[Exclusive] "Why Wasn't There a Warning About Dust Causing Lung Disease?"... Facing a 5 Trillion Won Lawsuit Crisis

LX Hausys, Hyundai L&C, and Lotte Chemical Sued
Criticized for Inadequate Warnings on Pneumoconiosis Risk
Precedent of 10 Billion KRW Compensation in Similar Case Last Year
Potential Impact on U.S. Business Expansion

In the United States, cases of workers processing engineered stone being exposed to silica dust for extended periods and suffering from lung diseases are rapidly increasing, and it has been confirmed that Korean building materials companies operating locally are embroiled in large-scale damage compensation lawsuits. Given that a U.S. company previously received a hefty compensation ruling in a similar lawsuit, there is considerable speculation that domestic companies may be held legally responsible.

According to the building materials industry on the 26th, Korean building materials companies such as LX Hausys, Hyundai L&C, and Lotte Chemical, which operate businesses in the U.S., have recently been sued by hundreds of local product processing workers. The total number of domestic and foreign companies involved in this lawsuit reaches 5,900 (including duplicates), with the total lawsuit amount estimated at approximately 5.2 trillion KRW.

DALL·E generated image.

The plaintiffs, mainly stone fabricators and construction workers who process engineered stone, claim that they developed lung diseases such as pneumoconiosis after inhaling silica dust over a long period. They argue that the companies manufacturing and supplying the products failed to adequately inform them of the risks of pneumoconiosis and did not provide proper work guidance, such as wearing appropriate protective equipment, which caused the damage.

For example, a U.S. worker who worked as a stone fabricator for about 20 years since 1992 and was diagnosed with pneumoconiosis and pulmonary fibrosis filed a lawsuit in October last year at the California Superior Court against about 100 companies, including LX Hausys and Hyundai L&C, manufacturers and distributors of quartz-based engineered stone. He alleged that "although the Safety Data Sheet (SDS) indicated that the product 'May cause cancer,' the International Agency for Research on Cancer (IARC) had already classified crystalline silica as a Known Carcinogen in 1997, but this was not reflected," and that "the risk of pneumoconiosis due to silica exposure was not clearly warned, and the SDS did not clearly instruct workers to always wear respiratory protective equipment," among other 'charges.'

There is already precedent for similar cases locally. Last year, a U.S. court ruled in a lawsuit filed by workers against the Israeli engineered stone manufacturer Caesarstone, recognizing the companies' negligence in safety measures and ordering approximately $79 million (about 10 billion KRW) in compensation. An industry insider said, "Since a ruling recognizing heavy and broad corporate responsibility was made in a similar case, there is a considerable possibility that a similar judgment will be made in this class-action lawsuit, based on fact verification."

The formal trial procedures for this lawsuit have not yet begun. Given the large number of parties involved, including plaintiffs and defendants, and the substantial lawsuit amount, it is expected that the preparation process will require significant time. A representative of one of the sued companies said, "It is difficult to know specific details at this point, including how the lawsuit amount will be allocated per individual company," adding, "We are monitoring the local situation and preparing appropriate responses."

The companies being sued have been striving to diversify their businesses by actively expanding into the U.S. market as the domestic construction market experiences prolonged and structural stagnation. LX Hausys, which holds about a 10% share of the global engineered stone market, has continuously expanded its production capacity since establishing a plant in Georgia, U.S., in 2011. Last year, it strengthened its localization strategy by opening a showroom in New York. In 2023, 19% (486.7 billion KRW) of LX Hausys' total building materials sales were generated in the U.S. Hyundai L&C also recorded sales of 113.8 billion KRW in the U.S. in 2023, the highest among its five overseas subsidiaries in operation.

Meanwhile, if the U.S. court sides with the workers, it is anticipated that regardless of the compensation amount, it could significantly impact the future operation of their businesses.