August 27, 2010

Knauf Gips, a German manufacturing company, continues to argue that it is not responsible for the defective Chinese drywall produced by its subsidiary Knauf Plasterboard Tinjian, according to an article from ProPublica.org, “Documents Tie German Company to Chinese Subsidiary That Produced Defective Drywall.”

Knauf Gips claims that Knauf Plasterboard Tinjian, its subsidiary, produced the defective drywall and therefore should be the entity financially responsible.

However, documents filed in Germany and in United States courts show that Knauf Gips is strongly involved in the management of its subsidiaries, which includes quality control, finding raw materials, and dealing with the issues arising from the defective Chinese drywall.

Steven Glickerstien, one of Knauf Tinjian’s attorneys here in the US has stated, “Each Corporation is a separate legal entity, responsible only for its sales and its own profits.”

The Consumer Product Safety Commission Drywall Information Center website states that they have “received about 3,526 reports from residents in 38 states, the District of Columbia, American Samoa, and Puerto Rico who believe their health symptoms or the corrosion of certain metal components in their homes are related to problem drywall.”

Today the CPSC has released, “Summary of Revision 1 to the Interim Guidance – Identification of Homes with Corrosion from Problem Drywall.”

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A Chinese drywall town hall meeting was held in Newport News, VA last night with representatives from the CPSC.

According to Wavy.com, representative Jay Howell went over a the steps that the Consumer Product Safety Commission has taken over the last year in testing the defective drywall, as well as drafting remediation guidelines.

There were questions concerning water safety, health problems, and  foreclosure but there seemed to be no answers.

“There were no representatives from the Health Department or the Centers for Disease Control in the meeting. Del. Glenn Oder (R-Newport News) who co-hosted the event said he would reach out to those agencies for future meetings.”

Homeowners were not the only ones present last night.  Renters who signed leases in homes who have discovered that they have defective Chinese drywall also attended the meeting.  There concern seemed to be focused on getting out of the situation without ruining their credit.

On Tuesday, May 25th the Consumer Product Safety Commission (CPSC) Drywall Information Center released a list of drywall manufacturers whose drywall produced high levels of hydrogen sulfide during testing.  They stated, “There is a strong association between hydrogen sulfide and metal corrosion.”

After testing they were able to determine the top ten samples which released the highest levels of hydrogen sulfide gases.  The top ten were all drywall samples made in China. Some of the emissions rates were documented at 100 times higher that drywall not produced in China.

The top ten included:

1. Knauf Plasterboard (Tianjin) Co. Ltd.: (year of manufacture 2005) China
2. Taian Taishan Plasterboard Co. Ltd.: (2006) China
3. Shandong Taihe Dongxin Co.: (2005) China
4. Knauf Plasterboard (Tianjin) Co. Ltd.: (2006) China
5. Taian Taishan Plasterboard Co. Ltd.: (2006) China
6. Taian Taishan Plasterboard Co. Ltd.: (2006) China
7. Shandong Chenxiang GBM Co. Ltd. (C&K Gypsum Board): (2006) China
8. Beijing New Building Materials (BNBM): (2009) China
9. Taian Taishan Plasterboard Co. Ltd.: (2009) China
10. Shandong Taihe Dongxin Co.: (2009) China

See the active emission levels for each sample here.

The CPSC has also listed other Chinese drywall samples that were tested but did not have significant hydrogen sulfide emission levels.

News Inferno reported that fires, potentially related to defective drywall, may be the newest of concerns that consumers and federal officials alike have been facing since the Chinese drywall crisis gained momentum in 2008.  Fire safety officials have been asked by federal officials to promptly notify them if they have knowledge of fires that may have some connection with defective drywall.

For those homeowners who may be aware that the home they live in contains Chinese drywall – but are not financially in the position to move out immediately – can at least take some comfort in the fact that officials are not aware of fire incidents that have been conclusively linked with Chinese drywall at this time.  The concern, however, is that since electrical wiring in homes may be corroded/corroding as a result of contaminated drywall, fire safety issues could arise.

The primary agency that has handled consumer complaints since the start of the Chinese drywall crisis has been the Consumer Product Safety Commission (CPSC).  The CPSC recently teamed up with the Environmental Protection Agency (EPA) to conduct extensive studies on allegedly defective drywall, in an effort to establish a connection between reported health and home issues with the drywall.

Over three thousands complaints were sourced from almost every state.  Specifically, 37 states and other U.S. territories have sourced complaints to the CPSC.  The complaints range from health related to home related; the complaints include allegations that damage has been incurred to air conditioning systems, components related to plumbing, and insulated electrical wiring among others.  Precisely, the root of the problem is thought by many to be related to the emission of sulfuric gas emissions.  Jewelry has even been corroded according to some homeowners.

