2009 Chinese drywall controversy

The 2009 Chinese drywall controversy is a health and safety issue involving defective drywall manufactured in China and imported by the United States starting in 2001. Laboratory tests of samples for volatile chemicals have identified emissions of the sulfurous gases carbon disulfide, carbonyl sulfide, and hydrogen sulfide. These emissions, which have the odor of rotten eggs, worsen as temperature and humidity rise and cause copper surfaces to turn black and powdery, a chemical process indicative of reaction with hydrogen sulfide. Copper pipes, wiring, and air conditioner coils are affected, as well as silver jewelry. Homeowners have reported a variety of symptoms, including respiratory problems such as asthma attacks, chronic coughing and difficulty breathing, as well as chronic headaches and sinus issues.^[1][2][3]

The copper coils on this air conditioner unit are blackened and corroded.

Background

Drywall is a common building material typically made of a layer of gypsum-based plaster pressed between two thick sheets of paper, then dried in a kiln. Foreign drywall was imported by the United States during the construction boom between 2004 and 2007. Importation was further spurred by a shortage of American-made drywall due to the rebuilding demand of nine hurricanes that hit Florida from 2004 to 2005, and widespread damage caused along the Gulf Coast by Hurricane Katrina in 2005. An analysis covering drywall imports since January 2006 showed that more than 550 million pounds of Chinese drywall was brought into the United States since then, enough to build 60,000 average-sized homes.^[4]

The green and red coloration in these copper components is an indicator that they were subject to typical corrosion, and not as a result of hydrogen sulfide emitted from contaminated imported drywall.^[5]

Homeowners alleging that they installed contaminated drywall have reported numerous incidents of corroding copper and other metals in their homes. The Florida Department of Health advised homeowners worried about tainted drywall to check copper tubing coils located in air conditioning and refrigeration units for signs of corrosion caused by hydrogen sulfide, as these are usually the first signs of the issue. Under normal circumstances, copper corrosion leaves it a blue/green or dark red color, whereas corrosion as a result of hydrogen sulfide exposure leaves a black ash-like corrosion. Homeowners who have verified that their home contains contaminated Chinese drywall are advised to replace any suspect drywall, as well as any potentially damaged copper electrical wiring, fire alarm systems, copper piping, and gas piping.^[5]

Affected locales

In the United States, most complaints have come from states in the Southeast, where a warm and humid climate seems to encourage the emissions.^[6] The states of Florida (59%), Louisiana (20%), Mississippi (6%) and Alabama (5%) made up 90% of the 3,082 cases reported to the U.S. Consumer Product Safety Commission (CPSC) as of April 2, 2010.^[7] More than 700 complaints had been filed with the Florida Department of Health.^[8][9] Sources estimated that from 60,000 to 100,000 homes could be affected.^[10][11]

Sources

Knauf Plasterboard Tianjin Co. Ltd., part of Knauf Gips KG is the company named as a major producer of imported Chinese drywall. While a number other Chinese companies are suspected of producing defective drywall, Knauf's name comes up most consistently, as the company prints its name on its products. Much of the other contaminated drywall has no markings, making identifying its origin difficult.^[12][13]

Dramatic increases in new home construction, coupled with the reconstruction effort after hurricane damage led to a soaring increase in the quantity of imported Chinese drywall. Time magazine reports that more than 550 million pounds of drywall has been imported from China since 2006, including much from the known principal manufacturer of the contaminated drywall, Knauf. However, domestic drywall manufacturing averages over 15 million tons per year, leaving imported Chinese drywall with only a small portion of the market. It is estimated that this imported drywall has been used to construct approximately 60,000 homes.^[14]

From January to September 2006, 52 million pounds of Knauf drywall were unloaded in New Orleans, three-quarters of it from Knauf Tianjin, and at least 37 million pounds of Knauf drywall was shipped directly from China to Florida ports.^[4]

Drywall usually has a source printed on the back. Chinese drywall may be marked "Made in China", "China", "Knauf Tianjin", or have no marking at all. A home may have been built with drywall from several sources, American and imported.^[15]

In April 2009, home improvement stores The Home Depot and Lowe's confirmed from their suppliers that no drywall sold in their stores was imported from China.

