Drywall settlement draws mixed views

U.S. Sen. David Vitter applauded the settlement Thursday of litiga-tion in U.S. District Court that would allow homeowners reimbursement for the cost of remediation regarding homes built with toxic Chinese drywall. Louisiana Attorney General James D. “Buddy” Caldwell cautioned that the fight for homeowners might not be over locally.

Knauf Plasterboard Tianjin, a German-owned Chinese drywall manufacturer, has agreed to pay to repair approximately 4,500 damaged homes in Louisiana, Mississippi, Alabama and Florida.

Knauf Plasterboard Tianjin is the Chinese subsidiary of Knauf, which is headquartered in Germany. Other Chinese-owned companies that shipped toxic drywall to Louisiana and other states have shown no interest in a settlement, and Vitter is urging Ambassador Locke to push China to work toward a fair settlement for homeowners from those companies as well.

“This announcement is good news, and it’s what I’ve been pushing for in meetings with trade officials and former Commerce Secretary Gary Locke, who is now ambassador to China,” the congressman said. “While this settlement is a step forward in the process to bring relief to homeowners, there is still much to be done to ensure that all the victims receive just compensation for the damage caused by toxic Chinese products.”

Caldwell said the Chinese drywall settlement does not cover separate claims made by the state, adding that he intends to actively pursue and hold Knauf accountable for “bad faith efforts,” including failure to notify consumers of the defective drywall.

As many as 10,000 buildings in the four states listed as plaintiffs suffered damage such as appliance failure and the corrosion of metal parts due to the drywall. Many homeowners also reported health problems resulting from exposure to the drywall.

“Hurricane Katrina was a natural disaster, but the bad faith actions of Knauf were entirely man-made and victimized citizens yet another time,” Caldwell said. “We intend to fully pursue claims on behalf of Louisiana’s taxpayers for the losses in tax revenue and property value.”

Caldwell filed suit in 2010 on behalf of the state against Knauf and other defendants who manufactured, distributed, sold and installed defective and toxic drywall in Louisiana during the rebuilding efforts following hurricanes Katrina and Rita.

Research has shown that the defective drywall emits sulfur and sulfur compounds, which are especially high during hot and humid weather, conditions that are prevalent in Louisiana.

Those sulfur compounds were also found to corrode the copper and silver used in home air-conditioning vents, copper outlets, and wiring and silver contacts in electronic equipment.

“Our investigation has shown that the bulk of Chinese drywall entering Louisiana was manufactured by the Knauf entities, whose parent companies are based in Germany,” said Caldwell. “The state’s lawsuit seeks penalties and recovery for damages, losses, and injuries.”

In Louisiana, about 109 homes located primarily in the parishes of St. Tammany, Ascension, East Baton Rouge and Orleans are included in the pilot program.

Many of the homes in Louisiana have already been completed.

Preliminary settlements with drywall suppliers Interior/Exterior Building Supply Ltd and Banner Supply Co., two of the main distributors of Knauf drywall, have been approved with hearings set for early February.

Caldwell said the discovery process is progressing against the entities controlled by the Chinese government, with additional depositions scheduled for January in Hong Kong.

The Louisiana attorney general has worked with the U.S. Consumer Product Safety Commission regarding claims. In September, he notified Louisiana residents with problem drywall of the updated remediation guidance provided by the CPSC and the U.S. Department of Housing and Urban Development.

Caldwell said homeowners who believe they may have defective drywall may come forward and call the Louisiana Attorney General’s Consumer Protection Hotline at 1-800-351-4889 or visit www.agbuddycaldwell.com.