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By Jim Loney

MIAMI, March 2 (Reuters) - A group of Florida homeowners sued German drywall maker Knauf Gips KG, its Chinese plasterboard units and several U.S. homebuilders on Monday, alleging contaminated drywall is sickening U.S. homeowners.

The lawsuit said defective Chinese-made drywall was used during a building materials shortage at the peak of the U.S. construction boom and installed in thousands of homes, where it is emitting sulfur gases, corroding wiring, contaminating fabrics, and wrecking air conditioners and other appliances.

The suit was filed in federal court in Miami as a class-action that could ultimately represent up to 30,000 Florida homeowners, lawyers said.

But the lawsuit said up to 550 million pounds of Chinese drywall came into the United States from 2004 to 2006 and up to 60,000 American homes could be affected.

The allegations are the latest in a series of product safety scandals to hit China involving milk formula, toothpaste, drugs, toys, seafood and pet food.

The suit names Knauf Gips and three Chinese units where wallboard is made, Knauf Plasterboard (Wuhu), Knauf Plasterboard (Dongguan) and Knauf Plasterboard (Tianjin), as well as homebuilders Tousa Homes Inc, TaylorWoodrow Communities and South Kendall Construction.

Knauf is a major drywall supplier. Its website says the company employs 22,000 people in more than 40 countries and had sales of 5.5 billion euros in fiscal year 2007.

The U.S. Consumer Product Safety Commission said last week it was investigating complaints that Chinese-made drywall was emitting odors and causing appliance problems in homes.

"The drywall emits a high level of sulfur and the sulfur is causing the wiring in the homes to fail, copper piping to fail, air conditioning units to fail," said attorney Ervin Gonzalez, who filed the Miami suit. "It also causes a very strange smell like rotten eggs."

Several other lawsuits have been filed in Florida. Gonzalez said lawyers in other U.S. coastal states, where humidity can exacerbate the problem, were working on the issue.

In a written statement, Knauf Plasterboard Tianjin said it was aware of the lawsuit and that it was "actively investigating" Florida complaints. The company said it manufactured about 20 percent of the plasterboard that was imported from China to the United States in 2006.

Any low levels of sulfur in homes are not a health risk to residents, the company said.

"There are no associated health risks with the KPT product," it said.

'A NIGHTMARE'

Felix Martinez and his family moved into their $478,000, five-bedroom dream home in Homestead, Florida, in August 2006. He soon found a host of mechanical problems in the house, while he has been diagnosed with sleep apnea and his wife and children suffer other medical issues.

"This is a nightmare. Our primary concern is our health and protecting the family," said Martinez, a plaintiff in the suit. "As a secondary concern, this is our biggest investment. It's a financial concern of major proportions for us."

The only fix is to move the residents out for six to nine months, gut the house and rebuild the interior, as well as replacing drapes, furniture and other property that may have been contaminated by the gases, Gonzalez said.

Gonzalez estimated it would cost about one-third of a home's value to strip out the drywall, rebuild, and replace other contaminated materials.

The lawsuit also names as defendants building material suppliers Banner Supply Co. of Miami and Rothchilt International Ltd., of Taiwan.

It did not name as a defendant Miami-based Lennar Corp <LEN.N>, which has moved some residents out of their homes while it fixes drywall problems. Gonzalez said his firm was monitoring Lennar's attempted solutions. (Editing by Jane Sutton)

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