When Bill Morgan, a retired policeman, moved into his newly built dream home in Williamsburg, Va., three years ago, his hopes were quickly dashed.
Bill Morgan blames Chinese drywall for toxic fumes and corrosion in components of his home.
Bill Morgan had to abandon his newly built dream home in Williamsburg, Va., blaming drywall for corrosive fumes that attacked metal objects.
In short order, Mr. Morgan moved out. The headaches and nosebleeds stopped, but the ensuing financial problems pushed him into personal bankruptcy.
“My house is not worth the land it’s built on,” said Mr. Morgan, who could not maintain the mortgage payments on his $383,000 home in a Williamsburg subdivision called Wellington Estates and the costs of a rental property where his family decamped.
Mr. Morgan, like many other American homebuyers who tell similar tales of woe, is blaming the drywall in his new home — specifically, drywall from China, imported during the housing boom to meet heavy demand — that he says is contaminated with various sulfur compounds.
Hundreds of lawsuits are piling up in state and federal courts, and a consolidated class action is moving forward in Louisiana before Judge Eldon E. Fallon of Federal District Court, who will begin hearing cases in January.
Three hundred cases have been filed in Louisiana alone, many with similar complaints from homeowners — a noxious smell, recurrent headaches and difficulty breathing. In Florida, the health department has received over 500 complaints with such symptoms.
In addition, these suits say, metal objects in homes corrode quickly, causing kitchen appliances, air-conditioners, televisions and plumbing to fail.
“There could be 60,000 to 100,000 homes that are worthless and have to be ripped completely down and rebuilt,” said Arnold Levin, a Philadelphia lawyer and co-chairman of the plaintiffs’ steering committee.
While tainted Chinese imports like toothpaste, pet food and baby formula have been quickly removed from store shelves, drywall is installed throughout homes and does not lend itself to a quick fix.
This month, the Consumer Product Safety Commission, whose investigation into Chinese drywall is the largest in its history, will release the results of a study to determine why the drywall is causing the problem, and what kind of remediation programs might be effective.
Already, the commission has sent six investigators to Chinese gypsum mines and to meet with the government there. The Chinese government’s counterpart to the federal safety commission sent two of its experts here to inspect affected homes.
The commission is also making sure that no more Chinese drywall comes into the country.
“Our ports are on alert,” said Inez Tenenbaum, chairwoman of the commission. “They are not letting any in. The market, too, has corrected. No one wants Chinese drywall.”
Even President Obama is being pressed by members of Congress to raise the issue on his November trip to China — the loudest cry coming from Senator Bill Nelson, Democrat of Florida, who has traveled to China on his own to learn more about the drywall problems.
Investigators are finding that getting scientific data, establishing legal accountability and following a supply chain is difficult when so many drywall sheets — millions in all were brought into the United States — were simply marked “Made in China,” providing no clues to their actual source. The drywall was brought in because United States supplies ran low, not as a cost-saving measure for builders.
One target of the lawsuits is Knauf Plasterboard Tianjin, a German company with manufacturing plants in China that supplied about 20 percent of the Chinese drywall brought into the United States.
Don Hayden, the company’s lawyer, said that its own toxicology tests from affected homes showed that the drywall presented no health problems. Even so, he said his company was cooperating with American government investigations.
“Unlike other Chinese manufacturers, we are the only one to come to the United States to address this problem,” said Mr. Hayden. “We’ve spent considerable time and energy and hope that we can provide a workable solution to U. S. homeowners.”
One puzzle is why problems have surfaced in the United States and not Asia, where drywall was also sold. According to a safety commission official who declined to be named because of the delicacy of the issue, a theory offered by Chinese officials during their visit to the United States was that American homes are more tightly built, with less ventilation than homes in China.
Venture Supply, on a panel of drywall near the attic access door.
One drywall manufacturer, the Taishan Gypsum Company, which is controlled by the Chinese government, was found to be in preliminary default last week by a federal judge after the company failed to show up in court.
But whether the Florida builders who brought the class-action lawsuit could ever collect on any future judgment remains unclear, because of the difficulty of gaining jurisdiction and enforcing rulings against foreign companies, especially in China. In other cases, many of the Chinese companies cannot be found or have disbanded.
Homeowners, insurers, home builders, drywall suppliers and Chinese manufacturers, if they can be identified, are often suing each other. Drywall installers and suppliers are also expected to be targets of the next wave of litigation. Many lawsuits need to be translated into Mandarin and follow rules of international law, adding layers of difficulty.
Among the homeowners filing suit are the lieutenant governor of Florida, Jeff Kottkamp; and Sean Payton, head coach of the New Orleans Saints, who has moved out of his Mandeville, La., home.
The product safety commission has received more than 1,300 complaints from 26 states, but the bulk are from Florida, Louisiana and Virginia, where hurricanes led to an unprecedented housing boom in 2006 and 2007.
In 2006 alone, nearly seven million sheets of drywall were imported from China. The federal court in the Eastern District of Louisiana has identified 26 brands of drywall, but 11 others had no markings other than variations of “Made in China.”
Insurance companies, in particular, have become a popular target of lawsuits over their refusal to pay claims filed by homeowners and home builders, stating that their policies do not cover problems caused by pollutants.
There are estimates that it costs $100,000 to $150,000 per home to rip out and replace tainted drywall and the electrical equipment attached to it. In these cases, homes are being stripped down to the studs and new drywall is installed.
Some home builders, worried about their reputations, are doing just that. The Lennar Corporation has set aside $40 million for home repairs, while it tries to collect from its insurance company and sues several Chinese suppliers and American middlemen. Lennar declined to comment.
But many smaller home builders, hoping to survive the downturn, do not have such deep pockets. “This couldn’t have come at a worse time for the industry,” said Jenna Hamilton, assistant vice president of government affairs at the National Association of Home Builders.
For that reason, some members of Congress hope the federal government will provide financial assistance for their constituents, just as it does after natural disasters.
There may be local relief, too. Broward County, Fla., has cut property assessments as much as 20 percent in some affected areas and Miami-Dade is considering a similar tax break. “Florida is hypersensitive to hurricanes and this is like a silent hurricane,” said Representative Robert Wexler, Democrat of Florida. “Whole neighborhoods are being wiped out in terms of property values and people’s ability to remain in their homes.”
Help could not come soon enough for Mr. Morgan’s Virginia dream home.
“Every piece of drywall in the house except for four pieces is Chinese,” said Mr. Morgan. ”We built our home to be safe from floods, and for three years we’ve been breathing this stuff.”
Mr. Morgan said that metal fixtures in his house turned black. His air-conditioner and electrical outlets failed. Lamps and mirrors tarnished immediately. Neighbors, too, had similar problems..
Mr. Morgan bought his house in 2006 after his family spent two years living in a trailer provided by the Federal Emergency Management Agency when their previous home was destroyed in 2003 by Hurricane Isabel. Mr. Morgan has lost the equity in his home, but he still drops by to cut the grass.
“When I drive by my house, it breaks my heart,” he said.
By Leslie Wayne, The New York Times, October 7, 2009.