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State’s Chinese Drywall litigation remains ongoing

State’s Chinese Drywall litigation remains ongoing
Thursday, December 15, 2011 - 12:51pm

Louisiana Attorney General Buddy Caldwell says the Chinese drywall settlement announced today does not cover separate claims made by the state, adding that he intends to actively pursue and hold German company Knauf accountable for its bad faith efforts, including failure to notify consumers of the defective drywall.

“Hurricane Katrina was a natural disaster, but the bad faith actions of Knauf were entirely man-made and victimized citizens yet another time,” Attorney General Caldwell said. “We intend to fully pursue claims on behalf of Louisiana’s taxpayers for the losses in tax revenue and property value.”

Caldwell noted that today’s settlement would benefit homeowners from Louisiana and other states. “We’ve been a force, but the case is ongoing,” he said.

Last year Attorney General Buddy Caldwell filed suit on behalf of the state against Knauf and other defendants who manufactured, distributed, sold, and installed defective and toxic drywall in Louisiana during the rebuilding efforts following Hurricanes Katrina and Rita. Research has shown that the defective drywall emits sulfur and sulfur compounds, which are especially high during hot and humid weather—a condition that is prevalent in Louisiana. Those sulfur compounds were also found to corrode the copper and silver used in home air conditioning vents, copper outlets, and wiring and silver contacts in electronic equipment.

“Our investigation has shown that the bulk of Chinese drywall entering Louisiana was manufactured by the Knauf entities, whose parent companies are based in Germany,” said Caldwell. “The state’s lawsuit seeks penalties and recovery for damages, losses, and injuries. As part of the discovery process, our attorneys have participated in depositions in New Orleans, New York, Frankfurt, London, and Hong Kong.”

Caldwell said he is monitoring a pilot remediation program expected to remediate approximately 300 homes in Louisiana, Alabama, Mississippi, and Florida at no cost to the homeowners. In Louisiana, about 109 homes located primarily in the parishes of St. Tammany, Ascension, East Baton Rouge, and Orleans are included in the pilot program. Many of the homes in Louisiana have already been completed.

Preliminary settlements with drywall suppliers Interior/Exterior Building Supply Ltd and Banner Supply Co.--two of the main distributors of Knauf drywall—have been approved with hearings set for early February. Caldwell reports that the discovery process is progressing against the entities controlled by the Chinese government, with additional depositions scheduled for January in Hong Kong.

Caldwell has continued to work closely with the U.S. Consumer Product Safety Commission (CPSC). In September, he notified Louisiana residents with problem drywall of the updated remediation guidance provided by the CPSC and the U.S. Department of Housing and Urban Development (HUD). A complete list of those guidelines can be found on the CPSC website at www.DrywallResponse.gov.

Caldwell urges additional homeowners who believe they may have defective drywall to come forward and call the Louisiana Attorney General’s Consumer Protection Hotline at 1-800-351-4889 or visit www.agbuddycaldwell.com.
 

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