Chinese Drywall Class Action Suit Certified in Florida

A class action lawsuit over Chinese drywall has been certified in Florida state court, allowing about 150 Miami-area homeowners to pursue compensation from drywall suppliers and builders who allegedly built homes with toxic wallboard imported from China, which has been found to release foul smells and cause corrosion throughout the home. 

The Chinese drywall class action suit was certified last week by Miami-Dade County Circuit Court Judge Joseph Farina. The case was originally filed by Jason and Melissa Harrell, homeowners in the Keys Gate subdivision in Homestead, but could include as many as 152 homeowners from the same subdivision. The class action lawsuit is limited to domestic defendants, including Banner Supply, which sold imported Chinese drywall domestically, Keys Gate Realty and Palm Isles Holdings LLC.

According to the complaint, Banner Supply knew the Chinese drywall they were selling was defective. Banner Supply has denied the allegations in the lawsuit.

The U.S. Consumer Products Safety Commission (CPSC) has received more than 3,300 complaints from across the United States from homeowners who say that toxic Chinese wallboard imported between 2004 and 2007 releases sulfuric odors, causes health problems, and corrodes wiring and appliances. Many of the problems with the Chinese drywall have been confirmed by laboratory testing.

Millions of sheets of the toxic drywall were imported from China into the United States due to a domestic shortage caused by a housing boom and construction following a serious of hurricanes that struck the southeastern United States. The CPSC has confirmed more than 6 million sheets were imported into the country in 2006 alone.

Testing performed at the Lawrence Berkeley National Laboratory (LBNL) was used to detect emissions of hydrogen sulfide from a large number of domestic and imported drywall. The CPSC says there is a “strong association” between hydrogen sulfide and metal corrosion. Some of the worst Chinese drywall was found to emit 100 times as much hydrogen sulfide as wallboard made in the U.S.

The Keys Gate lawsuit is the first Chinese drywall class action certified in the U.S., and is likely to be watched closely, despite its limited scope. It is unclear how many homeowners plan to be a party to the lawsuit at this stage. On Friday, a 21-day period began for additional home owners to respond to the lawsuit.

So far, trials over defective Chinese drywall have been focused on foreign suppliers, who have not fared well.

An April 28 ruling by U.S. District Judge Eldon Fallon awarded $164,000 to a Louisiana family that filed a Chinese drywall lawsuit against Knauf Plasterboard Tianjin. The ruling equated to about $81 per square foot. Since that ruling, Knauf has begun seeking settlements with U.S. builders who bought their drywall.

Fallon also issued a ruling in April that awarded $2.6 million to seven Virginia families who filed a lawsuit against Taishan Gypsum Co. over imported drywall problems. However, it is unclear how the families will collect, since China does not acknowledge civil lawsuit judgments in the U.S., and the company did not send a representative to court to answer the charges.

A number of homeowners throughout the United States have filed lawsuits over Chinese drywall, naming manufacturers, distributors and builders. In June 2009, all of the federal drywall litigation was consolidated and centralized in an MDL, or Multidistrict Litigation, in New Orleans under Judge Fallon.