Inez Tenenbaum is the head of the Consumer Product Safety Commission (CPSC).  Despite her small physical presence, Tenenbaum is not a pushover in any sense of the word.  President Obama trusts her to oversee a renewal of the agency – an agency of utmost importance during this Chinese drywall crisis period.   The CPSC, a federal agency, has had to deal with an influx of consumer issues in the previous decade – especially from China.

The Charlotte Observer reported today that a longtime friend commented on her “dynamite-like” personality, and that it would be a mistake to underestimate her abilities.  Dealing with China in a confrontational manner will be no easy task and requires tact and strategic decision making.  Currently underway in federal court, the Chinese drywall litigation has already experienced some issues associated with participation by Chinese parties.

President Obama appointed the feisty 58 year-old Tenenbaum to the position in recent months, as part of an effort to renew and revitalize the agency after budget cuts were imposed by the Bush administration.  Why exactly the Bush administration cut budgets for a key agency is beyond speculation, however, it is important to focus on the future, and that is what it appears President Obama is doing.   Since appointment, she’s dealt with problematic toys, cribs, and now – Chinese drywall.  Tenenbaum has not been shy from the public light; appearing on talk shows, hearings, and news stations proves her tenacity to inform the nation of the issues important to American consumers.

PART II

Note: The Update Provided By the CPSC December 2009 Report will be summarized in a two-part article on thechinesedrywalllawyer.com

Part I

Part II

The update, which can be found in its entirety here – describes the newest developments regarding the ongoing Chinese drywall investigations.

Part I Recap:

In the first section, an overview of the report was provided.  In addition to the overview, a chronological assessment of relevant milestones was detailed.  This section will explore in more detail the additional sections of the report.

Coordination between Federal, State, and International Authorities

The CPSC, Environmental Protection Agency (EPA) inter alia, have been involved in the efforts investigating drywall toxicity cited in the thousands of reports.  The primary focus of investigations: Identification and Remediation.

Continued weekly meetings among agencies are scheduled to streamline coordination efforts.  The following is an excerpt directly from the report itself:

“We continue to have weekly coordination meetings with our agency partners, and are working with the Council on Environmental Quality and the Domestic Policy Council.  The CPSC is also continuing its dialogue with Chinese government officials, and conducted a staff-level video teleconference to exchange technical information about the efforts of CPSC and AQSIQ to find answers about drywall. Additionally, CPSC staff presented at a drywall town hall meeting hosted by Representative Cao in New Orleans, Louisiana.”

Investigation Progress

The investigations into the toxicity of drywall, and remediation options is ongoing.  Inquiries regarding U.S. firms as well as Chinese manufacturers are persisting.

Additional Blogger’s Commentary

The Chinese elephant in the room is here to stay; with the appropriate approach, the relationship between the U.S. and China should protect the forces which drive the system (the economic relationship between the two nations).  If consumer sentiment is degraded to a degree where goods made in China are no longer tolerable, there will be no winners.  In light of the Chinese drywall woes facing the U.S., it is time to address consumer protection, remedial measures, and redressability.  It is time for consumer advocates to insist upon a leveling of the playing field.  The CPSC is doing just this in their continued and coordinated investigations.

Part 1 of a 2 Part Series

Note: The Update Provided By the CPSC December 2009 Report will be summarized in a two-part article on thechinesedrywalllawyer.com

Part I

Part II

The update, which can be found in its entirety here – describes the newest developments regarding the ongoing Chinese drywall investigations.

In General:

As of December 22, 2009 the federal agency had received 2,360 reports related to drywall.  These reports derived from 35 states, including Washington D.C.  The widespread nature of the problem has prompted intensive investigations by various federal agencies.

According to the report, most complaints came from homeowners in Virginia, Louisiana, and Florida.  More than 9 reports out of every 10 came from one of these three states.  The hurricane reconstruction period is thought to have caused a large influx in imported Chinese drywall.

Highlights Included in the CPSC December Investigation Report:

December 9, 2009:

The CPSC hosted a videoconference session regarding the drywall problem with authorities within the Chinese government on December 9, 2009.  This meeting was a step in a positive direction; opening the doors to communication is critical in solving problems of such financial magnitude amicably.

December 14, 2009:

The CPSC and its representatives participated in a town hall panel in New Orleans on December 14, 2009, indicating its dedication to solving consumer issues by considering various solutions.

December 16, 2009:

The CPSC issued a “Notice of Inquiry.”  The notice was premised upon the attempt to comment on a proposal that would prescribe labels that identify drywall on December 16, 2009. (1)

Additionally, the CPSC corresponded with HUD staff, in order to assist such authorities in the development of grant programs for drywall affected consumers.

