A partial settlement has been reached in a class action lawsuit dealing with defective Chinese drywall installed in homes between 2004 and 2008.
Under the settlement, which was approved by Judge Eldon E. Fallon of the U.S. District Court in New Orleans, defendant Knauf Plasterboard Tianjin (KPT) will fund a pilot program to replace drywall in about 300 homes in Alabama, Florida, Louisiana and Mississippi. Depending on the program's success, it could eventually serve as a model for 3,000 other homes in those four states, as well as Texas and Virginia.
Under the agreement, KPT will pay not only for the drywall, but also for appliances, electrical wiring, and gas tubing damaged by sulfur fumes emitted by the drywall. Affected homeowners will also be reimbursed for their relocation costs while the repairs, which could take several months, are being completed.
To qualify for the settlement, a home must contain at least 95 percent KPT-manufactured drywall.
KPT open to eventually expanding settlement
Russ Herman, an attorney for the plaintiffs, said the settlement is likely to run KPT at least $36 million, and probably significantly more.
"What's it going to cost?" Herman asked rhetorically, taking little time to consider his answer. "We don't care. That's Knauf's problem."
Gregory Wallance, an attorney for KPT, said the manufacturer is open to expanding the settlement if things go smoothly.
"The 300 homes are intended to be a confidence-building exercise. It will get [homeowners'] attention," Wallance told the Miami Herald. "We can rapidly expand it to beyond the 300 homes."
Caldwell calls settlement "a first step"
Louisiana Attorney General Buddy Caldwell, who filed the suit in January, called the settlement "a first step toward getting contaminated homes with Chinese drywall fixed and the value of those homes restored," but warned that it is "not the final resolution." Caldwell promised that he "will not rest until all affected homes in Louisiana have been fixed."
Mary Landrieu, Louisiana's senior U.S. Senator, also applauded the settlement, calling it "a ray of light" for homeowners "who have seen their dream homes turn into a nightmare."
Caldwell urged consumers who think their homes may contain defective drywall to step forward, urging that the wallboard presents "not only a structural issue, but a safety issue as well." A number of homeowners have complained of headaches, dry eyes, and bloody noses, among other allergy-like symptoms, raising the question of whether the sulfuric fumes thrown off by the drywall are to blame. One study by the Department of Housing and Urban Development (HUD) and the Consumer Product Safety Commission (CPSC) found that some samples of Chinese drywall had 100 times the amount of hydrogen sulfide as non-Chinese drywall.
Caldwell also pointed out that the sulfur's tendency to corrode wiring and gas equipment raises the risk of a gas or electrical fire. Additionally, the compound has the potential to damage wiring in smoke detectors and sprinkler systems, leaving homeowners especially vulnerable to a devastating -- and possibly deadly -- home fire.
Verdict against second manufacturer in April
Knauf
isn't the only drywall manufacturer implicated in the disaster, which
has so far affected homeowners in 39 states.
In April, seven plaintiffs received an award of more than $2.6 million against Taishan Gypsum Co., another Chinese company that imported defective drywall. In its decision, the U.S. District Court for the Eastern District of Louisiana found that "the level of corrosive sulfur gases emitted by Chinese drywall in the Plaintiffs' homes exceed the safe level established by recognized standards, peer reviewed literature, and expert opinions and this corrosive environment has had a significant impact on the exposed property."
In January, ConsumerAffairs.com received a complaint from Carol of Birmingham, AL, who says Knauf drywall was installed in her home. Carol writes:
"A forensic specialist from Houston, Texas with RIMKUS investigated our home and took samples of the dry wall. His report proved we have a high concentration of gases that have corroded our coils in our air conditioners, pipes on our hot water heater, jewelry, silver service, etc. ... By the time we found, in Oct. 2009, that we had Chinese dry wall, we had been sick frequently which seemed to puzzle our physician. I have asthma which has gotten increasingly worse. The smell of the gas has gotten worse with time and I wonder if we will end up with our house on fire and have nothing left or if my life will be shortened due to the gases causing health issues. I have gotten acne all on my face and never have had a problem. We have lost the worth of our house at the age of 68. All the wiring is corroded in the house. We have tried to use air fresheners throughout the house and it helps some but the air is still thick with gas."
