ThePopTort

Huff Post Repost: America Wakes Up to the Importance of Liability and the Stupidity of “Caps”

Teachable moments can come almost anytime, from anywhere. The recent history of corporate and professional breakdowns and mess-ups should provide a number of them. Bob Herbert raised the issue in a stinging New York Times column recently when he asked, "Will we learn anything from this disaster ...?" BP was his focus but also on his mind was "how the giant financial firms almost destroyed the American economy" and the "devastating mine explosion in West Virginia -- at a mine run by a company with its own hideous safety record ..."

We'll add to that list the Toyota debacle, drug companies marketing contaminated childrens' medications, builders who pushed defective Chinese drywall into thousands of homes, Delaware doctors who covered-up a pedophile pediatrician who raped children, not to mention more and more dangerous hospitals everywhere. What a couple of months.

Keep reading.

Cases Move Forward in that Other Southeast U.S. Environmental Catastrophe – Chinese Drywall

The last time we covered the Chinese Drywall “hot mess," the Deepwater Horizon oilrig occupied nary a nanosecond of brain power for most people.  Of course, now our collective brains are hurting pretty badly over that.  Incredibly, what is happening in the Gulf is just the latest environmental calamity to hit the southeast recently– and I’m not even talking about hurricanes. 

We like to talk about Chinese Drywall because it highlights so very well the important role that civil courts and good trial lawyers play in getting not-so-easy-to-come-by justice for people.

Bloomberg reports that so far, over 2,100 people are plaintiffs in coordinated nationwide federal drywall litigation and the New Orleans judge overseeing it said that USG (“North America’s largest maker of gypsum wallboard”) and Germany’s Knauf Group "are among about 1,000 defendants” that may face claims.  That should help residents in their quest for justice and compensation.  He also said that “as many as 40,000 plaintiffs may bring claims,” which gives one a sense of the breadth of this problem.

And in Florida, a drywall case received the first-ever class action status.  It’s a smaller case, involving “152 families from three Homestead neighborhoods,” but a very important one.  A Miami New Times blogger put it quite well:

For the first time in the nation, a Miami judge this morning certified a class action lawsuit against distributors and manufacturers of the toxic drywall.

The class action suit is limited to a single subdivision in Homestead, but lawyers say the judge's decision could be an important precedent for thousands of other victims.

"Now that we've established the precedent that there is a defective product with a common source, we can start to expand on the victory," says Victor Diaz, the lawyer representing the Homestead couple who brought the lawsuit.

…

Diaz also sits on the steering committee of the large federal case seeking a class action suit, which sits in New Orleans' federal court. He says the Miami ruling -- issued by Circuit Court Judge Joseph Ferina -- could help the federal judge in Louisiana authorize a nationwide class-action.

"This was all about testing whether these cases could be brought on as a class-action and we won a big victory today," he says.

Hang in there, southeast!

Fighting Insurance Abuse in Court

The high profile and, many believe, politically-motivated litigation by a few state Attorneys General (some in defiance of their own Governors) to invalidate the new health insurance reform law is nothing compared to the litigation that will likely be needed to force insurance companies simply to comply with the law. 

Today we learned that “insurance companies are already arguing that, at least for now, they do not have to provide one of the benefits that the president calls a centerpiece of the law: coverage for certain children with pre-existing conditions” – conditions like “asthma, diabetes, birth defects, orthopedic problems, leukemia, cystic fibrosis and sickle cell disease.”  (In other words, they want things to be business-as-usual, like how they handled 10-day-old Houston Tracy, who needed surgery to correct a congenital heart defect and whose insurer initially denied the claim calling the birth defect a “pre-existing condition.”)

The insurers now seem to be saying that rather than refuse to cover treatment for a pre-existing condition, the company “might simply deny coverage for the child or the family” until 2014, when they are required to provide coverage.  Whoa.  The Times writes,

Senator John D. Rockefeller IV, Democrat of West Virginia and chairman of the Senate commerce committee, said: “The ink has not yet dried on the health care reform bill, and already some deplorable health insurance companies are trying to duck away from covering children with pre-existing conditions. This is outrageous.”

The White House says it will try to clarify this through regulations but “lawyers said the rules could be challenged in court if they went beyond the law or were inconsistent with it.”  Gee, an insurance company forcing a case into court? 

Welcome to the world of policyholders and their attorneys, who spend a good chunk of their life trying to get intransigence insurance companies to comply with the law and pay legitimate claims - like the Chinese drywall case that a homeowner recently won in Louisiana.  Remember the ongoing, enormous Chinese drywall mess? (“Many homeowners in southeastern states such as Louisiana and Florida have found that drywall imported from China amid the housing boom and rebuilding efforts after the 2004 and 2005 hurricanes emits sulfuric gases that smell bad, make people feel sick and corrodes metal appliances, wiring and components in homes. Insurers have universally been denying claims.”)