On November 23, 2009, CBS News reported that they had done a drywall study to compare American and Chinese drywall. Random samples of new American-made drywall in six U.S. cities, new Chinese-made drywall from China, and samples of drywall from five damaged U.S. homes were collected and sent to the University of Florida to be tested by a team of researchers led by professor Tim Townsend, a scientist and leading expert on the effects of drywall on the environment. The report results stated:

"As expected, the contaminated Chinese samples gave off high levels of sulfur gases. But all but one of the U.S. samples emitted sulfur gases, as well - not at levels as high as the defective Chinese product, but unexpected. Perhaps more surprising, "There were some American products that we tested that had higher emission than some of the new Chinese products that we tested."^[16]

Federal inquiries

Discussions began in January 2009 between the U.S. Consumer Product Safety Commission (CPSC), the U.S. Environmental Protection Agency (EPA) and Florida officials. In February 2009, U.S. Senator Bill Nelson of Florida sent a letter to the U.S. Consumer Product Safety Commission and the EPA, asking them to jointly investigate whether the Chinese drywall is toxic, and to determine the extent of potential damage to homes. The Consumer Product Safety Commission launched a formal investigation.^[17]

In March 2009, as concerns about the defective drywall grew, Senator Nelson of Florida and Senator Mary Landrieu of Louisiana jointly introduced a resolution and bill urging the Consumer Product Safety Commission to recall Chinese-made drywall and temporarily ban its import.^[18]

In May 2009, the U. S. House of Representatives passed an amendment to the Mortgage Reform and Predatory Lending Act, HR 1728, that would require the Department of Housing and Urban Development (HUD) to study the effects of tainted Chinese drywall on foreclosures and the availability of property insurance.^[19]

In November 2009, the CPSC reported on an indoor air study comparing 41 "complaint" homes in five states with 10 control homes built around the same time. The report found a "strong association" between the imported drywall and levels of hydrogen sulfide gas and metal corrosion in the complaint homes.^[20]

Potential causes

Lab comparisons of Chinese- and American-made drywall show significantly higher levels of pyrite in the Chinese material. This suggests that pyrite oxidation may be the source of the sulfur compounds released by Chinese drywall.^[21]

The problems have been attributed to the use of fly ash in the drywall, which degrades in the presence of heat and moisture; although United States' drywall uses fly ash as well, the process used creates a cleaner final product.^[22]

According to a 2010 laboratory study, one hundred percent of affected drywall samples obtained from homes located in the southeastern United States tested positive for the presence of Thiobacillus ferrooxidans, an iron and sulfur reducing bacterium. Samples of non-contaminated drywall were found to contain only minuscule levels of T. ferroxidans.^[23]

Potential Health Concerns

There are few studies exploring the effects of long-term low-level exposure to sulfur gases. However, it is believed that short-term exposure, over the period of a few hours, can result in sore throat, eye irritation, cough, shortness of breath, chest pain, and nausea. Long term exposure, over a period of weeks, is believed to cause chronic fatigue, insomnia, loss of appetite, dizziness, irritability, headaches, and memory loss.

The Center for Disease Control, in collaboration with The Agency for Toxic Substances and Disease Registry released a guide indicating the residents of affected homes reported irritated and itchy eyes and skin, difficulty breathing, persistent cough, bloody noses, runny noses, recurrent headaches, sinus infection, and asthma attacks.^[3]

Scam warnings

The Florida Attorney General's office has warned of several deceptive practices targeted at homeowners, including bogus test kits, home inspection offers, ozone generators and chemical cleaners. The warnings point out that the presence of defective drywall cannot be determined by testing a home's air, or corrected by chemical sprays or ozone generators.^[24]

