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Drywall problems leave many in lurch
- Type "Headline News":
Displaced once by hurricane Katrina, and again by Chinese drywall, homeowner faces $150,000 repairs that builder says aren't covered by warranty.
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The problems with Darryl Ledet’s new house in Prairieville started just a few months after he moved in. The bathroom mirrors grew foggy, and it became hard to make out a reflection. Not long afterward, he says, the central air unit’s evaporator coils failed.
Then, according to Ledet, his wife and 4-year-old daughter began having upper respiratory problems and unexplained nosebleeds.
His builder, Sunrise Homes, replaced the mirrors and repaired the air conditioner, but the problems soon reappeared.
Eventually the builder figured out that the house was built with “Chinese drywall,” Ledet said.
Sunrise Homes notified Ledet of the findings in April. In June, the company sent a letter saying it was not responsible for further repairs because, under Louisiana law, product defects are covered under a one-year warranty. Ledet’s warranty had expired.
Meanwhile, a contractor told Ledet it would cost about $150,000 to fix all of the problems, including pulling out the drywall and replacing the corroded electrical wiring.
The new home was supposed to solve Ledet’s housing problems — he and his family fled Terrytown in Jefferson Parish after Hurricane Katrina badly damaged their home in 2005. Now he’s displaced again.
“I’m living with my in-laws because I can’t afford to pay the mortgage and pay rent to live somewhere else,” Ledet said.
It’s unclear how many Louisiana homeowners have been affected by the drywall problems.
The state Department of Health and Hospital’s Indoor Air Quality Hotline has fielded 675 inquiries since Feb. 20, spokeswoman Jolie Adams said. Roughly 400 of the callers have agreed to participate in an informal health survey.
Between Feb. 20 and May 20, DHH surveyed 305 households, agency records show. Orleans, Jefferson, St. Tammany and St. Bernard parishes accounted for 85 percent of the complaints in the survey. Five of the participants live in East Baton Rouge Parish.
Meanwhile, hundreds of residents in Florida and other states, whose homes were built or repaired with the controversial drywall, have sued builders, suppliers and manufacturers. The class-action lawsuits will be heard by a federal judge in New Orleans.
Sunrise Homes operations director Natalie Culpeper said the builder has sued Interior/Exterior Supply Co., the firm that supplied the drywall used in Ledet’s house. Culpeper said she could not comment further because of the lawsuit.
Sunrise’s letter to Ledet says the issue remains complex and may be resolved through the courts.
Salvadore Christina Jr., an attorney for Becnel Law Firm in Reserve, said the problems with the drywall are just coming to light in Louisiana.
Most appear to be in the New Orleans area and on the north shore of Lake Pontchartrain, Christina said. The Becnel firm represents about 100 people. Only a handful, including Ledet, are from the Baton Rouge area.
Most of the problem drywall was imported in 2006 during a supply shortage created by the national housing boom and hurricane repairs.
Builder E. Jacob Fakouri said his firm used the drywall in one house, as far as he knows. At the time, he said, everyone was happy just to get the material.
“As a builder, it comes in, it looks like Sheetrock, it smells like Sheetrock, it tastes like Sheetrock. It must be Sheetrock,” Fakouri said. “You hang it up, you go along.”
Three years later, there’s a problem with it, he said.
“Well, how the heck was I supposed to know this?” Fakouri said. “I didn’t buy it from a flea market or off the side of the road. I bought it from a reputable supplier.”
Jeanette Mills, who owns the Fakouri built house in question, said she started having problems with her air conditioning in the first year after the house was built. So far she has gone through four evaporator coils.
The local air-conditioning company, the unit’s maker and Fakouri met last year to try to figure out the problem, Mills said. The air-conditioning firm, Montgomery Heating & Air Conditioning Inc., ended up replacing the unit.
Mills said the drywall manufacturer eventually notified her that Chinese drywall had been installed in her home. Fakouri contends the defective materials are not his problem.
Mills said she has not filed a lawsuit but must take some action to fix her house.
However, state Sen. Julie Quinn said Louisiana consumers, unlike those in Mississippi and Florida, face an uphill legal battle.
Changes Louisiana made to its liability laws in the 1990s mean that companies are responsible only for their share of damages from defective products, said Quinn, a Metairie Republican. In addition, a company is only liable for damages if it knew the product was defective, she said.
For example, a manufacturer might be responsible for 75 percent of the damages, the supplier 10 percent and a contractor 15 percent, Quinn said.
Under the previous law, a consumer could sue one defendant and, if successful, collect 100 percent of the damages from that one company, she said. It would be up to the first defendant to get the other defendants to pay their share.
