Chinese Drywall Litigation News: Part II

Chinese Drywall Litigation News: Part II

By Jim Harvey

Many cases are pending in state and federal courts from Virginia through Louisiana over damages caused to homes built with Chinese Drywall.  While the Consumer Product Safety Commission continues a massive investigation into the matter, the courtroom developments are leading the way to guide the industry and homeowners at this point. 

The suits brought in federal courts against the manufacturers, suppliers, contractors and developers were transferred to a single judge in Louisiana to handle the similar matters as part of a "Multidistrict Litigation."   In April, 2010, Judge Fallon issued his first ruling in favor of a group of homeowners in Hampton Roads [enhanced version available to lexis.com subscribers].   He found that Chinese Drywall has significantly higher concentrations of strontium and sulfur gasses that are harmful to humans, cause offending odors, are corrosive to metals, especially copper and silver, cause appliance and electronics failures, and pose an increased fire risk. As a result, he ordered the following remedies:

  • All drywall needs to be removed and replaced (both Chinese and other drywall);
  • All electrical wires need to be replaced;
  • All copper pipes need to be replaced;
  • All HVAC units need to be replaced; and
  • Most electrical and appliances need to be replaced;

In addition, carpet, hardwood floors, cabinets, countertops, trim molding and baseboards, plumbing fixtures, insulation must be replaced as part of the remediation process, and then the homes HEPA vacuumed and air quality tested.  The average cost for these remediation measures is $86 per square foot.  Many may conclude that it is better to demolish the home and rebuild to avoid a continuing stigma of a Chinese Drywall home in the real estate market, although the judge did not award such damages.  

Since Judge Fallon's initial decision, one of the main suppliers and defendants, Knauf Plasterboard, reached a settlement agreement with another class of homeowners. In addition, in Florida, the first jury verdict was awarded to homeowners in the amount of $2.4 million, against Knauf and a Miami supplier.  These court decisions may well reduce the future litigation over the cause and costs of Chinese Drywall damage, and shift the focus now to collection from the ultimate manufacturers in China, to the extent possible.

Authored by attorneys, these articles are meant to bring awareness to these topics and are not intended to be used as legal advice. For more information, contact Mike at 757-446-8626 or Bill Franczek at 757-446-8600. Visit www .vanblk.com , for our library of Construction Law Tips.  Suggestions for a topic? E-mail bfranczek@vanblk.com.

 

Jim Harvey is a partner with Vandeventer Black and concentrates his practice in construction law, public contracts, products liability and general commercial litigation.

He often represents owners, contractors, subcontractors, suppliers, and bonding and insurance companies in a variety of disputes and contract analysis. Some of his more notable engagements include representation of a large, international bridgebuilder on projects along the east coast, representation of several general contractors on high profile local projects, and several products liability cases involving failed building materials. Jim represents clients in litigation, before state and federal courts, agencies, and boards of contract appeals, as well as in arbitration and other forms of alternative dispute resolution procedures.