Product Liability

Trials to proceed against unresponsive Chinese drywall company

Chinese drywall manufacturer Taishan Gypsum Co. Ltd., the company accused of producing and then exporting toxic, sulfuric wallboard to the United States, was found to be in default during a preliminary trial in New Orleans after it failed to respond to a lawsuit filed by an Alabama home builder in June. The Mobile-based Mitchell Company, a builder of residential and commercial properties, alleges it used Taishan’s toxic drywall extensively in its homes. The company filed a motion earlier this month asking the court for a default judgment against the company.

U.S. District Judge Eldon Fallon told the Mitchell Company that he would issue a preliminary default judgment against Taishan if it did not file an appearance by September 24. “I will set it for a hearing, you can present any evidence and I’ll issue a judgment, a monetary judgment on that,” Fallon told an attorney for The Mitchell Co. The judgment allows the trial to proceed without a defense.

Taishan and other Chinese drywall manufacturers face more than 150 lawsuits from individuals and companies who allege the wallboard emits sulfuric gases and causes respiratory distress, nose bleeds, headaches, and other health problems in addition to corroding air conditioning components and electrical wiring, all of which caused property values to plummet.

7.5 million pounds or more of Taishan drywall entered the United States through Florida and New York ports during the building boom of 2006-2007, according to shipping records. Most of the drywall ended up in Florida homes.

The American Association for Justice hopes to make it easier for Americans to hold foreign companies accountable for negligence and personal injury caused by their products. The association has advocated for passage of the 2009 Foreign Manufacturers Legal Accountability Act, which would mitigate the ability of foreign companies to export defective and harmful products to the U.S. with impunity. The bill is currently pending in a Senate committee.

“Taishan Gypsum profited from a product they sold here in the U.S. that has now proven to be defective, costing millions of dollars in damage, decreased property values and countless health problems. The ruling today shows the company has turned their back, hoping U.S. consumers, home builders and insurance companies will pick up their tab,” AAJ President Anthony Tarricone said in a statement.

Taishan Gypsum is operated by the Chinese government.