Chinese Drywall Ruling in Favor of Homeowners Might Be Difficult to Collect

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For Immediate Release: April 8, 2010

Contact: Jennifer Fuson
202-965-3500, ext. 8369
media.replies@justice.org

Chinese Drywall Ruling in Favor of Homeowners Might Be Difficult to Collect

Shows Need to Hold Foreign Manufacturers Accountable in U.S. Courts

Washington, DC – Today, U.S. District Court Judge Eldon Fallon ruled seven families are entitled to a combined total of $2.6 million for the damage Chinese drywall, made by Taishan Gypsum, had done to their homes.  Unfortunately, Taishan Gypsum, a company owned by the Chinese government, has repeatedly failed to respond to the case.

The following is a statement from American Association for Justice President Anthony Tarricone:

“Taishan Gypsum profited from a product they sold here in the U.S. that has now proven to be defective, costing millions of dollars in damage, decreased property values, and contributed to countless health problems for American homeowners. 

“While the ruling today holds the company responsible, there is no guarantee the company will comply, leaving U.S. consumers and homebuilders to pick up the tab.    This is why it is critical we pass the Foreign Manufacturers Legal Accountability Act, so foreign manufacturers are held to the same standards and justice system as U.S. manufacturers.”

Background:

It is estimated 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.  According to news reports, in summer 2007, three Taishan shipments entered Port Everglades, FL totaling 3 million pounds, and in 2006 and 2007, ships carrying the company’s drywall docked at least two dozen times in New York ports, carrying at least 4.5 million pounds of the material. Taishan Gypsum Co is owned by a state-owned entity that is controlled by the Chinese government.  

Foreign manufacturers today are able to skirt U.S. laws because of the multiple obstacles in place to hold foreign manufacturers accountable in the U.S. civil justice system. 

The Foreign Manufacturers Legal Accountability Act of 2009 (S. 1606), introduced this summer by Senators Sheldon Whitehouse (D-RI), Jeff Sessions (R-AL), and Assistant Senate Majority Leader Dick Durbin (D-IL), will making it easier to hold foreign manufacturers accountable in the U.S. court system by doing several things:

  • Requires manufacturers to have an “agent” located in at least one state where the company does business that would accept service of process for any civil and regulatory claims.
  • Companies would consent to state and federal jurisdiction, holding foreign manufacturers accountable to those judicial standards.

Currently, bringing a case against a foreign manufacturer requires servicing the company in their country, according to their rules of service.  This often requires translating the papers into the language of the native country and tracking down the companies’ foreign address, adding time and expense to the legal process. 

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