According to a release last week from the Consumer Product Safety Commission (CPSC), homes containing defective (Chinese) drywall should be gutted. "We want families to tear it all out and rebuild the interior of their homes," said Inez Tenenbaum, chairwoman of the commission, the federal agency charged with making sure consumer products are safe.
The drywall has been linked to corrosion of wiring, air conditioning units, computers, doorknobs and jewelry, along with possible health effects. Tenenbaum said "some samples of the Chinese-made product emit 100 times as much hydrogen sulfide as drywall made elsewhere." Therefore, the new CPSC guidelines say the interior including electrical wiring, fire alarm and sprinkler systems, carbon monoxide alarms and gas pipes all need to be removed. The problem is, how to deal with the costs of the rehab. In some cases, homebuilders like Lennar are footing the bill. In others, homeowners have been stuck with paying for the work themselves.
The good news is that yesterday, a Federal District Court Judge in New Orleans ruled in favor of the plaintiffs in a suit against Taishan Gypsum, a Chinese company known to have manufactured a large quantity of the defective wallboard. The court awarded $2.6 million in damages. In addition, the judge's ruling went further than the new CPSC guidelines, saying essentially it will require a gut rehab including removing all heating and cooling systems, appliances, carpeting, cabinetry, trim work and flooring.
While the ruling is not binding beyond this case itself, it will set a precedent for all other affected homeowners to follow. However, it still remains to be seen how the plaintiffs will collect, as civil judgments in U.S. courts aren't enforceable in China. And, since this is just the first in a series of federal and state lawsuits being brought against manufacturers, distributors, suppliers and homebuilders, the hope is it will start the ball rolling on homeowners being able to recover damages for the use of the defective drywall. Some, including U.S. Senator Bill Nelson are even pushing for the federal government to consider stepping in and playing a role. Suggestions include setting up something like a national fund whereby insurers, builders and other parties would contribute proceeds to help with the repairs. Others think consideration should even be given to seizing U.S.-bound ships and cargoes from the Chinese drywall manufacturing companies. However, as with all things of this financial magnitude, only time will tell how the problem is going to finally shake itself out.