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Chinese Drywall Class Actions Consolidated

Louisiana court to hear multidistrict proceeding

By Jon Hood
ConsumerAffairs.com

June 15, 2009

Chinese Drywall • Louisiana Files Chinese Drywall Suit • Chinese Drywall Class Action Filed • Feds Find Link Between Chinese Drywall And Corrosion In Homes • Feds Hoping China Will Smooth Over Drywall Damage • Another Chinese Drywall Suit Filed • Bill in Congress Would Ban Substandard Drywall, Steel, Cement • Scam Artists Profit from Chinese Drywall Fears • Senator: Florida Faces Chinese Drywall 'Hysteria' • Senators Call for Halt to Drywall Importation • Chinese Drywall a Threat to Homeowners? --- • Knauf Drywall Complaints

A number of lawsuits regarding defective Chinese-manufactured drywall have been consolidated and will be heard by a federal judge in New Orleans, the city whose post-Katrina construction boom is partly to blame for the issue.

The Judicial Panel on Multidistrict Litgation (JPML) has assigned the newly-consolidated action to Judge Eldon Fallon.

Florida-based attorneys had argued that the proceeding should be heard in Miami, since most complaints had emanated from there. Additionally, more lawsuits have been filed in Florida than in any other state. Attorneys in Ohio also argued that their state was the best candidate.

The JPML, made up of seven sitting federal judges appointed by the Chief Justice of the Supreme Court, determines whether two or more lawsuits involve common questions of fact. If the panel makes such a finding, it consolidates the cases and assigns them to a court and judge. Suits alleging mass-tort claims, like the drywall action, are prime contenders for consolidation.

The issue is also receiving attention from Congress, although funding is currently being held up in the House. In May, the Senate Subcommittee on Consumer Protection approved $2 million for the Consumer Product Safety Commission (CPSC) to study the cause and effects of the drywall defects, but the House has yet to ratify the funds. South Florida Reps. Robert Wexler, a Democrat, and Mario Diaz-Balart, a Republican, are fighting to approve the funding. Bill Nelson, Florida's Democratic senior senator, has led the charge in the upper chamber.

Local municipalities are also taking the matter into their own hands. In May, the Norfolk, Virginia city council unanimously approved a measure banning the use of all Chinese drywall in the city.

Approximately 550 million pounds of the drywall were imported into the U.S. between 2004 and 2006. The relatively cheap wallboard was welcomed by homebuilders, who were suffering supply shortages due to the housing boom and construction in the wake of Hurricanes Katrina and Rita.

The bulk of the drywall appears to have been manufactured by Knauf Plasterboard Tianjin Co. (KPT), although other manufacturers may also be to blame. KPT prints its name on the back of its drywall, making it the most easily identifiable culprit — and consequently the most frequently named defendant.

Lennar Homes, the country's second-largest homebuilder, opened itself to liability when it confirmed that it used KPT in some of its houses. Lennar says it is taking steps to remedy the problem.

The drywall poses risks to both property values and homeowners' health. The wallboard emits an egg-like sulfur smell, which corrodes metal fixtures like air conditioners, and causes health problems ranging from coughing and wheezing to asthma and pneumonia.

In addition to Florida and Louisiana, suits have been filed in Virginia, Ohio, Mississippi, and North Carolina.

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