Letter To The Honorable Craig Fugate, Administrator, Federal Emergency Management Agency
Lawmakers Seek Help For Homeowners Hard Hit By Drywall Disaster
While federal authorities investigate the harmful effects of imported Chinese drywall on homeowners around the country, four U.S. senators want the emergency management agency to help displaced homeowners with rental and other emergency assistance like that provided people after a major storm or natural disaster.
In this case, the disaster is sulphur-laced drywall brought here from China during the U.S. housing boom and also to meet the rebuilding demands after Hurricane Katrina and other big storms hit the coast of the Gulf of Mexico in 2004 and 2005.
Enough of the tainted material was imported to build an estimated 60,000 to 100,000 homes, with much of it going to Florida, Louisiana and Virginia. In the past two years alone, homeowners there and elsewhere across the country have reported metal corrosion, noxious fumes and health concerns.
Symptoms have included bloody noses, headaches, insomnia and skin irritation.
The problems were so bad that in a number of cases people abandoned their homes and found rental housing. Some reportedly have been forced into bankruptcy while paying the mortgage on a house they can't live in and along with rent and all of their other bills. Here's one such story, as recounted in today's New York Times:
When Bill Morgan, a retired policeman, moved into his newly built dream home in Williamsburg, Va., three years ago, his hopes were quickly dashed.
His wife and daughter suffered constant nosebleeds and headaches. A persistent foul odor filled the house. Every piece of metal indoors corroded or turned black.
In short order, Mr. Morgan moved out. The headaches and nosebleeds stopped, but the ensuing financial problems pushed him into personal bankruptcy.
It's the Bill Morgan's of the world that U.S. Sens. Bill Nelson, of Florida, Mary Landrieu, of Louisiana, and Mark Warner and Jim Webb, both of Virginia, want FEMA to help with possible rental assistance.
In a letter yesterday to new FEMA Administrator Craig Fugate, they asked for an immediate review to determine whether the disaster agency can provide financial help to folks with drywall claims not covered by their insurance.
"Families in our states are, in many cases, watching their dream homes turn into nightmares," their letter says. "As the Federal government determines the full size and scope of this disaster, we believe it is important to marshal all appropriate federal resources that may assist these families."
A copy of their letter and the New York Times article follows:
October 1 , 2009
The Honorable Craig Fugate
Administrator
Federal Emergency Management Agency
500 C Street, SW, Room 700
Washington, DC 20472
Dear Administrator Fugate:
As we write to you, the Consumer Product Safety Commission (CPSC) and the Environmental Protection Agency (EPA), in coordination with other Federal and State agencies, are conducting a comprehensive investigation into the health and safety impacts of Chinese-made drywall on American consumers. The Federal Emergency Management Agency (FEMA) has an important role in disaster response and recovery efforts -- helping residents impacted by manmade and natural disasters. We believe that, at the appropriate time, your agency may be of assistance to homeowners impacted by this toxic product.
Since 2006, more than 550 million pounds of drywall have been imported to the United States from China. In the last 20 months, countless homeowners across the country have reported serious metal corrosion, noxious fumes and health concerns. Reported symptoms have included bloody noses, headaches, insomnia and skin irritation. Preliminary testing has confirmed that imported defective drywall is the problem, but these tests have not been able to pinpoint the specific problem substance within the drywall. More comprehensive results are expected from CPSC and EPA in late October. As of September 2009, the CPSC has received 1,311 incident reports from 26 states and the District of Columbia, demonstrating that this poses a threat to homeowners across the country.
It is also our understanding that FEMA has played a role in assisting individuals and communities confronted with similar chemical-related health impacts in the past. For example, following an emergency declaration in 1980, FEMA assisted with the temporary relocation of families affected by the toxic waste deposits in the Love Canal neighborhood of Niagara Falls, New York. In 1983, FEMA also assisted with the relocation of residents of Times Beach, Missouri, after the area had been contaminated with dioxin. For this incident, funds were transferred from EPA's Superfund Trust Fund to FEMA for permanent relocation of affected residents.