More recently, news reports have pointed out "convicted scammers, thieves and uncertified workers who illegally pose as licensed contractors" and profit from homeowner confusion and panic. The Palm Beach Post found that of 47 remediation and inspection companies checked, 26 were created since January 2009, and only 18 of the 47 were run by licensed contractors. In Florida, lack of legal regulation allows anyone to "remediate" drywall problems, regardless of training or professional qualifications. The most recent job of one company's owner was operating an Asian Brides website.^[25]

Lawsuits

Class action lawsuits claiming respiratory problems and headaches have been filed by Florida homeowners against home builders, drywall suppliers, and a Chinese drywall manufacturer.^[26]

In October 2010, New Orleans US District judge Eldon Fallon endorsed a settlement in which Knauf Group will pay for the repair of 300 homes of the 3,000 involved in one particular case.^[27] Several insurance companies are participating in the agreement. The homes are in Alabama, Florida, Louisiana and Mississippi, but no Texas and Virginia homes are affected by the agreement.^[27]

Home supply retailer Lowe’s has denied claims that they have sold contaminated drywall imported from China. Numerous class action lawsuits were brought before the company, and as of October 28, 2010 Lowe’s has agreed to a settlement that may award victims up to $100,000 for damages caused by contaminated drywall purchased at their stores. Lowe’s released a statement saying,

"Lowe's entered into this agreement as part of our commitment to serving our customers, not because such a step is or has been required by law, or because drywall purchased from Lowe's has been proven deficient in any way." ^[28]

Insurance coverage and Tax Deductions

Controversy has arisen over whether the damage will be covered under the insurance policies for home insurance or general liability insurance. In March 2010, a New Orleans judge ruled that the damage was covered under a home insurance policy.^[29] It is unknown whether the general liability insurance will cover the claims. The standard policy contained an exception to an exclusion for pollution which allowed coverage if the pollution came from the products of the insured, but insurers had revised the policies to incorporate a "total pollution exclusion" which has no exception. Even without a total pollution exclusion, around 2005 insurers began inserting another provision to deny construction defect claims.^[30] Whether or not insurance coverage will be granted generally depends state law and a state court's interpretation, but in this case may be determined for multiple states under the Louisiana multiple district litigation (MDL) overseen by a federal court.^[31]

On September 30, 2010, the Internal Revenue Service announced it would provide tax relief for homeowners affected by property damage caused by imported Chinese drywall. The IRS has categorized the copper corrosion from the sulfur gasses emitted by the imported drywall as “casualty loss”, and is in a similar category to property damage after a catastrophic event, such as a hurricane. However, homeowners can only claim a deduction after repairing the affected area(s), and much controversy has arisen because of the great out-of-pocket expense to affected homeowners.^[32][33]

Radioactivity concerns

Early reporting raised concerns about the presence of phosphogypsum, gypsum formed as a by-product of processing phosphate ore into fertilizer with sulfuric acid. Phosphogypsum is radioactive due to the presence of naturally occurring uranium and radium in the phosphate ore. The substance has been banned for use in U.S construction since 1989.^[34] Tests of drywall samples by the EPA and the Florida Department of Health showed some radioactivity, but at levels no higher than those ordinarily found in the natural environment.^[35]

