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November 21, 2018

4/16/2010
The Great Wall of Silence

Phreddie Phenol


Remember contaminated Chinese toothpaste?

Remember contaminated Chinese pet food?

Remember contaminated Chinese children's toys?

Nowadays, contaminated Chinese drywall containing "fly ash" is popping up across the Southeast United States.

Many Chinese companies use unrefined fly ash in their manufacturing process. Fly ash is a coal residue found in smokestacks of coal-fired power plants. This industrial by-product contains trace elements of heavy metals and strontium sulfide, a toxic substance commonly found in fireworks. In certain environments, the substance can produce hazardous and harmful gases.

A January 13, 2010 lawsuit filed by Louisiana Attorney General James D. Caldwell, claims corporate predators rushed in after Hurricane Katrina and used wallboards containing Chinese fly ash to repair storm-damaged homes.

The State of Louisiana's lawsuit names nearly two dozen defendants. Chief among them is Knauf International, the Germany-based building materials giant. Knauf operates three wallboard plants in China that the suit claims were the main sources of drywall imported into Gulf Coast states in 2006 and 2007. Knauf's North American operations are headquartered in Shelbyville, Indiana.

"Seeking to profit from the desperation of Louisianans harmed by Hurricane Katrina and Hurricane Rita, Knauf (USA) urged Interior Exterior Building Supply (a New Orleans building materials distributor) to purchase Chinese drywall from Knauf," the complaint states.  

The Attorney General alleges specific actions by Knauf and a related major building material corporation, United States Gypsum (USG), to push toxic drywall from China into the U.S. marketplace.  The complaint also describes the role of a Chinese government-run company, Beijing New Building Materials, which is the third largest wallboard company in the world.  

However, according to US Customs data, it appears that at least 78 percent of the drywall imported from China in 2006 came from Knauf's China operations.

The complaint states that Knauf's international offices "exercised strict control" over the three manufacturing plants in China, and coordinated shipments of the wallboard into the U.S. The shipments were imported by USG, in which Knauf "also held a substantial equity interest.

"In pursuit of profit, Defendants proactively pushed their defective Chinese drywall into Louisiana in massive quantities, knowing that domestic supplies were very low and that Louisiana desperately needed drywall to commence its rebuilding efforts.  Defendants' drywall is, and was, inherently defective and not suitable for its intended use. It is and was defective, noxious, and toxic, and will remain so for a long but unknown span of years."

The Attorney General alleges that under Knauf's control, the Chinese wallboard plants produced drywall made with fly ash, from coal-fired power plants - a material which is not used in wallboard manufactured in North America. This is a much different chemical composition than synthetic gypsum, which is a common substitute for natural (mined) gypsum in drywall.  

"The Defendants knew or should have known that their use of substandard materials and their shoddy manufacturing and inadequate or non-existent quality-control processes would result in defective, noxious, and toxic drywall which emits a variety of dangerous chemicals," alleges the Attorney General, including formaldehyde, hydrogen sulfide and carbonyl sulfide.

Knauf's U.S. operations, and US Gypsum, have tried to distance themselves from the scandal. In March 2009, responding to the use of toxic drywall in Florida, Knauf Insulation North America issued a press release, saying that it needed to "set the record straight." Bob Claxton, who was Knauf Insulation CEO at the time, noted the reports about drywall used in Florida.  "Unfortunately, many of the reports identify 'Knauf' rather than Knauf Plasterboard Tianjin as one of the sources of the products imported from China. This has led to confusion in the marketplace... Knauf Insulation is a business unit that operates independently from any other Knauf business, including Knauf Plasterboard Tianjin. Knauf Insulation in North America and our products are not associated with the drywall in question."   

However, Knauf Insulation GmbH and Knauf (USA) are now defendants in the State of Louisiana lawsuit.

While corporations deny responsibility, thousands of homeowners are dealing with the health issues and huge costs associated with remediation. The U.S. Consumer Product Safety Commission has advised consumers to remove all possible problem drywall from their homes, and to replace electrical components, wiring, gas service piping, fire suppression sprinkler systems, smoke alarms and carbon monoxide alarms. Steps that are intended to help eliminate both the

source of the problem drywall and corrosion-damaged components that might cause a safety problem in the home.  

Attorney General Caldwell's suit alleges the State of Louisiana has suffered the loss of expected taxes and other revenues as well as costs related to remediation and disposal of contaminated drywall. The AG noted that the lawsuit was not filed to pursue private claims of homeowners. He suggested individual homeowners should contact a private attorney if they believe they have Chinese drywall in their home. Caldwell concluded, "those rebuilt homes are essentially worthless and uninhabitable unless they are remediated again.... the Defendants have been unjustly enriched."  

Meanwhile, thousands of homeowners have been unjustly sickened. Many Gulf Coast residents have complained of various health problems, including difficulty breathing, asthma attacks, respiratory problems, recurring headaches, heart disease, irritated, itchy skin and other allergic reactions.

As a result, the State of Louisiana's lawsuit is merely the latest in a virtual blizzard of litigation. A large class action complaint was filed in a Louisiana federal court on December 9, 2009. It is being brought by approximately 2,100 individual residents of Alabama, Florida, Virginia, Louisiana and Mississippi and is being represented by a number of firms.

New Orleans Saints Coach Sean Payton is the lead plaintiff in the 591-page lawsuit against Knauf Plasterboard Tainjin Co. Ltd. The suit is on behalf of homeowners with drywall manufactured by that particular company. Payton was selected as the lead plaintiff because he was among the first people in Louisiana to link bad drywall to electronic and electrical equipment failing in his home and with his family becoming ill. He subsequently moved his family out of the house and had it systematically dismantled, taking photographic evidence along the way. Damaged components are stored in a warehouse.

The national litigation over Chinese drywall is taking place in New Orleans. A series of test cases will sift through questions and help attorneys assign values to the damage. It also allows lawyers to clarify issues in the litigation without having to go to a full trial of all 2,100 situations.

Last week, a federal judge in New Orleans ruled in favor of seven Virginia families and awarded $2.6 million in damages for homes ruined by Chinese drywall. The decision is likely to affect how lawsuits by thousands of other U.S. homeowners are settled.

Defective drywall is believed to be causing problems in homes in as many as 32 states. Estimates have ranged as high as 100,000 households affected nationwide with up to 7,000 of those in Louisiana. So far, about 2,500 individuals have registered problems with the U.S. Consumer Product Safety Commission.



Reader Comments

Posted: Saturday, April 17, 2010
Article comment by: Phenol Phan

Great to see the return of Phreddie.

Those cartoons back in the day - along with good reporting by The Shelbyville News (can you imagine?) got our toxic water system cleaned up.

Welcome back, Phreddie!


Posted: Saturday, April 17, 2010
Article comment by: Jim L

Knuaf will probably end up filing bankruptcy and closing all of their plants before the other victims have their day in court. Then they will do the corporate thing and reopen for business under another name. That way none of the management people will lose their bonuses and the business never feel the hit.

It's shady but seems to be the new American way. This seems like a case for Erin Brockovich!


Posted: Friday, April 16, 2010
Article comment by: susan jagielko

A favorite or ours is "project censored" edited by Peter Phillips of Sonoma St. University.

Posted: Friday, April 16, 2010
Article comment by: Skunk

Great report, Dee.

So what IS coming out of those smokestacks here in town?

Obviously, they're not concerned about the health of anyone.




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