Chinese-Made Drywall: Another Litigation Risk?

Posted on August 6, 2009 by Ron Pollock

  Builders, developers, sub-contractors, shipping companies and suppliers, importers, distributors, architects and others may potentially be impacted if litigation in this area becomes prevalent in the Northeast, as the Gulf Coast is already seeing mass tort litigation forming. In particular, it is important to review insurance policies early to ascertain whether coverage is provided in the event of a claim. Further, we recommend checking your supply chain to identify drywall sources, handling and documentation and preserve any documents involved.

 There has been a great deal of discussion recently with respect to property damage and personal injury claims arising from Chinese-made drywall, which is alleged to have contamination issues causing property and personal injury damages. While the science behind this remains murky, the problem may be particularly significant as statistics show that there are approximately 600 million pounds of Chinese-made drywall in at least 60,000 homes in the U.S.A. today. Commercial applications can also be involved.

According to an April 17th article in the Wall Street Journal, “Complaints about foul smelling Chinese-made drywall that first emerged in a few dozen homes in Florida in January have spread to hundreds of homes in several states.” As we saw with mold and synthetic stucco, the science surrounding Chinese-made drywall is still being developed. CNN reported in March that the drywall is alleged to have high levels of sulfur, and that the material emits sulfur-based gases that smell of rotten eggs and corrode piping and wiring, causing electronics and appliances to fail. At this point, the Gulf Coast has been in the forefront of these claims as high temperatures and humidity are purportedly primary triggers of problems resulting from the Chinese-made drywall. The United States Consumer Products Safety Commission has posted an internet alert on Chinese drywall, noting that it has received 1,174 reports from residents in 24 states who believe their health symptoms or the corrosion of certain metal components in their homes are related to the presence of drywall produced in China. Consumers largely report that their homes were built in 2006 to 2007. recommend checking your supply chain to identify drywall sources, handling and documentation and preserve any documents involved.

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GARA Resists Another Challenge To Diminish Statute Of Repose

Posted on August 6, 2009 by Bob Dennison

 A unanimous en banc panel of the Pennsylvania Superior Court has held the issuance of Service Bulletins does not toll or restart the clock for calculating the statute of repose found in the federal General Aviation Revitalization Act of 1994.  In Moyer v. Teledyne Continental Motors Inc., No. 1402 EDA 2007, 2009 WL 1929328 (Pa. Super. July 7, 2009). Appellants (Plaintiffs), relying on Caldwell v. Enstron Helicopter Corp., 230 F.3d 1155 (9th Cir. 2005) that held flight manuals could be considered a new part or defective system sufficient to restart the clock, sought a similar ruling from the Court that would treat frequently issued Service Bulletins in the same manner as instruction manuals in an effort to circumvent the 18 year statute of repose. 

The Superior Court, however, finding support in a 2009 Washington Court of Appeals matter captioned, Burton v. Twin Commander Aircraft, 148 Wash. App. 606 (Wash. Ct. App. Feb. 9, 2009) that held maintenance manuals are not to be considered a “part of an aircraft” extended the Burton ruling to Service Bulletins.  The Moyer Court held Service Bulletins are distinguishable from instruction manuals, in part, because in the Caldwell case, it was the manual itself that was defective for failing to supply critical information to the operator, whereas in the Moyer case it was the aircraft part/component that was defective-not the Service Bulletin.  The Court determined that a Service Bulletin is more analogous to a repair/maintenance manual used by mechanics for purposes of troubleshooting, repair and maintenance of an aircraft. 

Rejecting Appellant’s assertions that Congress considered and intended to include the re-issuance of Service Bulletins to re-trigger the statute of repose, the Moyer Court held, instead, that frequency upon which Service Bulletins are issued would, to the contrary, frustrate and erode the intent of the Act if the issuance of Service Bulletins could be used to restart the clock. 

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