With this in mind, we respectfully request that FEMA review its existing authority under the Stafford Act and respond no later than November 1, 2009 on the following:
Whether FEMA -- following a written request from a Governor who has declared a disaster or emergency -- may offer rental assistance, if homes, businesses or a combination of the two, have sustained uninsured losses.
In closing, families in our states are, in many cases, watching their dream homes turn into nightmares. As the Federal government determines the full size and scope of this disaster, we believe it is important to marshal all appropriate Federal resources that may assist these families. We therefore thank you for your consideration of this important request.
Sincerely,
Bill Nelson, Mary Landrieu,
Mark Warner and Jim Webb
New York Times
Thousands of U.S. Homeowners Cite Drywall for Ills
By LESLIE WAYNE
October 8, 2009
When Bill Morgan, a retired policeman, moved into his newly built dream home in Williamsburg, Va., three years ago, his hopes were quickly dashed.
His wife and daughter suffered constant nosebleeds and headaches. A persistent foul odor filled the house. Every piece of metal indoors corroded or turned black.
In short order, Mr. Morgan moved out. The headaches and nosebleeds stopped, but the ensuing financial problems pushed him into personal bankruptcy.
"My house is not worth the land it's built on," said Mr. Morgan, who could not maintain the mortgage payments on his $383,000 home in a Williamsburg subdivision called Wellington Estates and the costs of a rental property where his family decamped.
Mr. Morgan, like many other American homebuyers who tell similar tales of woe, is blaming the drywall in his new home -- specifically, drywall from China, imported during the housing boom to meet heavy demand -- that he says is contaminated with various sulfur compounds.
Hundreds of lawsuits are piling up in state and federal courts, and a consolidated class action is moving forward in Louisiana before Judge Eldon E. Fallon of Federal District Court, who will begin hearing cases in January.
Three hundred cases have been filed in Louisiana alone, many with similar complaints from homeowners -- a noxious smell, recurrent headaches and difficulty breathing. In Florida, the health department has received over 500 complaints with such symptoms.
In addition, these suits say, metal objects in homes corrode quickly, causing kitchen appliances, air-conditioners, televisions and plumbing to fail.
"There could be 60,000 to 100,000 homes that are worthless and have to be ripped completely down and rebuilt," said Arnold Levin, a Philadelphia lawyer and co-chairman of the plaintiffs' steering committee.
While tainted Chinese imports like toothpaste, pet food and baby formula have been quickly removed from store shelves, drywall is installed throughout homes and does not lend itself to a quick fix.
This month, the Consumer Product Safety Commission, whose investigation into Chinese drywall is the largest in its history, will release the results of a study to determine why the drywall is causing the problem, and what kind of remediation programs might be effective.
Already, the commission has sent six investigators to Chinese gypsum mines and to meet with the government there. The Chinese government's counterpart to the federal safety commission sent two of its experts here to inspect affected homes.
The commission is also making sure that no more Chinese drywall comes into the country.
"Our ports are on alert," said Inez Tenenbaum, chairwoman of the commission. "They are not letting any in. The market, too, has corrected. No one wants Chinese drywall."
Even President Obama is being pressed by members of Congress to raise the issue on his November trip to China -- the loudest cry coming from Senator Bill Nelson, Democrat of Florida, who has traveled to China on his own to learn more about the drywall problems.
Investigators are finding that getting scientific data, establishing legal accountability and following a supply chain is difficult when so many drywall sheets -- millions in all were brought into the United States -- were simply marked "Made in China," providing no clues to their actual source. The drywall was brought in because United States supplies ran low, not as a cost-saving measure for builders.
One target of the lawsuits is Knauf Plasterboard Tianjin, a German company with manufacturing plants in China that supplied about 20 percent of the Chinese drywall brought into the United States.
