A Chinese drywall manufacturer must answer to U.S. courts for defective drywall sold for use in American homes, as a result of rulings in two separate cases. Each judge in those cases rejected arguments by Taishan Gypsum Co., the world’s largest drywall manufacturer, and its wholly-owned subsidiary, that U.S. courts lacked personal jurisdiction.
The judges ruled in the two cases that a Chinese drywall manufacturer will answer to U.S. courts for the defective plasterboard it sold for use in thousands of American homes. Each decision rejected arguments by Taishan Gypsum Co. (TG), the world’s largest drywall manufacturer, and its wholly-owned subsidiary, Taian Taishan Plasterboard Co. (TTP), that U.S. courts lacked personal jurisdiction. The state and federal judges also denied motions to vacate default judgments imposed for the Defendants’ failure to respond to the complaints that were filed against them.
United States District Judge Eldon Fallon of the Eastern District of Louisiana oversees four class actions involving millions of square feet of Chinese gypsum wallboard that were exported to the U.S. from 2005 to 2008, primarily for use in building homes on the eastern seaboard and the Gulf Coast. Judge Fallon, an experienced and well-respected jurist, made this finding in his order:
After installation of this drywall, owners and occupants of the properties began noticing unusual odors, blackening of silver and copper items and components, and the failure of appliances, including microwaves, refrigerators, and air conditioning units.
The state court ruling came in a Florida case in which a home builder sought to recoup the cost of repairing homes constructed with drywall that, according to the complaint, emitted foul odors and caused health problems for occupants. Circuit Judge Joseph Farina, in Miami-Dade County, ruled that TG and TTP “had sufficient business dealings and contact in Florida to satisfy the exercise of jurisdiction.” Observing that TG and TTP were “intertwined at the level of daily operations,” Judge Farina ruled that the companies were within the reach of Florida’s long-arm statute because they “actively courted” customers in Florida by inviting Florida business representatives to visit TG’s drywall factory in China, entering into distribution agreements with Florida companies through TTP to sell its products for home construction, and shipping drywall to those companies “with full knowledge of Florida as the ultimate destination.” (Lennar Homes v. Knauf Gips KG, No. 09-07901 (Fla., Miami-Dade Co. Cir. Aug. 31, 2012).)
Judge Farina similarly dismissed the arguments by the company that TG reasonably believed that Florida courts had no jurisdiction, as well as its claim that “it lacked sufficient mastery of the English language” to fully understand the legal documents. This defense seems frivolous, considering that Taishan Gypsum and its subsidiary were conversant enough in English to get their products to market in America.
Some occupants experienced health problems including skin and eye irritation, respiratory issues, nosebleeds, and headaches. These two judges served victims well by holding both companies to account for the great financial injury and emotional hardship they caused in the states.
Source: American Association for Justice
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