In this new case, a local judge ruled that “the policy exclusions that insurers have commonly been using to deny claims for drywall damage don’t apply.”  For example, insurers were actually trying to get out of covering a homeowner's claim by applying an "environmental damage" exclusion, even though clearly the damage to homes came from defective building materials - not pollution.  The legislature is also considering a bill to prevent homeowners who file these claims from being cancelled. 

Oh, they’ll need that law.  And they’ll need good trial lawyers, too!

Chinese Drywall, the U.S. Housing Bubble, and Civil Justice

The “hot mess” that is the Chinese drywall fiasco seems to be getting hotter by the day—at least according to blockbuster investigative piece by Tim Elfrink in today’s Broward-Palm Beach New Times.

While the story is striking on numerous levels, what particularly caught our attention was the blatant culpability of developers and builders, who were so eager to cash in on the late 1990s/early 2000s housing boom, that consumer safety was essentially tossed out the window.  In fact, until then, Chinese drywall manufacturers like Knauf Tianjin “rarely exported drywall to the States.”  But when the U.S. housing market “exploded”, Chinese companies started supplying drywall that “the company eventually knew was faulty.”

Home­owners immediately reported problems, but that didn’t stop the builders.  As Richard Kampf, a former EPA chief who was one of the first homeowners to raise a red flag about Chinese drywall (in 2007) discovered, some manufacturers and builders knew as early as 2006 that something was wrong with the drywall.  “They knew this stuff was bad, and they kept right on shipping it.  And Florida builders kept right on using it.”

Meanwhile, the government’s reaction, whether due to a lack of coordination or the considerable political influence of developers who, are “the most politically connected industry in Florida,”  has been anything but stellar.   Said state Senator Dave Aronberg, "The government has dragged its feet on testing, the state has not acted... and there's been no real legislation….It's inertia, and it's a sheer lack of political will holding us back."  In fact, said Aronberg, "The only people taking any initiative are trial lawyers." 

Lawsuits against “the builders, the importers, the manufacturers, and the distributors” have now been filed in Florida, Virginia, and Louisiana, which are “the three states most affected by the drywall.”  Many are class actions and in one, “Knauf, the German-owned company that seems to have imported the most Chinese drywall to Florida, has agreed to be tried in Louisiana.”  That’s a good start.

CPSC Releases 2nd Chinese Drywall Report; Corrosion Link Cited

The Consumer Products Safety Commission (CPSC) released a sequel to its previous report about Chinese drywall yesterday—and surprise, surprise, it found a “strong association” between the chemicals in Chinese drywall and the corrosion of wires in proximity of the stuff.

The Council was somewhat more tentative when it came to addressing health concerns of those exposed to the drywall.  Said CPSC spokesman Scott Wolfson:  "We can say that we believe that there's a number of different chemicals that when brought together can be related to some of these irritant health effects that we've been getting reports of….But we're still working toward that exact nexus."  However, the CPSC also advised those with Chinese drywall in their homes to “[s]pend as much time outdoors in fresh air as possible.”

Meanwhile, the civil justice implications of these findings remain unclear. “Thousands of homeowners who bought new houses built with the imported Chinese building product are finding their lives in limbo as hundreds of lawsuits against builders, contractors, suppliers and manufacturers wind through the courts.”  Yet just one manufacturer, Knauf Plasterboard Tianjian, has “agreed to be served with a federal class-action lawsuit and not force plaintiffs to go through international legal channels.”  Still others “with corrosive drywall from China in their homes are in a bind because their builders have gone bankrupt and it's not clear whether they can be held liable.” 
 
In the meantime, the CPSC “along with the Environmental Protection Agency and the Centers for Disease Control and Prevention, continues to study the potential health effects, and the long-term implications of the corrosion.”

CPSC Releases Initial Report on Chinese Drywall

Vicitms of the Chinese drywall mess may have received some help as they try pursing lawsuits against   those responsible, although this can’t be too comforting. 

The the Consumer Products Safety Commission (CPSC) issued a report today finding that "Chinese drywall contains higher levels of sulfur and strontium and emits volatile sulfur compounds at a higher rate than domestic drywall samples...".

Check out an executive summary of the CPSC findings here.

More test results are expected in November.  Stay tuned.

UPDATE: But here are lots of disappointed homeowners because the findings fail to make the obvious link to health problems.