(1) The labels would be identified pursuant to Section 14(c), of the Consumer Product Safety Act (74 Fed. Reg. 66622).

The Consumer Product Safety Commission (CPSC) recently issued a press release indicating that based on a major study of over 50 homes, indoor air sampling tests pointed to a “strong association” between homes with Chinese drywall, hydrogen sulfide, and metal corrosion.

What this development means is that discussion and analysis aimed at promoting protocol procedures and remediation methods can be taken to the next level.  According to the November CPSC press release, the Interagency Drywall Task Force will assess differing methods of fixing and/or preventing problem drywall from causing such effects.  It should be noted that in addition to remediation efforts, inquiries into possible federal funding also are relevant in that homeowners often are placed in financial hardships upon discovering Chinese drywall (i.e., rental costs, remediation costs, and/or paying a 2^nd mortgage in some cases).

Hydrogen sulfide has been cited as the primary element causing copper and silver sulfide corrosion.  Additionally, formaldehyde and “other air contaminants” contributed to the finding of corrosion and drywall nexus.  From this point forward, the CPSC is determined to locate and identify all homes that are showing corrosion and health effects.  The CPSC is in the process of opening lines of communications with all U.S. governors to promote awareness.  Also of concern is that all problem homes are reported, as it is not efficient for reports to surface slowly.  Rather, the agency would prefer to hear from homeowners as soon as they become aware of the presence of Chinese drywall.  On a positive note, the Interagency Task Force believes that no new Chinese drywall was imported during the year of 2009.

The costs of the Chinese drywall crisis are more than meets the eye: Just how far will the economic ramifications cut into administrative budgets? The cost upon the Untied States throughout the current Chinese drywall crisis is laden with indirect costs aside from the more obvious remediation and litigation figures.  For example, the agencies heading the scientific investigations as a result of the 2000 + complaints reported from across the country have spent about $3.5 million on such studies. (CBS News).  That is not to say, however, that such a large amount of spending is unnecessary.  These studies are of utmost importance because consumer health is implicated, and these federal agencies are in place to carry out such tasks as needed.

The investigations, the tasks which were charged to the Consumer Product Safety Commission, Environmental Protection Agency, and Centers for Disease Control and Prevention, were initiated to establish a nexus between the reported damages stemming from 32 states.  The damages reported have been both health and property related.  Most complaints are alleging respiratory symptoms, headaches, and other like symptoms.  Property reports tend to be associated with sulfur-like odors in the home that make habitation unbearable, the corrosion of metals, and damages to piping and air conditioning units.

Of particular significance, the federal government stated that there was a “strong association” between Chinese drywall and corrosion of metals and alloys like wires, pipes, and air conditioning units.  Testing continues, and more reports are possible in the coming weeks or months.  A recent order issued by Judge Eldon Fallon, who is overseeing the multi-district litigation process in the Eastern District of L.A., requires homeowners with “Knauf” drywall to be identified by December 2, 2009.  Thus, homeowners who believe they may be affected have no time to waste if they want to meet the deadline.  Trials are set to begin as early as January, 2010.

In a report issued this past Thursday, Federal investigators made it clear that imported Chinese drywall contained levels of chemicals higher than those found in domestically produced products.  As we have reported in recent days, the report did not conclusively link the chemicals (sulfur and strontium) to the exact reported damages.

This result was expected by many, as this is just merely the first phase of testing.  The elevated chemical compounds that were found to be present may be the segway into the ensuing studies, that will examine more in-depth inquiries of health related concerns.  Luckily for homeowners and the public at large, the Federal agencies involved in the testing intend to do just that; to pursue testing further to determine the link between the thousands of reported Chinese drywall problems with the drywall itself.

The findings released Thursday, as mentioned above, are merely an aspect of a broader study currently being facilitated by the Consumer Product Safety Commission and the Environmental Protection Agency.  About 2,000 homeowners have complained to the CPSC with issues ranging from defective appliances (due to corrosion from the gasses emitted from the drywall) to health symptoms such as headaches and respiratory issues.

It is estimated that about seven million drywall sheets were used in Florida, Virginia, and Louisiana when hurricanes damaged homes in 2005 through 2007.  The New York Times reported that the director of division of health scientists at the product safety commission, stated “The first sets of data released today start to explain the differences between Chinese and non-Chinese drywall.”

A noteworthy aspect of the Thursday report was that hundreds of thousands of drywall sheets still are in the United States, laying in warehouses.  Why they have not been destroyed is perhaps a matter of waiting out the results.  The warehouses, however, have been put on notice according to the Federal officials, and have been instructed not to sell the drywall.