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Rubio, Díaz-Balart, Colleagues Urge Administration to Hold Chinese Companies Accountable for Defective Drywall

Mar 26, 2019 | Press Releases

Washington, D.C. – This week, U.S. Senator Marco Rubio (R-FL) joined U.S. Representatives Mario Díaz-Balart (R-FL), Ted Deutch (D-FL) and members of the Florida delegation in urging Department of Commerce Secretary Wilbur Ross, Ambassador to China Terry Branstad, and United States Trade Representative Robert Lighthizer, to hold Chinese companies who manufactured defective drywall accountable for the significant damages it caused to the homes of more than 8,000 Americans rebuilding in the aftermath of natural disasters more than a decade ago. Specifically, the letter asks the administration to take action to prevent these companies from doing business in the U.S. until they resolve the injustice impacting thousands of Americans.

“After more than a decade, thousands of Floridians are still seeking justice and battling with the harmful effects of toxic Chinese drywall.” Rubio said, “We must hold Chinese drywall companies responsible for the damages caused to the health and homes of impacted American families, and make it clear they can no longer avoid accountability.”

“Since 2006, thousands of American citizens have been seeking relief from defective Chinese drywall, which has not only affected their homes and personal property, but it has also impacted their day to day lives. It’s time to put an end to this inexcusable injustice. These Chinese manufacturers, agents of the regime, have circumvented our justice system for far too long, and they must be brought to justice,” said Congressman Mario Díaz-Balart.

“For most families, their home is not only their biggest investment and most valuable asset, but also where their dearest memories are made. To watch it corrode because of defective drywall is heartbreaking. Adding insult to injury is the fact that the drywall also has adversely affected the health of otherwise healthy people,” said Congresswoman Frederica S. Wilson. “The Chinese drywall has ruined homes all across the nation, but most prevalently in Florida. I urge everyone whose home has been affected to let the authorities know as soon as possible and also to beware of scammers falsely claiming an ability to help the problem. Please also know that your Florida congressional delegation is on your side and fighting to make sure that the Chinese companies responsible for this fiasco resolve this injustice.”

Joining Rubio and Díaz-Balart in signing the letter were U.S. Representatives: Ted Deutch (D-FL), Ted Yoho (R-FL), Alcee Hastings (D-FL), Gus Bilirakis (R-FL), Frederica Wilson (D-FL), Bill Posey (R-FL), Debbie Wasserman Schultz (D-FL), Matt Gaetz (R-FL), Lois Frankel (D-FL), John Rutherford (R-FL), Al Lawson (D-FL), Michael Waltz (R-FL), Debbie Mucarsel-Powell (D-FL), Neal Dunn (R-FL), Donna Shalala (D-FL), and Francis Rooney (R-FL).

The full text of the letter is below.

Dear Secretary Ross,

Ambassador Branstad,

Ambassador Lighthizer,

Since 2006, more than 8,000 United States citizens sustained significant damages to their homes from defective drywall manufactured in China. Chinese drywall creates a corrosive environment that ruins appliances, electrical wiring, plumbing, air conditioning, and heating systems, and must be removed. For nearly a decade, the Chinese manufacturers of this drywall have tried to avoid lawsuits brought by thousands of American citizens. In 2013, U.S. Senators and Members of Congress filed an amicus brief in the Fifth Circuit Court of Appeals in the case Germano, et al. v. Taishan Gypsum Company Limited. The brief urged the Federal Courts to extend jurisdiction over the Chinese companies that manufactured contaminated drywall to ensure that American victims could be made whole by the companies. And yet Taishan Gypsum, TTP, and BNBM (and their parents CNBM and CNBM Group) have used every legal tactic available to escape responsibility for their defective products.

CNBM Group is an agent of the People’s Republic of China and have consistently skirted the legal system and avoided paying for their actions. A few examples include:

  • Deliberately refusing to participate in judicial proceedings in the U.S.

  • After default judgments were entered against them, Taishan Gypsum came into Court to contest jurisdiction, and when they lost, CNBM Group supported Taishan’s defiance of Court Orders and its return to China. CNBM Group then directed its subsidiaries to avoid putting funds in banks with branches in New York, where they could be subject to seizure, and ordered its personnel to use only personal emails rather than company emails when doing business overseas.

  • Taishan Gypsum was held in civil and criminal contempt of court for fleeing the jurisdiction and refusing to appear in open court for a judgment debtor examination.

  • Taishan and its affiliates were enjoined from doing business in the U.S., but numerous CNBM and BNBM entities continued to do substantial business here during the contempt period.

  • Taishan was sanctioned for discovery abuses, for concealing the whereabouts of a key witness and for intentionally delaying production of documents from the witness’s computer.

Most victims of Taishan’s Chinese Drywall cannot afford to gut their homes to fix the problem. Many are living with toxicity because they have nowhere to go. Some have moved out; many have filed for bankruptcy or suffered foreclosure. The Chinese refuse to compensate these Americans.

In contrast, a German company (Knauf) with factories in China that manufactured defective drywall paid $1.1 billion to remediate 4,000 properties. The homeowners with Knauf drywall were made whole, but neighbors with Taishan drywall are still waiting for relief.

We respectfully request, within all applicable rules and regulations, that a resolution of the defective drywall claims against these recalcitrant Chinese companies be discussed, and that action be taken to prevent them from doing business in the U.S. until they resolve the injustice impacting thousands of American citizens.