Homeowners Still Without Relief from Chinese Drywall

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For Immediate Release: September 6, 2012

Contact: Jennifer Fuson
American Association for Justice

Homeowners Still Without Relief from Chinese Drywall;

Chinese Maker Held Liable In U.S. Courts


Washington, DC— It took more than three years, but a Chinese company’s efforts to evade responsibility for selling defective drywall in the U.S. may slowly be hitting a brick wall.  Taishan Gypsum sold more than 10 million pounds of dangerous drywall, linked to metal corrosion, sulfuric gases, headaches, asthma, and other health problems here in the U.S.  But for homeowners like Bill Morgan and his family, who paid the price for a foreign company’s dangerous product, the battle has been too long.

Morgan, a retired police officer in Newport News, VA, testified in June 2010 about his legal battle to hold Taishan responsible for his dream home’s demise.  Built with about 200 sheets of Taishan’s dangerous drywall in 2006, the sulfuric gas from the product destroyed his home’s air-conditioning and other electrical systems, computers and televisions.  After experiencing numerous health effects, Bill and his wife, Debra decided to move out, strip the house down to the studs and rebuild.  Unable to pay for the mortgage and rent, they lost the home in foreclosure and filed for bankruptcy.

“Taishan Gypsum’s delay and deny tactics have cost the Morgans their home.  They are the innocent victims when foreign manufacturers sell and profit from their products here in the U.S., but avoid our country’s legal system when their products fail,” said American Association for Justice (AAJ) President Mary Alice McLarty 

This week, U.S District Judge Fallon, overseeing the multidistrict litigation in New Orleans, ruled against Taishan Gypsum, denying the company’s request to vacate a judgment of $2.6 million levied in 2010.  Unfortunately for the Morgan family, collection is not expected soon, as the ruling is likely to go before the U.S. Court of Appeals for the Fifth Circuit. Even then, collection from the Chinese company might not be easy.  

Taishan spent years avoiding legal accountability by refusing to attend the legal proceedings and then claiming it was not subject to U.S. jurisdiction.  Also this week, Taishan lost its latest efforts to skirt the U.S. legal system.  Miami-Dade Circuit Judge Farina denied Taishan’s request to vacate a 2010 default judgment in litigation with homebuilder Lennar Homes.  Lennar sought to recover losses the builder faced from using Taishan’s defective drywall. It is not known if Taishan will appeal the decision, which could further delay Lennar’s recovery. 

“As the judgment in favor of Lennar shows, both American businesses and consumers suffer when a foreign manufacturer cannot be held accountable to meet our safety standards in our legal and regulatory system,” added McLarty. The Consumer Product Safety Commission has not recalled any defective drywall.

As much as 500 million pounds of Chinese drywall has been imported into the U.S., with Taishan Gypsum responsible for more than 10 million pounds.  As many as 100,000 or more homes may have the toxic drywall, and remediation efforts could cost in the billions of dollars.  Taishan is just one of the manufacturers responsible for manufacturing the defective drywall. Knauf, a German brand of drywall manufactured in China, has been in settlement talks for their drywall.

Senators Sheldon Whitehouse (D-RI) and Jeff Sessions (R-AL) and Representatives Betty Sutton (D-OH) and Mike Turner (R-OH) introduced theForeign Manufacturers Legal Accountability Act of 2011” (S.1946/H.R.3646).  The bill would force foreign manufacturers to play by the same rules as American manufacturers by requiring foreign manufacturers to have a registered U.S. agent that would accept service of process for civil and regulatory claims.

For more information on Chinese drywall, families impacted by the drywall, or the Foreign Manufacturers Legal Accountability Act contact Jennifer.Fuson@justice.org.

As the world's largest trial bar, the American Association for Justice (formerly known as the Association of Trial Lawyers of America) works to make sure people have a fair chance to receive justice through the legal system when they are injured by the negligence or misconduct of others—even when it means taking on the most powerful corporations. Visit http://www.justice.org/newsroom.

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