Federal Judge Rules for Homeowners in Chinese Drywall Trial

It's official: Chinese drywall attacks and severely damages copper and silver components of homes where the drywall is installed, and to correct the problem, all the drywall in the home must be removed and replaced, along with wiring, plumbing, air conditioning equipment (including ductwork), and interior finish components such as trim, flooring, cabinetry, and carpeting. That's the ruling from U.S. District Court Judge Eldon Fallon in the first "bellwether" trial in the Multidistrict Litigation proceedings for homes containing Chinese drywall. In houses where Chinese drywall is mixed with non-corrosive U.S.-made drywall, the judge ruled, all drywall from whatever source must be stripped, and all wiring, plumbing, and air conditioning systems throughout the house must be replaced. The case is called "Germano, et al. v. Taishan Gypsum Co. Ltd., et al., case no. 09-6687," and pits seven Virginia homeowners against the Chinese government-owned manufacturer Taishan Gypsum. Judge Fallon's decision in the case is posted at the court's website. In the published ruling, the judge walks through a point-by-point description of the damage the drywall causes to various home components, explaining why the only appropriate remedy is to completely remove and replace the affected building materials. The court rejected all suggestions by drywall manufacturer Knauf Tianjin, appearing on behalf of the absent Taishan Gypsum, that the problem might be solved by removing only certain pieces of drywall or by cleaning copper components rather than replacing them; this partial fix, the judge determined, would be ineffective as well as too expensive, and would not suffice to make the homeowners whole. The judge issued a finding of fact that Chinese-made drywall creates a "severe industrial" corrosive environment inside the home, as defined in a standard created by Batelle Laboratories — the most severe of four levels of corrosion risk set forth in that standard. The corrosive gases emitted by the drywall can penetrate wiring insulation, he stated, and once the process has begun, corrosion caused by deposits on original wiring, plumbing, and air conditioning coils would continue even after all drywall has been replaced. Furthermore, the judge ruled, replacement of selected portions of wiring, plumbing, and air conditioning is not practical or cost-effective. Accordingly, the judge ordered, remediation in affected homes must extend to replacement of all the vulnerable building materials. "The only economically feasible option, at least at the present time," the judge writes, "is to totally gut the structure, take it down to the studs and remove and replace all wiring." Other elements in the home that have to be removed in order to gain access to the drywall, wiring, plumbing, and air conditioning elements are likely to be damaged in the process, the judge ruled, and should be replaced as part of the remediation. This requirement applies to cabinets, carpeting, and wood or vinyl flooring — all must go. Some tile flooring, the judge ruled, might be able to be protected and left in place. Wall or ceiling insulation, however, must be replaced. Same for kitchen and bath fixtures, the judge ruled: "Sinks, toilets and shower enclosures generally must be removed when the drywall is removed because they are installed on top of drywall or to enable the remediation workers to move freely. It is more cost-effective to replaced these items than to gently remove, safely transport and store, and reinstall at a later date." After removal of drywall and components, the judge ordered, homes must be vacuumed with HEPA vacuum equipment, wet-wiped or power-washed, and allowed to "air out" for several weeks. The judge ruled that loss of value in the homes after remediation could not be firmly established, calling these economic losses "speculative." However, he ruled that homeowners were entitled to reimbursement of their living costs outside the home while remediation is accomplished. The dollar damages awarded in the case apply only to the seven homes involved in this "bellwether" example case. After a detailed discussion of the experience of each homeowner in the case, Judge Fallon awarded damages to each based on their particular circumstances. In total, the seven families are entitled to collect $2,609,129.99, he ruled. However, there's no telling whether these families, or any homeowners whose drywall was provided by Taishan Gypsum, will ever collect a dime from the manufacturers. Taishan Gypsum did not appear in court, and there is no indication so far that the Chinese government, which owns the firm, intends to recognize the U.S. court's authority. To date, diplomatic efforts by the U.S. have not produced any tangible result. On the other hand, the precedent set in the Taishan case will apply to other homes with Chinese drywall, including drywall supplied by Knauf Tianjin. And the parent company, German-based Knauf, may be accountable in the U.S. because of the company's extensive business here, which involves a wide range of building materials. The court appears ready to consider all Chinese-made drywall as essentially equivalent in terms of its harmful effects: wrote the judge, "The Court was presented evidence by both [the Plaintiffs' Steering Committee] and Knauf experts that the chemical and physical properties of Chinese-manufactured drywall do not differ significantly from region to region or state to state." Judge Fallon has already heard evidence in a second case involving Chinese drywall supplied by German-owned Knauf Tianjin; a ruling in that case has not yet been handed down, but the judge has promised to act quickly.