Posts Tagged ‘ chinese drywall ’

Defective Products—Will the World be held Accountable?

January 13th, 2011. By janem

Wikileaks just got wind of a secret document from Chinese officials regarding the pending Foreign Manufacturers Legal Accountability Act of 2010, or FMLAA. If the bill is passed, China plans to buy “Made in America” products, from toys to drywall, splatter  them with lead paint and sell these defective products to countries that trade with the US.  Why, you may ask? Because China wants to level the playing field: If the US can sue China under the FMLAA for contaminated drywall and defective toys, “foreign countries” (including Canada and the EU) can sue the US because their “Made in America” products are contaminated with lead paint.

KIDDING!  But it may have crossed the minds of unscrupulous Chinese manufacturers…

Last February, Representative Betty Sutton introduced the FMLAA following the Chinese drywall debacle, which came on the heels of other problems with imported products—from baby cribs and toys to auto brakes. This bill will take the Consumer Product Safety Improvement Act of 2009 one step further, to product litigation. It means that foreign manufacturers who ship to the US will have to hire a resident US agent, who will then have to “accept service of process on behalf of such manufacturer or producer for the purpose of all civil and regulatory actions in State and Federal Courts.” No registered agent, no importation.

On Tuesday, January 11^th, the Supreme Court was scheduled to hear two cases about the right to sue a foreign manufacturer in the U.S. court system.

In the first case, Robert Nicastro lost his four right fingers in 2001 while operating a machine used to cut metal made by McIntyre Machinery, based in the UK. The machine Nicastro was operating did not meet U.S. safety standards, but was marketed at trade shows across the US for 15 years. Nicastro brought a product liability case against the company in 2003, and McIntyre is arguing that because they are a UK company, they did not have sufficient “contacts” in New Jersey for the state’s legal system to have jurisdiction over them.

In the second case, two young boys, Matt Helms and Julian Brown were killed in a bus accident while traveling to Paris, France for a soccer tournament. The driver of the bus lost control when the Goodyear tire from the bus had its plies separate, causing the bus to rollover. The families of the boys are seeking to hold Goodyear Luxembourg, the manufacturer of the tire, accountable in the North Carolina court system.

Meanwhile, the head of the US Consumer Product Safety Commission seems to be up against a brick wall (pardon the pun) after meeting with her counterparts there about defective Chinese drywall, among other issues. Chinese drywall manufacturers have yet to come to the table for discussions. (According to the CPSC, as of Jan. 7, there were 3,770 incidents reported of defective drywall.)

Perhaps the threat of litigation under the FMLAA will get them talking.

Tags: chinese drywall, defective auto, lead paint toys
Posted in Defective Products | No Comments »

Chinese Drywall: Now Finger’s Pointing at Banks

November 10th, 2010. By LucyC

Well, it seems like the perfect storm has arrived on the doorsteps of American banks. For quite some time the pressure has been building around banking practices, specifically due diligence on foreclosures, which has recently resulted in a rash of class action lawsuits in various states across the country (see above chart for the breakdown of Chinese drywall reported incidents by state), as well as investigations by Attorneys General in several states. And there will likely be more to come. Now, in a bizarre twist of fate, it seems the Chinese drywall debacle has been added to the foreclosure mess. And what a witches brew it is. 

This week, the Chinese Drywall Complaint Center (CDCC)—a national watchdog group—has issued a press release stating that “we are now targeting greedy US banks, for reselling toxic Chinese drywall foreclosures in Florida, and other US States, without an oh by the way—anytime after February of 2009.” They go on to state that “by March of 2009 we do not think there was a single US bank, or loan servicer that was unaware of the toxic Chinese drywall disaster—yet they continued to sell their poisonous foreclosures AS IS—no disclosure of this toxic Chinese drywall product to unsuspecting US consumers?” And, “For clarification purposes the Chinese Drywall Complaint Center is saying, “contrary to homebuilder claims about only using toxic Chinese drywall after Hurricane Katrina in August of 2005—toxic Chinese drywall has been used in Florida since as early as 2001.” 

According to the CDCC website, the organization has “now determined with 100% certainty, that imported toxic Chinese drywall has been installed all over the US Southeast including the states of Florida, Louisiana, Virginia, Mississippi, Alabama, Southeast Texas, Virginia, Georgia, and South Carolina. Tragically, we believe toxic Chinese drywall has also been installed in all other regions of the United States. However, without high thresholds of heat & humidity, it becomes much more difficult to see the worst effects of toxic Chinese drywall.” 

And, they also state that “many homes in the US Southeast have toxic Chinese drywall intermixed with US made drywall. If these homes were built or remodeled after 2001, we believe a small amount of imported Chinese drywall is enough to make an entire house toxic. The net result is [that] instead of ending up with tens of thousands of now toxic US Southeast homes, we are convinced we have 100,000’s of toxic US Southeast homes.” 

It’s highly likely that people have purchased foreclosures that contain Chinese drywall. Thinking about who might be liable, though, actually makes my head spin: purchasers need due diligence such as home inspections; and lenders like to make sure the property is in good nick before they finance the mortgage; but then if it’s a foreclosure, wouldn’t the bank selling the house have to disclose that it was contaminated with Chinese drywall—provided they knew? And for that matter, does anyone have to disclose that a house is contaminated with Chinese drywall? These and many more questions come to mind. For my money, finding the answers would definitely be best left to lawyers. 

