Worries about defective framing lumber and a hundred other construction products might have kept Jeff Masters, an attorney who specializes in managing construction risk, awake at night, but defective drywall never caused him one minute of lost sleep.
"That is one that you just would not expect," said the litigating partner at Cox Castle Nicholson in Los Angeles.
But with sulfur-emitting Chinese-made drywall being implicated as the cause of failing HVAC components and blackened electrical wiring in new homes as well as a source of health complaints, Masters is ready to add it to his list of potential nightmares.
The issue began when a number of owners of newly built homes in Florida during the peak of the building boom complained about sulfur smells. Builders also noticed a pattern of quickly deteriorating copper tubing in the homes' HVAC systems as well as blackened exposed electrical wiring. The problem was traced to drywall imported from China during the building boom peak that apparently emits more sulfuric gases than typical drywall.
The U.S. Consumer Products Safety Commission has launched an investigation into the product, according to a report in The Wall Street Journal. Sen. Bill Nelson (R-Fla.) has pushed for investigations, and there have been at least two lawsuits, one a class-action claim, filed against builders and one manufacturer of the drywall.
America's Watchdog, a national consumer advocacy group, also has jumped on the case, saying it is partnering with a network of attorneys across the country who are investigating the problem and testing the products. The group claims it can prove the drywall was installed in homes in at least 25 states.
Masters, the construction risk management attorney, said the issue reminds him of the mold claims that created problems for builders several years ago and suggests that they handle the drywall complaints similarly.
"One of the keys to addressing the mold issue is going to be the same here," said Masters. "The science needs to catch up with the perceived risk. That's why I'm thinking that an industrywide approach (to researching the cause and cures of the problems) might make sense."
For instance, he suggested working with the National Association of Home Builders and/or its research center to study the issue and figure out how to remedy it.
Masters also suggested builders become as knowledgeable about the science as possible and hire a good industrial hygienist to study the problem. But he advised caution about air sampling "because they may not like the results. ...If the homeowner knows they are doing air sampling or testing, they are going to want a copy of the report. Have your inside counsel or outside lawyers quarterback the issue."
"Third, depending on the results of the research and investigation, prepare a communication to the homeowners putting their minds at ease as best as you can about the lack of any health effects and, hopefully, there is some mitigation strategy that can be pursued," he said.
"My fourth suggestion is to go back to the subcontractors with the drywall installers," Masters said. "They need to partner up with the builder on the issue. ...Hopefully they are still in business, and hopefully they have liability insurance."
Another attorney active in the field of risk management who asked that his name not be used because of the clients he represents, also suggested that builders facing claims related to the Chinese-made drywall follow the same policies they have in place for mold claims.
If the homeowners are complaining of health problems, it's easier and cheaper to move them out while the home is tested "if for no other reason than that you are mitigating damages, lessening the exposure claims," he said. If there are no complaints of health-related problems, there is less of a need for urgency.
The problem is that the strategy for dealing with the potential legal issues of having built homes with defective drywall is different from the one that you would employ to thwart public relations impacts, the attorney noted. A legal strategy would be to keep a lid on everything, including the evidence, while a more public relations-friendly strategy would involve being more open about the issue to help calm consumers.
The attorney also suggested that builders work closely with their insurers on the issue to settle claims quickly, perhaps even relaxing some of the rules, to help avoid lawsuits that would prove more costly than settlements in the end.