Federal Judge Wants to Return Chinese Drywall Lawsuits to Original States

Nine years after a judge began supervising a multitude of federal lawsuits that claim homes were damaged by Chinese drywall, he says it’s time to return thousands of remaining cases for trial in the courts where they were filed.

The panel that put Judge Eldon Fallon in charge in 2009 said the first 1,700 would return to Florida’s federal courts if no objections are filed by Thursday. At least three objection notices were filed Thursday by attorneys for about 750 clients. Objectors’ briefs must be filed by April 12, with responses are due May 3, according to the U.S. Judicial Panel on Multidistrict Litigation’s electronic docket.

Fallon ruled in 2010 that Chinese-made drywall released sulfur fumes into homes, sickening occupants, corroding metals in wiring, plumbing, appliances and electronics, and stinking up the houses. In 2013, he approved settlements involving thousands of homes and other buildings with drywall from German-owned Knauf Plasterboard Tianjin Co.

Remaining cases involve a second company, Taishan Gypsum Co. Ltd., which didn’t show up in court until Fallon found it in contempt and forbade any of its subsidiaries or affiliates to do business in this country until it participated in court proceedings.

Fallon told the panel he wants to transfer all remaining Chinese drywall cases that were sent to him.

Ann Saucer of the Baron & Budd law firm, which joined two others in an objection for 418 clients, said, “We’re sort of confused as to why only these particular claims are being transferred back for trial.”

Any requests to transfer are unusual. Supervising judges resolve the great majority of cases, mostly through settlements, according to a 2014 Louisiana Law Review article by Edward F. Sherman of Tulane University.

“The gold standard, I think, is to get everybody to a point where you can get global peace for everybody,” said Louisiana State University law Professor Margaret Thomas.

But when that doesn’t happen the cases must go to trial in the states where the suits were filed.

About 5,000 cases remain from eight states: Florida, Virginia, Louisiana, Alabama, Mississippi, Georgia, North Carolina and California, attorney Arnold Levin, spokesman for the Plaintiffs Steering Committee in this case, said Thursday.

Fallon said in a March 12 order and request that he’s dealt with all pretrial motions raising common questions, held “bellwether trials” to lead the way and has approved a formula for calculating property damages.

He wrote that his court “has worked diligently for the past nine years,” producing abundant evidence and judicial opinions to enable the original courts and the parties in the lawsuits to steer any unresolved cases “to a fair and just conclusion.”

His order and request was accompanied by a 118-page list identifying 1,734 cases comprising one Florida class action. There could be more than 1,000 additional cases in a separate group that includes Florida defendants, Levin said.

Plaintiffs whose cases would be transferred back include Jason and Heather Ancer of Land O Lakes, Florida. Jason Ancer said an inspector who claimed to be a Chinese drywall expert told them their house was fine, but their air conditioner began failing within months after they moved in. Their drywall turned out to have been made by Taishan. Five months after moving in, Heather Ancer became pregnant.

The couple left the house, stopped making payments on it and eventually declared bankruptcy.

“We don’t know what to think,” said Jason Ancer. “All I know is it seems that definitely we will not have any kind of recourse.”

He said that in Facebook groups of people affected by Taishan’s drywall, people are asking how are individual trials going to do any good if the combined cases can’t go forward.

That isn’t so, Levin said.

“We as plaintiffs support what Judge Fallon has done,” he said. “It’s nine years, and the Chinese have tried every tactic to see to it that the people we represent either die or otherwise have their properties disposed of … just trying to frustrate the process.”

Levin said the steering committee’s attorneys are ready to work with lawyers representing the remaining defendants.

“Ultimately, the only thing that leads a recalcitrant defendant to settle is a big verdict,” he said.

Taishan and its subsidiaries and affiliates do a lot of business in the United States. One of them sells solar panels to Walmart and another buying timber in Oregon, he said. Levin said those companies’ assets in this country can be attached if Taishan ignores court orders to pay damages, Levin said.

Once the cases return to their originating courts, he said, “The Chinese will be all over America trying cases.”