300 Homes to Be Repaired in Settlement with Chinese Drywall Firm

A Chinese drywall manufacturer has agreed to participate in the remediation of up to 300 homes in Alabama, Mississippi, Louisiana and Florida that were contaminated by faulty drywall.

An agreement was reached with Knauf Plasterboard Tianjin (KPT) in Chinese Drywall multi-district litigation that establishes a demonstration remediation program, funded by KPT and a number of builders, drywall suppliers and their insurers. The impacted homes contain drywall manufactured by KPT.

Hundreds of lawsuits have been filed against homebuilders, developers, installers, realtors, brokers, suppliers, importers, exporters, distributors and manufacturers over drywall from China, which was widely imported into the United States between 2004 and 2006.

Because of the commonality of facts in the various cases, litigation concerning the faulty drywall was designated as multidistrict litigation (MDL). In June 2009 all federal cases were consolidated and assigned to Judge Eldon E. Fallon of the U.S. District Court, Eastern District of Louisiana.

Among the participating builders, suppliers and insurers in the current settlement are Interior/Exterior Building Supply, the Louisiana Homebuilders Indemnity Trust, QBE Insurance Group and State Farm Insurance, according to an announcement by a group of plaintiffs’ attorneys involved in the litigation. The Louisiana-based supplier Interior/Exterior Building Supply was an integral component in reaching this agreement and the company has agreed to help fund this pilot program, the announcement said. Other Knauf entities signed on and are participating in the agreement.

“The purpose of the demonstration remediation project is to establish a model for the resolution of the KPT drywall issue,” stated Gregory J. Wallance of Kaye Scholer LLP, who represented KPT with Kerry J. Miller of Frilot LLC.

In June, KPT settled with plaintiffs Paul Clement and Celeste Schexnaydre Clement, and plaintiff John Campbell, in cases involving damage to their homes from drywall manufactured in a plant owned by Knauf in Tianjin. The terms of the settlement were not revealed.

In late April, Fallon found Knauf Plasterboard Tianjin liable for the cost associated with removing the faulty drywall, replacing appliances and furniture, and completely remediating the home of Tatum and Charlene Hernandez of Mandeville, La., and assessed an amount of $164,000. A settlement was subsequently agreed upon in that case, as well.