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Chinese Drywall, the U.S. Housing Bubble, and Civil Justice

By Andy Hoffman

The ?hot mess? that is the Chinese drywall fiasco seems to be getting hotter by the day?at least according to blockbuster investigative piece by Tim Elfrink in today?s Broward-Palm Beach New Times.

While the story is striking on numerous levels, what particularly caught our attention was the blatant culpability of developers and builders, who were so eager to cash in on the late 1990s/early 2000s housing boom, that consumer safety was essentially tossed out the window.  In fact, until then, Chinese drywall manufacturers like Knauf Tianjin ?rarely exported drywall to the States.?  But when the U.S. housing market ?exploded?, Chinese companies started supplying drywall that ?the company eventually knew was faulty.?

Home­owners immediately reported problems, but that didn?t stop the builders.  As Richard Kampf, a former EPA chief who was one of the first homeowners to raise a red flag about Chinese drywall (in 2007) discovered, some manufacturers and builders knew as early as 2006 that something was wrong with the drywall.  ?They knew this stuff was bad, and they kept right on shipping it.  And Florida builders kept right on using it.?

Meanwhile, the government?s reaction, whether due to a lack of coordination or the considerable political influence of developers who, are ?the most politically connected industry in Florida,?  has been anything but stellar.   Said state Senator Dave Aronberg, "The government has dragged its feet on testing, the state has not acted... and there's been no real legislation?.It's inertia, and it's a sheer lack of political will holding us back."  In fact, said Aronberg, "The only people taking any initiative are trial lawyers." 

Lawsuits against ?the builders, the importers, the manufacturers, and the distributors? have now been filed in Florida, Virginia, and Louisiana, which are ?the three states most affected by the drywall.?  Many are class actions and in one, ?Knauf, the German-owned company that seems to have imported the most Chinese drywall to Florida, has agreed to be tried in Louisiana.?  That?s a good start.

Full post as published by ThePopTort on January 06, 2010 (boomark / email).