Homeowners and builders are suing a Chinese drywall company that they say manufactured defective and harmful drywall products that were installed in many homes in Florida and across the south. A judge in Florida recently determined that the courts there do have jurisdiction over the Chinese company, which imported the drywall through a subsidiary that operated heavily in the state.
An attorney representing builders in the case told reporters that manufacturers in China need to stand behind their products and that the recent victory in Miami-Dade Circuit Court will help to hold them accountable.
The homeowners who were originally affected by the defective drywall have pursued claims all the way up the chain, starting with builders, installers, and others on the American side of the process. However, all parties are now turning to seek a remedy from the manufacturer, who is both ultimately responsible and the only party with the resources to pay for repairing the damage to the homes.
These lawsuits have many issues inherent in them, but the main problem facing both homeowners and builders is the fact that the company that manufactured the material is in China.
It is very common for builders, particularly those doing a large-scale project, to look for savings by buying materials from lower-priced manufacturers around the world. In a global economy, it makes sense for construction companies to take advantage of the ease of sourcing materials from a variety of places, although sourcing from countries with less strict environmental regulations has proved to be risky in the past. It is also incredibly difficult to enforce a legal judgment across borders, where it is generally impossible to seize assets in lieu of an unpaid judgment.
Source: New York Times, "Turning Point for Suits Over Chinese Drywall," Andrew Martin, Oct. 12, 2012.
More information about construction litigation is available on our Florida commercial law website.