“Now we’ve forced Louisiana consumers to sue China and collect from China, which is impossible,” Quinn said.
Quinn said that even if the consumers sued in international court and won, they would have no way to make Chinese companies pay the damages.
The manufacturers named in the lawsuits include Knauf Gips, a German company, and its Chinese affiliates, Beijing New Building Material plc and Pingyi Zhongxing Paper-Faced Plasterboard.
Quinn authored a bill during the 2009 legislative session that specifically targeted liability involving Chinese drywall. She said the measure drew little support.
Dow Chemical Co. and the Louisiana Association of Business and Industry, a pro-business group, argued the bill was designed to enrich plaintiffs attorneys.
Ginger Sawyer, LABI’s vice president for political action, said Quinn’s bill had several problems, not the least of which was undoing years of legal reforms. Sawyer noted that consumers have already filed lots of federal lawsuits.
“It’s not like these people are being left out in the cold,” Sawyer said.
In addition, consolidating all of the cases from Gulf Coast states, Puerto Rico and elsewhere puts much greater pressure on the Chinese government to settle, Sawyer said.
The bill would have allowed consumers to sue nonprofit organizations, such as Habitat for Humanity, that built or repaired hurricane-damaged homes, along with contractors, builders and others in the construction industry, Sawyer said.
Quinn said she plans to offer the bill again during the next legislative session.
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Health agencies search for tie between tainted Chinese drywall and homeowners' health problems
Sulfur gases from the material have been blamed for corroding metals in homes - from air-conditioning coils to picture frames to antique silver.
But some homeowners and renters also have complained of multiple health problems: headaches, nosebleeds, tightness of the chest, trouble breathing, congestion, eye irritation.
On June 3, the federal Agency for Toxic Substances & Disease Registry, an arm of the Centers for Disease Control and Prevention, released a guide for doctors and others dealing with questions about the tainted drywall.
The agency said that very few studies exist of people exposed to low levels of sulfur gases for long periods of time.
However, the agency also said that short-term exposure to sulfur gases such as carbonyl sulfide and carbon disulfide, both of which have been found in Chinese drywall, can cause eye irritation, sore throat, stuffy nose, cough, shortness of breath, chest pain, nausea and headaches - symptoms that can be caused by multiple other factors, but which resemble the complaints voiced by residents.
Longer exposures can result in fatigue, loss of appetite, irritability, poor memory, insomnia and dizziness, according to the agency. Older people, children and those with asthma or chronic obstructive pulmonary disease are more likely to feel the effects of sulfur gases, the ATSDR said.
Further, the state health department's testing found low levels of hydrogen sulfide seeping from the drywall, which, according to Dr. Kaye Kilburn, a leading expert on low-level hydrogen sulfide exposure, can combine with moisture and oxygen in lungs to become sulfuric acid. It's basically the same chemical process as the formation of acid rain.
And, Kilburn pointed out, even though only small levels of hydrogen sulfide, carbonyl sulfide and carbon disulfide may be present in a home, together they add up to a potentially higher level of risk.
Full article: http://www.palmbeachpost.com/localnews/content/local_news/epaper/2009/06...
Chinese makers of shoddy goods rarely face U.S. sanctions
Chinese makers of shoddy goods rarely face U.S. sanctions
By Frank Greve and Grace Chung
Chinese manufacturers made more than half of the goods that the U.S. Consumer Product Safety Commission recalled last year, but few of them paid any price for producing defective wares.
The long list of faulty products included Chinese-made highchairs whose seat backs failed, steam cleaners that burned their users, bikes whose front-wheel forks broke, saunas that overheated, illuminated exit signs that stopped working when commercial power failed, dune buggies whose seat belts broke on impact and coffee makers that overheated and started fires.
It also included loosely knotted soccer goal nets that entrapped and strangled a child and a toy chest whose poorly supported lid fell on a toddler's neck and killed him, according to CPSC filings.
The difficulty in recovering damages is a lesson that U.S. homeowners who are stuck with defective and possibly toxic Chinese drywall are likely to learn in the coming months. Builders installed the drywall in 2004-5 when the home building boom outstripped U.S. drywall supplies. The CPSC and the Environmental Protection Agency are investigating the consequences.
While everyone involved is likely to be sued — installers, contractors, distributors, importers and Chinese manufacturers — the last are the hardest to reach by far.
For starters, suing a Chinese company in a Chinese court isn't a good idea for most American plaintiffs, said Michael Lyle, a seasoned international lawyer. "It's like suing Michael Jordan in Chicago."
