Louisiana AG Sues Chinese Drywall Manufacturers and Distributors

January 14, 2010

Louisiana Attorney General Buddy Caldwell filed suit in Orleans Parish against multiple Knauf entities, other international and domestic manufacturers, distributors, importers of alleged toxic Chinese drywall. Several builders were also named in the lawsuit.

Caldwell’s lawsuit alleges the State of Louisiana has and will continue to suffer economic loss because of the defendants’ manufacture, distribution, sale and/or installation of defective and toxic Chinese drywall, according to an announcement released by the AG’s office.

The Louisiana AG’s lawsuit follows closely a private sector lawsuit against 14 insurance companies over claims related to Chinese drywall. On Jan. 6, the WCI Chinese Drywall Trust, an entity formed in bankruptcy proceedings of residential homebuilder WCI Communities Inc., announced it had filed suit against the insurers seeking indemnification for losses arising from claims related to the allegedly defective Chinese manufactured drywall.

Since 2005, more than 1.1 million sheets of the defendant’s drywall has been imported through the Port of New Orleans. It was used in the construction, repair, or rebuilding of Louisiana homes and buildings after Hurricanes Katrina and Rita, as well as in new construction.

The lawsuit was filed on behalf of the State and its political subdivisions to recover damages they have suffered and will continue to suffer as a result of the toxic Chinese drywall that flooded the Louisiana market. It alleges the State of Louisiana has suffered the loss of expected state income tax, sales tax, property tax and other revenues caused by the negative impact of Chinese drywall; cost related to remediation and disposal of contaminated drywall and by-products; and other damages directly related to the State of Louisiana.

It is believed the drywall off-gasses harmful chemicals that cause various health problems. The most frequent health complaints are difficulty breathing, asthma attacks, respiratory problems, coughing, recurring headaches, heart disease, neuron-behavioral problems, sore throats, throat infection, eye irritation, irritated and itchy skin, bloody noses, runny noses, allergic reactions, and sinus infections.

The suit alleges that the corrosive effects of the drywall on wiring and household appliances, creates potential fire hazards in two different ways. First, the corrosion of electrical wiring in electrical equipment and gas lines can result in electrical or gas fires. Second, the corrosive effects damage the wiring in smoke detectors, fire alarms, and sprinkler systems causing them to malfunction, preventing the ability of life-saving devices to properly function in cases of fire, the AG’s suit alleges.

According to Caldwell’s announcement, the suit was not filed to pursue private claims of homeowners who renovated after Katrina with Chinese drywall. Individual homeowners are encouraged to contact a private attorney of their choice should they believe they have Chinese drywall in their home, the AG’s office said.

Source: Louisiana Attorney General’s Office, www.ag.louisiana.gov

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