Deadline for Chinese Drywall Class Action Against Knauf Plasterboard Set

A court order has been issued that gives homeowners with defective Chinese drywall manufactured by Knauf Plasterboard one month to file for inclusion in a class action lawsuit against the foreign supplier, bypassing legal hurdles associated with service on the Chinese company.

Knauf Plasterboard Tianjin (KPT), is a Chinese subsidiary of a German company which allegedly imported much of the contaminated drywall into the United States between 2004 and 2006. The company has agreed to temporarily waive its rights to have lawsuits served through the Hague Convention, giving plaintiffs a one-month window to join an omnibus class action lawsuit against the company.

Defective Chinese drywall has been blamed for causing foul odors, corrosion of electrical equipment and a host of health problems. The drywall was imported into the United States 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 U.S. Consumer Product Safety Commission (CPSC) has received at least 1,900 complaints about problems with Chinese drywall from homeowners in 30 states.

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In a court order issued on Monday, U.S. District Court Judge Eldon E. Fallon set a deadline of December 9, 2009 for the filing of an Omnibus Chinese Drywall Class Action Complaint. To be eligible for inclusion in the complaint, plaintiffs must provide proof that their homes contain Knauf drywall by December 2. Proof of the defective drywall can be established through use of photographs, samples, visual inspections or reports identifying Knauf markings on drywall in their home.

Knauf Plasterboard (Tianjin), a subsidiary of the Knauf Group, is only waiving its right to effectuate service through the Hague Convention for participants in the omnibus class action lawsuit, which they indicate will not be amended to add other litigants in the future.

Foreign companies have the right to be served legal services through the Hague Conventions, which includes translation into the company’s native language and serving papers to the company in its home country. The process is slow and expensive, costing about $15,000, and has hindered many plaintiffs from listing KPT as a defendant in Chinese drywall lawsuits.

Last week, CPSC investigators released preliminary testing results on Chinese drywall, finding that it released high amounts of sulfur gases and strontium, a highly chemically reactive element used in fireworks and often found in nuclear fallout.

Chinese drywall litigation has already been filed by a number of homeowners throughout the United States against drywall manufacturers and distributers. In June, all of the federal drywall litigation was consolidated and centralized in an MDL, or Multidistrict Litigation. The cases were assigned to Judge Fallon, who has put the cases on a “fast track,” with trials involving property damage claims set to begin in early 2010.

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