Yet many Chinese manufacturers also evade trial in the U.S. simply by persuading judges that their companies had no substantial business presence in the states in which they've been sued. That's not hard for Chinese manufacturers, which typically rely on independent importers to sell to the American market.
A Senate Judiciary subcommittee is considering measures to make that defense — which has been invoked in scores of product liability suits — more difficult. For now, however, it's so effective that many U.S. tort lawyers won't take cases against Chinese products unless there are American co-defendants. Further, if the U.S. defendants are forced to pay up, the likelihood of their successfully suing the Chinese manufacturers is as distant as the customers'.
Lyle — the managing partner of the Washington office of the New York firm Weil, Gotshal & Manges — and other international lawyers say the larger problem is that the growth of globalized trade has outrun the legal systems that were created to check its excesses.
"It's in the nature of economic development that systems of remedy develop out of the need to fix what's gone wrong, so they develop more slowly," said Charles Toy, the manager of a Washington-based international private-equity fund who once practiced law in Hong Kong and Beijing.
That's no comfort to American defendants who must accept court judgments that Chinese manufacturers can flout.
Moreover, without the threat of high-dollar damage claims, Chinese and other foreign manufacturers can continue to produce shoddy and dangerous goods undeterred. That's clear from another part of the CPSC's list of recalls. It cites 2008 makers of faulty and sometimes deadly products that the agency deemed defective years ago but are still being shipped here. They included breakable toys on which infants can choke, lead toys, toys painted in appetizing lead-based colors and cribs whose slats are far enough apart to trap babies' heads.
To be sure, the frequency of recalls that involve Chinese makers reflects the country's outsized role in supplying Americans with low-priced goods. Roughly 40 percent of imported U.S. consumer goods are from China.
Their recall rate is much higher than 40 percent, however. In 2007, the CPSC named Chinese makers in 69 percent of all recalls, of both imported and domestically produced goods. In 2008, China's share was 53 percent.
There are four impediments to lawsuits by American plaintiffs that lawmakers would like to remedy:
First, some imports say only "Made in China" on them and don't name the manufacturers. That's the case for lots of the drywall that the CPSC links to gases and corroded metals in hundreds of new homes, mainly in Florida and other Southeastern and Gulf Coast states. Producers can be tracked through retailers, wholesalers, importers and exporters, but it's expensive and time-consuming work, said Chuck Stefan, a principal in The Mitchell Co. of Mobile, Ala., a Southeastern homebuilder tagged with defective drywall problems in 45 homes.
Second, once a foreign maker is identified, the suit must be translated into the native language, delivered to the manufacturer's home government and served on the company by an agent of the home government. In China, this usually takes a year. When a powerful government-owned company is involved, as China's biggest gypsum producer allegedly is in the drywall case, serving legal papers can take much longer.
Third, U.S. state and federal courts vary in their standards of how much business foreign manufacturers must conduct in a state before it's fair to sue them. Is it enough, for example, if a company's products have been offered at a convention in the state? Or if the territory of a distributor includes the state? If a judge deems the ties inadequate, a foreign company "may not be able to be sued in the U.S. at all," said Louise Ellen Teitz, a specialist in transnational litigation at the Roger Williams University School of Law in Bristol, R.I.
Fourth, even if a U.S. court finds a Chinese manufacturer liable for a defective product, getting money from the company is difficult if it has no American assets. Moreover, no agreement exists between the U.S. and China when it comes to enforcing judgments. So an American plaintiff, in many cases, would have to refight the case in a Chinese court to recover damages.
In addition to encountering these obstacles in suits that involve foreign manufacturers, plaintiffs' lawyers also are faced with their use as negotiating tools by Chinese companies' attorneys, said Thomas Gowen, a specialist in international product-liability claims at the Lock Law Firm in Philadelphia. "They say, 'You're never going to collect, so you might as well take what we're offering you.' And this is often less than what the case might be worth.''
Some help may come from Democratic Sen. Sheldon Whitehouse of Rhode Island, the chairman of the Subcommittee on Administrative Oversight and the Courts. He's preparing a bill that would require foreign manufacturers to:
_ Register their companies in the U.S. if they sell here.
_ Retain American agents who could be sued.
_ Consent to jurisdiction in single states.
More aggressive steps, such as requiring foreign manufacturers to take out liability insurance that's sufficient to cover judgments against them, seem unlikely. That's largely because American manufacturers fear that other countries might impose similar measures on imports from the United States.
http://www.mcclatchydc.com/economy/story/70986.html
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