Chinese drywall maker appeals federal judge's ruling

A Chinese manufacturer that shipped more than 150,000 sheets of drywall to a local supplier has appealed a federal court decision awarding $2.6 million in damages to local homeowners.

Taishan Gypsum Co. Ltd.'s filing on Thursday marks the first time that the company owned by the Chinese government has responded to any lawsuit filed against it in the United States.

In April, U.S. District Judge Eldon E. Fallon in New Orleans ruled that all drywall in the homes should be removed, along with all items that have suffered corrosion as a result of the drywall and anything damaged in the process of removal.

The judge awarded damages to seven Hampton Roads homeowners whose properties were built with Chinese-made drywall. Attorneys had selected seven homes in Virginia - one in Virginia Beach, two in Newport News and four in Williamsburg - to serve as a cross-section of homes affected by the drywall across the country.

Because Taishan did not respond to lawsuits, Fallon entered a default judgment against the company last fall. The company's appeal and notice of appearance this week renewed hope that the company eventually might pay damages to homeowners.

"We consider it an extremely positive development that they're showing up," said Richard Serpe, a Norfolk attorney who represents the local homeowners. "I personally think that it means that they're here to not only engage in the legal process but to also work toward a resolution."

However, the company's late arrival on the scene complicates matters, Serpe said.

"I don't think it's a coincidence that the appeal occurs on the last possible day that they could have filed an appeal for the judgment," he said.

Serpe said the judge was preparing to make the ruling final and allow the homeowners to begin trying to collect damages. That appears to be on hold for now.

A New Orleans-based attorney for Taishan was unavailable for comment Friday.

When supplies of U.S.-made drywall became scarce in 2005 during the building boom, now-defunct Norfolk construction supplier Venture Supply Inc. imported enough Taishan-made drywall to build more than 300 homes. The drywall has since has been found in scores of homes across the region.

In the fall, the U.S. Consumer Product Safety Commission found that the wallboard emits higher levels of volatile sulfur gases than typical U.S.-made drywall and is likely causing metal corrosion in homes. Homeowners claim the product also causes respiratory illness.

The commission later recommended that homeowners rip out the problem wallboard, electrical wiring and natural gas piping.

The judge's ruling went further, stating that all drywall should be removed, along with appliances, carpet and hardwood flooring, cabinets and trim. Fallon said in his ruling that it is neither cost-effective nor scientifically possible to remove just the tainted wallboard in a home where both domestic and Chinese drywall was used.

The damages Fallon awarded also took into account the expense of relocating while remediation work is being done, as well as other expenses caused by the drywall, such as bankruptcy or foreclosure.

Taishan's appeal, filed in New Orleans late Thursday, contained little information on how the company planned to appeal judge's decision.

Josh Brown, (757) 446-2318, josh.brown@pilotonline.com