References

1. ^ Wallboard Woes: Odors and corrosion raise concern over drywall imported from China, Chemical & Engineering News
2. ^ 'Cheap' Chinese drywall is proving costly, Fort Worth Star-Telegram
3. ^ ^{a b} Imported Drywall and Health - A Guide for Healthcare Providers, Center for Disease Control
4. ^ ^{a b} Drywall problems may just be beginning, Sarasota Herald-Tribune
5. ^ ^{a b} Case Definition for Drywall Associated Corrosion in Residences, Florida Department of Health
6. ^ Jason Hanna (March 24, 2009). "Florida: Drywall has material that can emit corrosive gas". CNN. http://www.cnn.com/2009/US/03/24/chinese.drywall/. Retrieved 2009-04-12. 
7. ^ Where has problem drywall been reported?, Consumer Product Safety Commission
8. ^ Fla. man wonders if dad's death linked to toxic Chinese drywall, Scripps Howard News Service
9. ^ ALLISON ROSS (March 11, 2009). "Businesses emerge to deal with Chinese-made drywall". Palm Beach Post. http://www.palmbeachpost.com/news/content/business/epaper/2009/03/11/a6b_drybiz_0312.html?cxtype=rss&cxsvc=7&cxcat=6. 
10. ^ Wayne, Leslie (October 7, 2009). "Thousands of Homeowners Cite Drywall for Ills". The New York Times. http://www.nytimes.com/2009/10/08/business/08drywall.html?_r=1&pagewanted=all. 
11. ^ Associated Press (April 11, 2009). "Chinese Drywall Poses Potential Risks to American Homeowners, Apartment Dwellers". Fox News. http://www.foxnews.com/story/0,2933,514636,00.html. Retrieved 2009-05-17. 
12. ^ “Plasterboard Construction” Knauf Drywall
13. ^ “Chinese Drywall Markings: Photographic Examples” Eastern District court of Louisiana
14. ^ Pagget, Tim “Is Drywall the Next Chinese Import Scandal? ” Time Magazine
15. ^ Step-by-Step Self-Assessment Guide for signs that a home may be affected by drywall imported from China, Florida Department of Health
16. ^ Homeowners Charge U.S. Made Toxic Drywall
17. ^ U.S. agency sets drywall inquiry, Sarasota Herald-Tribune
18. ^ Sens. Nelson, Landrieu call for recall, temporary ban on Chinese drywall imports, Palm Beach Post
19. ^ House to probe drywall fallout, Bradenton Herald
20. ^ Press Statement on Corrosion in Homes and Connections to Chinese Drywall, Consumer Product Safety Commission
21. ^ William Angelo, A Material Odor Mystery Over Foul-Smelling Drywall, from the web site of Engineering News Record Construction, dated 1/28/2009.
22. ^ Swiss Re. Imported Drywall: Exposures, Claims and Defenses in the United States. Insurance Information Institute.
23. ^ Hooper, et al. Isolation of Sulfur Reducing and Oxidizing Bacteria Found in Contaminated Drywall. International Journal of Molecular Sciences.
24. ^ AG warns of Chinese drywall scams
25. ^ Tainted Drywall dangers: Thieves, scammers among 'experts’ offering a fix to desperate homeowners, Palm Beach Post, July 24, 2010
26. ^ Consumers warned of drywall repair scams, Miami Herald
27. ^ ^{a b} Chinese Drywall Accord to Repair Damaged Homes Wins U.S. Judge's Approval. Bloomberg.
28. ^ Stinky Settlement: Lowe's to Pay $6.5M to Settle Claims Over Smelly Drywall , Fulton County Daily Report
29. ^ Mowbray R. (2010). Orleans judge says policy exclusions used to deny Chinese drywall insurance claims don't apply. The Times-Picayune.
30. ^ Sadler J. (2009). Chinese Drywall: Builders and Subs Face Huge Uninsured Losses. Claims Journal.
31. ^ Chinese Drywall Update: Builders Burdened by Repair Costs. Coastal Contractor.
32. ^ "IRS Provides Relief for Homeowners with Corrosive Drywall." . 'Internal Revenue Service .
33. ^ IRS Now Allowing Drywall Deduction, Daily Press, Oct 1, 2010
34. ^ Corrosive, stinking Chinese drywall may be radioactive, Los Angeles Times, July 4, 2009
35. ^ Chinese drywall poses no radioactive threat, Bradenton Herald, August 22, 2009

External links

• Step-by-Step Self-Assessment Guide for signs that a home may be affected by drywall imported from China, Florida Department of Health
• Isolation of Sulfur Reducing and Oxidizing Bacteria Found in Contaminated Drywall, International Journal of Molecular Sciences
• Lowe's Drywall Settlement