Is My Drywall Chinese? - HB Litigation Conferences

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significant indemnification or contribution rights against others in the chain of distribution that are more responsible. Manufacturers and distributors of plumbing, electrical or air conditioning components that have failed or have been alleged by customers to be defective should also consider whether it is possible that defective drywall is the true reason for the problem. Liability may also fall on the design, construction and inspection teams, based on breach-ofwarranty claims. The American Institute of Architects ("AIA") and the Associated General Contractors of America ("AGC") provide standard form contracts widely used in construction transactions. These contracts contain the typical express warranty clauses given by many contractors, including that all work will be of good quality, free from faults and defects and conform to the contract documents. Builders of new homes also implicitly warrant to the owner that the homes will be completed in a workmanlike manner and will be suitable for habitation. Some limits on the extension of the warranties exist. For example, the defect complained of must have been latent—undiscoverable despite reasonable inspection—or the warranty does not survive. When a home or building is not suitable for its intended purpose because of substandard or defective materials, builders may be also liable of misrepresentation, unfair business practices or negligence, depending on the governing law. <strong>Is</strong>sues regarding insurance coverage are also likely to be important. Insurance policies, which often are written with broad pollution exclusions, may offer no legal defense for building industry companies faced with lawsuits because drywall is allegedly emitting toxic gas inside homes and walls that may be deemed "pollution." Companies may want to seek counsel regarding whether to put their insurance companies on notice of potential issues. Companies should also review their contracts, subcontracts, warranties and insurance policies to analyze their liability and their ability to satisfy potential compensatory damages. Government Regulatory Responses Federal and state agencies are also investigating drywall products imported from China. U.S. Sen. Bill Nelson (D-Fla.) has asked the U.S. Environmental Protection Agency ("EPA") and the U.S. Consumer Product Safety Commission ("CPSC") to investigate whether <strong>Chinese</strong>-manufactured drywall is toxic. U.S. Rep. Vern Buchanan (R-Fla.) has also written the Federal Trade Commission and the Office of the U.S. Trade Representative, asking them to take corrective steps. The CPSC has responded by focusing on whether the sulfur-based gases emitted from the drywall are corroding household wiring and whether these gases pose a potential safety hazard. If the commission determines there is a safety hazard, it could order a halt in further sales of certain drywall products. The CPSC has been asked to prepare drywall safety standards. To the extent that potential CPSC regulatory action could impact business operations, concerned parties may want to seek counsel about providing input during this phase of the regulatory process. Carbon disulfide, carbonyl sulfide and dimethyl sulfide have been found in air samples of some of the affected homes. If inhaled in large quantities, carbon disulfide can affect a person's nervous system and can be life threatening in high levels, according to the U.S. Department of Health and Human Services. As for carbonyl sulfide (another potential byproduct), some states have established health criteria regarding the permissible levels. Accordingly, a manufacturer's 3 [ www.duanemorris.com ]
liability for selling defective drywall may vary considerably depending upon the state of installation. In response to many complaints, FLDOH is currently investigating potential health hazards that may arise when metals inside a home are rapidly corroding. Therefore, the regulatory response by individual states may impose substantial new costs on manufacturers, distributors and consumers of drywall products. To the extent that one has concerns that state regulators may not have been provided with adequate information about this issue, interested parties should seek counsel to formulate an effective submission to the pertinent regulators. Sheila Raftery Wiggins is a partner in the Newark office of Duane Morris who has handled construction and products liability-related litigations. 4 [ www.duanemorris.com ]
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HB Litigation Conferences Presents
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FACULTY Jeremy Alters is the foundi
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works include FasTrain: Florida Civ
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a Superfund case that resulted in a
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clerk in the United States District
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The “Writing On The Wall”: Impo
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STATES WHERE IMPORTED DRYWALL HAS B
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Florida Reports of Drywall “Cases
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STATE RESPOND ● Florida ● Louis
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Glenn Cambre, Esq. Director Directo
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PHONE SURVEY INFORMATION: Identifie
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LOUISIANA DRYWALL IMPACT MAPS 6/17/
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FLORIDA VS LOUISIANA DRYWALL • Fl
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Remediation Standard? ● Presently
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Chairman Pryor, Ranking Member Wick
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the German manufacturer, Knauf, onl
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companies, the homeowners, and the
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Chinese drywall spins off 'silent h
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The EPA said these results are not
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Get out of house with Chinese drywa
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The Consumer Product Safety Commiss
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“We’re trying to get the federa
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claims, but it's still a significan
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Imported Drywall and Health - A Gui
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Who is at risk? • insomnia • he
Page 102 and 103: "The Writing Is on the Wall": Defec
Page 104 and 105: significant indemnification or cont
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Page 108 and 109: An Introduction to Our Firm Duane M
Page 110 and 111: • Utilizing the Construction Grou
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Page 114 and 115: The Walls Are Closing In: Chinese D
Page 116 and 117: "The Writing Is on the Wall": Defec
Page 120 and 121: Sheila Raftery Wiggins, Partner Dua
Page 122 and 123: Real Estate Litigation • Represen
Page 124 and 125: Selected Publications • "The Wall
Page 126 and 127: TRIGGER OF COVERAGE cont. 2. “Rel
Page 128 and 129: TRIGGER OF COVERAGE cont. 6. Triple
Page 130: OTHER CONSIDERATIONS • Deductible
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Reduced Sulfur Compounds are Diffic
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Analysis Methods— Electrochemical
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Conc. (ppmv) 1.0 0.9 0.8 0.7 0.6 0.