Don Hayden, the company's lawyer, said that its own toxicology tests from affected homes showed that the drywall presented no health problems. Even so, he said his company was cooperating with American government investigations.
"Unlike other Chinese manufacturers, we are the only one to come to the United States to address this problem," said Mr. Hayden. "We've spent considerable time and energy and hope that we can provide a workable solution to U. S. homeowners."
One puzzle is why problems have surfaced in the United States and not Asia, where drywall was also sold. According to a safety commission official who declined to be named because of the delicacy of the issue, a theory offered by Chinese officials during their visit to the United States was that American homes are more tightly built, with less ventilation than homes in China.
One drywall manufacturer, the Tishan Gypsum Company, which is controlled by the Chinese government, was found to be in preliminary default last week by a federal judge after the company failed to show up in court.
But whether the Florida builders who brought the class-action lawsuit could ever collect on any future judgment remains unclear, because of the difficulty of gaining jurisdiction and enforcing rulings against foreign companies, especially in China. In other cases, many of the Chinese companies cannot be found or have disbanded.
Homeowners, insurers, home builders, drywall suppliers and Chinese manufacturers, if they can be identified, are often suing each other. Drywall installers and suppliers are also expected to be targets of the next wave of litigation. Many lawsuits need to be translated into Mandarin and follow rules of international law, adding layers of difficulty.
Among the homeowners filing suit are the lieutenant governor of Florida, Jeff Kottkamp; and Sean Payton, head coach of the New Orleans Saints, who has moved out of his Mandeville, La., home.
The product safety commission has received more than 1,300 complaints from 26 states, but the bulk are from Florida, Louisiana and Virginia, where hurricanes led to an unprecedented housing boom in 2006 and 2007.
In 2006 alone, nearly seven million sheets of drywall were imported from China. The federal court in the Eastern District of Louisiana has identified 26 brands of drywall, but 11 others had no markings other than variations of "Made in China."
Insurance companies, in particular, have become a popular target of lawsuits over their refusal to pay claims filed by homeowners and home builders, stating that their policies do not cover problems caused by pollutants.
There are estimates that it costs $100,000 to $150,000 per home to rip out and replace tainted drywall and the electrical equipment attached to it. In these cases, homes are being stripped down to the studs and new drywall is installed.
Some home builders, worried about their reputations, are doing just that. The Lennar Corporation has set aside $40 million for home repairs, while it tries to collect from its insurance company and sues several Chinese suppliers and American middlemen. Lennar declined to comment.
But many smaller home builders, hoping to survive the downturn, do not have such deep pockets. "This couldn't have come at a worse time for the industry," said Jenna Hamilton, assistant vice president of government affairs at the National Association of Home Builders.
For that reason, some members of Congress hope the federal government will provide financial assistance for their constituents, just as it does after natural disasters.
There may be local relief, too. Broward County, Fla., has cut property assessments as much as 20 percent in some affected areas and Miami-Dade is considering a similar tax break. "Florida is hypersensitive to hurricanes and this is like a silent hurricane," said Representative Robert Wexler, Democrat of Florida. "Whole neighborhoods are being wiped out in terms of property values and people's ability to remain in their homes."
Help could not come soon enough for Mr. Morgan's Virginia dream home.
"Every piece of drywall in the house except for four pieces is Chinese," said Mr. Morgan. "We built our home to be safe from floods, and for three years we've been breathing this stuff."
Mr. Morgan said that metal fixtures in his house turned black. His air-conditioner and electrical outlets failed. Lamps and mirrors tarnished immediately. Neighbors, too, had similar problems..
Mr. Morgan bought his house in 2006 after his family spent two years living in a trailer provided by the Federal Emergency Management Agency when their previous home was destroyed in 2003 by Hurricane Isabel. Mr. Morgan has lost the equity in his home, but he still drops by to cut the grass.
"When I drive by my house, it breaks my heart," he said.
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