotten egg" smell, that may take on corrosive properties when exposed to warm, humid air. Homeowners whose homes were built using this specific type of drywall produced in China are lodging complaints ranging from physical health symptoms, such as nasal irritation and headaches, to the corrosion of metal components, such as copper wiring, air conditioning coils and bathroom fixtures. Holland & Knight clients in the business of homebuilding and drywall manufacturing, as well as drywall brokers and homeowner insurers, are feeling the impact of this emerging situation.
The Impact
Our Chinese Drywall Response Team is familiar with a number of the class action lawsuits that have already been filed on behalf of consumers whose homes contain drywall manufactured in China. The suits seek damages for the cost to remove the problem drywall, repair or replace corroded materials and secure alternative living arrangements during remediation, and in some cases, compensation for personal injuries. One of the biggest challenges is assessing the amount of exposure at any one property since the foreign-manufactured product is often installed concurrently with U.S.-manufactured gypsum product, with neither product displaying clear distinguishable marks once they have been painted. Additionally, a thorough investigation must be conducted to rule out other environmental pollutants as the cause of the health issues or property damage. Our team is focused on all aspects of this issue and has identified specialists in the area of testing and industry professionals who are available to provide expert testimony on this potentially litigious matter.
Those who may risk legal exposure include:
- Drywall supply chain (manufacturers, suppliers and distributors)
- Residential/commercial builders and developers
- General contractors
- Banks & mortgage lenders
- Insurers
- Hospitality companies
Legal Issues
Members of our Chinese Drywall Response Team have long-standing relationships with officials with the Consumer Product Safety Commission, Environmental Protection Agency, Department of Health and Human Services and many state and local governments who have begun to investigate this issue and are mobilizing their resources to finding solutions and providing restitution to consumers. Unlike the recent mold and asbestos litigation, for which much of the construction industry was held liable, there is no definitive test to identify and diagnose the root of the problem. As such, several members of the drywall supply chain are at risk, and the potential legal issues include:
The federal government is likely to take steps to protect consumers by imposing a mandatory recall or a temporary ban on foreign drywall containing potentially hazardous materials. Passage of the pending Drywall Safety Act of 2009 would have a far-reaching impact on the construction industry. Members of our Product Liability, Construction, Real Estate, Insurance and Public Policy Teams play a vital role on our multidisciplinary Chinese Drywall Response Team and are available to help clients quantify risk exposure and design a strategy to minimize their risk and financial loss.