Chinese Drywall Litigation Moving Forward Quickly

A federal judge is pushing lawyers involved in Chinese drywall litigation to quickly exchange necessary information and records so that trials can begin in January 2010.

All federal lawsuits over Chinese drywall, which caused problems for hundreds of homeowners throughout the United States, are consolidated and centralized before U.S. District Judge Eldon Fallon in Louisiana.

At a status hearing this month, Judge Fallon called on attorneys for plaintiffs and defendants to hand over documents as quickly as possible to stay on course for the first trials to begin in January for claims involving property damage.

Defective Chinese drywall has been blamed for causing foul odors, corrosion of electrical equipment and a host of health problems. At least 1,192 incident reports of the drywall problems have been received by the U.S. Consumer Product Safety Commission (CPSC) from 24 states, with the majority of reports coming from Florida, Louisiana and Virginia.

The drywall was imported into the United States from China earlier this decade due to a domestic shortage caused by a housing boom and construction following a series of hurricanes that struck the southeastern United States.

The plaintiffs involved in the Chinese drywall litigation have faced difficulty, since several of the defendants are foreign corporations in China. This week, Judge Fallon declared Taishan Gypsum Co. to be in default in a Chinese drywall class action lawsuit for failing to respond to the claim in the U.S. Court.

Taishan Gypsum is a Chinese company that supplied much of the tainted drywall to the U.S. Some experts say the court will have to seize some or all of the U.S. assets the company might have if it does not respond to the judgment.

Bipartisan legislation was introduced on August 7 in the U.S. Senate that would require foreign manufacturers to consent to state and federal jurisdiction if they are taken to court, and would also require them to have a representative in the country that could be served a lawsuit or regulatory claim on behalf of the company.

The legislation arose as a result of hearings on defective Chinese drywall that highlighted the problems homeowners and U.S. distributers were having holding foreign manufacturers legally responsible for their products.

The new legislation, the Foreign Manufacturers Legal Accountability Act of 2009, was introduced by Senator Sheldon Whitehouse, a Democrat from Rhode Island, and co-sponsored by Senators Jeff Sessions (R-AL) and Richard Durbin (D-IL). It has received support from the Consumers Union and the Consumer Federation of America.