But—deep in the midst of the Chinese Drywall hurricane there is some good news. Recently, Chinese drywall manufacturer Knauf Plasterboard Tianjin Company agreed to pay to repair 300 homes in Florida, Louisiana, Alabama and Mississippi in a pilot remediation program. Reportedly, a Louisiana-based supplier and several home builders and insurers are contributing to the cost of the repairs. More than 3,000 claims are supposedly pending against Knauf. Let’s hope it goes well, because if it does the program might provide a framework for a larger settlement, which no doubt would be welcome.

Tags: Banks, chinese drywall, Foreclosures
Posted in Defective Products, Financial | No Comments »

Chinese Drywall Tax Breaks? IRS Says Yes

October 12th, 2010. By LucyC

As the unfortunate saga of Chinese drywall continues to unfold, a new and welcome twist has emerged. On September 30, 2010, the Internal Revenue Services (IRS) made public its Revenue Procedure 2010-36—which implements tax breaks for people whose homes contain or contained the toxic stuff. In short, the IRS is allowing taxpayers to claim a casualty loss on the repairs of the drywall and any household appliances that were affected—against their taxes. 

Apparently, this tax break is the first large-scale effort by the federal government to provide financial relief to victims of Chinese drywall. The IRS says it will give tax breaks to homeowners who suffered property losses due to bad Chinese drywall installed in their homes between 2001 and 2009. People can file amended tax returns to claim the deduction. 

Deductions are allowed only on amounts that exceed $500. In order to receive the tax break, homeowners must also have started the process of repairing their homes, and the amounts paid for repairs must exceed 10 percent of the taxpayer’s adjusted gross income.  

This move could affect thousands, if not tens of thousands of homeowners. The Homeowners Consumer Center in Washington, DC says Chinese Drywall has allegedly been Read the rest of this entry »

Tags: chinese drywall
Posted in Defective Products | 3 Comments »

Bought Drywall at Lowe’s? There’s a Settlement…

August 11th, 2010. By LucyC

A rather big announcement this week for people who purchased sulfur contaminated drywall from Lowes, the do-it-yourself (DIY) home building supplies retailer. They have agreed to pay the equivalent of $6.5 million in gift cards, to end a class action lawsuit that claimed they sold defective drywall. 

So if you bought defective drywall—i.e. sulfur laden drywall—Chinese drywall—you know the stuff—at Lowes, you could be eligible for a gift card. FYI—there doesn’t appear to be any information on how much the gift cards will be for. 

The settlement agreement, interestingly, didn’t specify where Lowe’s obtained their defective drywall, but in a report by the Wall Street Journal, a company spokesperson is quoted as follows “Lowe’s has been assured by vendors who provided stock drywall for sales in our stores that drywall they provided was not imported from China. But the settlement includes claims of all types of allegedly defective drywall people claim to have purchased from Lowe’s.” 

I don’t know if it’s just me but $6.5 million seems a rather paltry amount, considering the damage inflicted on tens of thousands of unsuspecting homeowners. Although it is larger than the settlement awarded in the first Chinese drywall trial brought by Lisa and Armin Seifart. More on that in a minute. 

According to the Homeowners Consumer Center in Washington, D.C, Chinese drywall has Read the rest of this entry »

Tags: chinese drywall, defective drywall, Lowe's
Posted in Defective Products, Settlement | 19 Comments »

Chinese Drywall Victim’s Award Like “First to Land on Moon”

June 23rd, 2010. By LucyC

A bit of a landmark lawsuit snuck under that radar this week. A couple from Florida—whom you may have heard of if you are following the Chinese Drywall debacle—Lisa and Armin Seifart—were awarded about $2.5 million by a jury in Miami-Dade County, Florida, in damages and expenses in their defective drywall lawsuit. They had asked for $4 million. 

The Seifarts brought their lawsuit against the Miami-based drywall supplier, Banner Supply, and drywall manufacturer, Knauf Plasterboard Tianjin. It turns out Banner had an agreement with Knauf Plasterboard to replace some 2.3 million square feet of defective Chinese drywall with domestically made product. But, smelling an opportunity to save a buck, Banner only replaced the defective drywall in homes where builders and/or installers actually complained about the smell. Yup, that stinks. Pun intended. Had these companies acted with conscience, thousands of people could have been spared the expense, health problems and general stress that has accompanied this mess. Not to mention the courts’ time that will be used to help in the clean-up. 

FYI—we  are not talking small numbers here. There are some 36,000 homes, according to media reports, affected by the dodgy drywall in Florida alone, and possibly as many as 100,000 nationwide, including California, Alabama, Mississippi, Virginia, and Louisiana. (More problems for the people in the beleaguered Gulf states.)

But let’s get back to the Seifarts for a moment. Two years and $700,000 later—that’s the money they have so far shelled out on repairs to their five bedroom, five bathroom pad—the estimated market value of their house is currently about $200,000.

That’s if they could sell it given the stigma that Chinese drywall carries. Be honest—would you buy a house that had contained sulphur-infected drywall in its original build? 

So even though the Seifarts have gutted their house and are rebuilding, and have been awarded $2.5 million to help them recover—they may be stuck. 

It also remains to be seen whether or not the Seirfarts actually collect their settlement. Just recently, seven Virginia homeowners were awarded $2.6 million by a federal judge, as settlement of their Chinese Drywall suit, but because the manufacturer—Taishsan Gypsum Co did not take part in the proceedings, the verdict is in limbo, as are the homeowners.  

Let’s hope the Seifart’s verdict will make a difference.

Tags: chinese drywall
Posted in Defective Products | No Comments »