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Key Reactions* • H2S + H2O + M =
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Chemistry of Emissions from Drywall
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What is Damaged? Problems we’re s
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Copper Wires Blacken Paul G. Philli
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Pitted Bath Tub Stoppers Paul G. Ph
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What MAY BE Damaged Problems we’r
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What’s Reportedly Damaged Other p
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Black Copper Sulfide TYPICAL BLACKE
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Reaction Progresses Paul G. Phillip
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COATED COIL IS ALL BLACK Open Quest
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PUSH-IN WIRING CONNECTION Open Ques
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Open Questions • How and where ar
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Outline Chinese Drywall A Practical
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Is My Drywall Chinese? b) Visual Ap
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Is My Drywall Chinese? Is My Drywal
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Is My Drywall Chinese? • To Test
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Costs Risk Management 101 • Lesso
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Can This Get Any Worse? • Emergin
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The Expected Primary Defense: “Po
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Revisions to the “APE APE” Demo
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Cases Interpreting the Pollution Ex
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Other Issues Additional coverage pa
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contradicts the plain language and
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partial off-site exclusion for some
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With respect to the new, absolute p
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Even when courts find that an APE s
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Setting aside expectations of cover
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The LDI’s Advisory Letter warned
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Decisions by the High Courts in Cal
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interpretation comports with the AP
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exclusion should not reflexively be
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The court in Koloms criticized the
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ingestion of lead paint debris foun
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that reject coverage for non-enviro
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Survey of Appellate Court Decisions
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State Limiting Exclusion to “Indu
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State Limiting Exclusion to “Indu
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L:\MASTERLS\Seminar\HB Chinese Dryw
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OCCURRENCE “Property Damage”
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OCCURRENCE Majority View: Liabili
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CHOICE OF LAW Starting point for c
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CHOICE OF LAW “Significant Conta
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Which Contractors Will Be Covered b
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Which Contractors Will Be Covered b
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that has not been physically injure
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In sum, in most states the damage c
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the several Chinese drywall claims
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V. The “Absolute Pollution Exclus
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to test for, monitor, clean up, rem
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spraying of pesticide in apartment
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exclusion are not met because the
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VI. Choice of Law As discussed abov
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homes containing Chinese drywall ar
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“legally obligated to pay as dama
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By: Veronica M. Bates TRIGGER OF CO
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TRIGGER OF COVERAGE cont. 4. “Inj
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ALLOCATION 1. Pro Rata • Time on
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Chinese Drywall Litigation NELSON
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NELSON • LEVINE • de LUCA & HOR
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Additional Insured Issues • The m
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Additional Insured Issues • 2004
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Subrogation Opportunities Targets a
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Subrogation Opportunities • Contr
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Subrogation Opportunities • Hurdl
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Liability Issues Hugh J. Turner Jr.
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Manufacturers • Knauf Gips, KG (e
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Suppliers 84 Lumber Co. All Flori
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Drywall Lawsuit Models • Type 1:
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Express Warranty • Elements - Exp
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Medical Monitoring • Elements: -
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Vicarious Liability A corporation
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What Are The Defenses? Economic Lo
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DEFENSES Florida - Strict Liabilit
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DEFENSES Lack of Privity of Contra
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What Are The Current Issues In The
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Current Issues • Case Assignments
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Current Issues Insurance Coverage
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Issues In Florida • Chapter 558 R
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Chinese Drywall Conference Sander L
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Are Chinese Drywall Issues Similar
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Search for New Defendants • Contr
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How does Chinese drywall impact hom
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How does Chinese drywall impact hom
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Home H Value Over 10 Yeaars How doe
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Home H Value Over 10 Yeaars Home H
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Use of Mass Appraisal Models Event
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Use of Mass Appraisal Models Cross-
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SUITE 650, FOURTH AVENUE SEATTLE, W
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concern at the moment remain 2004
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able, in which case rather than a
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subject properties and the data use
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CHINESE DRYWALL LITIGATION UPDATE A
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5 6
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WHERE WAS THE CHINESE DRYWALL USED
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WHAT KIND OF EXPERTS YOU’LL NEED
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Hydrogen Sulfide Exposure • Belie
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BACKGROUND PROCEDURE MULTIDISTRICT
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that there is a much smaller chance
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applicable standard of liability. D
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RULES OF PROCEDURE OF THE JUDICIAL
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- 3 - transferred under Section 140
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- 5 - (c) Copies of motions for tra
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- 7 - (c) Once a corporate disclosu
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- 9 - designating such a pleading a
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RULE 7.6: TERMINATION AND REMAND In
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- 13 - (b) Each party filing a moti
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- 15 - (C) the circuit court of app
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UNITED STATES JUDICIAL PANEL ON MUL
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Drywall Common building material ty
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Chinese Drywall Analysis ( incomple
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Coal combustion residues Derived f
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Coal Mine Waste Coal may be sold a
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Coal Fly Ash Resident complaints E
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Skin Acne Skin rashes Hives Per
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Sensitive populations Infants Chi
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Carbon Disulfide Gas—evaporates
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Sulfur Dioxide Sulfur Dioxide An E
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SO 2 Symptoms of Chronic Exposure t
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Exposure to lower concentrations of
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GI Symptoms of H 2S Nausea Vomiti
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Particulate Matter Particulate Matt
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Airways of Lungs Lungs
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Clearance from the lungs is not cle
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Particles containing Heavy metals a
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Natural Decay Series: Uranium-238 U
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PAHs Benzo[a]pyrene Group 1 Human c
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