U.S. Judges Rule Against Chinese Companies in Defective Drywall Cases

chinese drywall Judges in separate decisions in two different states have ruled that a Chinese drywall manufacturer who used millions of square feet of defective drywall in American homes must answer to U.S. courts for his actions.

The drywall was manufactured by Taishan Gypsum Co. (TG), the world’s largest drywall manufacturer, and its wholly-owned subsidiary, Taian Taishan Plasterboard Co., (TTP) and was installed in more than 3,000 homes in Louisiana, Florida, Virginia, Alabama, Mississippi and southeast Texas.

The companies began importing the drywall to the U.S. in 2001.  In 2005, a shortage in American-made drywall developed due to the housing boom and the occurrence of several hurricanes and Chinese drywall sales soared.  The lawsuits were heard in Louisiana and Florida.

Among the issues in contention are environmental concerns.  Within six months of the drywall installation, homeowners and occupants began to experience unusual odors, blackening of copper pipes, wiring, air conditioning coils and silver jewelry.  Health problems also developed including skin and eye irritation, nosebleeds, headaches and respiratory issues such as difficulty in breathing, chronic coughing and asthma attacks.

The problems were alleged to be due to the emission of sulfurous gases from the plasterboard.  Thousands became plaintiffs in the class action suits against the Chinese companies.

The drywall manufacturers maintained that the American courts lacked personal jurisdiction over them in the case.  This means they were claiming the U.S. did not have power to decide the civil dispute because the Chinese businessmen did not have significant contacts with the places (states) where the action allegedly occurred.

Judge Eldon Fallon, who gave the opinion in an Eastern District of Louisiana case, stated TG actively pursued business ties with local builders and suppliers in Virginia, Florida and Louisiana.  It knew the products were intended for use in the states’ reconstruction efforts after Hurricane Katrina and boasted about being a worldwide supplier of drywall citing its U.S. business as an example.

Fallon labeled the company’s claim of hardship after reaping the benefits as “disingenuous.”  He noted that, “Markets are worldwide and it is now in everyone’s interest to discourage the manufacture and distribution of defective products.”

In a similar state case in Florida, Judge Joseph Farina held that “TG and TTP had sufficient business dealings and contact in Florida to satisfy the exercise of jurisdiction.”  The judge said the companies “actively courted” customers in Florida by inviting Florida business representatives to visit the drywall factory in China, entered into distribution agreements with these companies and shipped drywall to Florida.

Farina rejected the contention that litigating the matter in Florida would be too burdensome for the defendant.  “The evidence relating to damage is located in Florida, as are the parties and many witnesses,” he said.  “TG manufactured and sold a defective product, placed this product in the stream of commerce, and profited from its sales,” Farina ruled.

The companies had also argued that they lacked sufficient mastery of the English language to fully understand the legal documents.  Farina dismissed this issue also stating that a translated complaint had been served on the Chinese company.

Defective product cases can be very complex.  At Slater & Zurz, LLP our experience with Ohio Product Liability Law will help you as you seek fair and complete compensation for an injury.  Please contact us for a free consultation by calling 1-888-534-4850 or send us a message by completing the FREE CASE REVIEW form located on the top right-hand side of our website, slaterzurz.com.

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About slaterzurz

Slater & Zurz LLP is an Ohio law firm of highly experienced and respected attorneys. Over the last 40 years, we have developed a reputation for getting positive results for clients. We've been trusted with handling over 20,000 personal injury cases and our clients have received more than $120,000,000.

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