Program to Settle Chinese Drywall Lawsuit Will Result in Repair of 300 Homes

A major importer and producer of Chinese drywall is attempting to settle with homeowners whose property contain defective and toxic drywall by establishing a pilot program where the company will pay to repair about 300 homes. 

U.S. District Judge Eldon Fallon approved an agreement to settle Chinese drywall lawsuits late last week. The agreement was reached by Germany-based Knauf Plasterboard Tianjin (KPT) and some domestic distributers, suppliers and insurers, with about 300 homeowners in Florida, Louisiana, Alabama and Mississippi. The companies have agreed to pay for repairs to the homes, and it could lead to the settlement of about 3,000 Chinese drywall lawsuits against KPT.

The defendants have agreed to remove the drywall, electrical wiring, gas fixtures and appliances from the homes and pay for relocation of families for the duration of the repairs. The repairs are expected to cost between $40-80 per square foot; a price that does not include the cost of relocating the families for several months while repairs are made.

The U.S. Consumer Products Safety Commission (CPSC) has received thousands of complaints from across the United States from homeowners who say that toxic Chinese wallboard imported between 2004 and 2007 releases sulfuric odors that corrode wiring throughout the home, damage appliances and may cause various health problems. Many of the problems with the Chinese drywall have been confirmed by laboratory testing.

Millions of sheets of the toxic drywall were imported from China into the United States due to a domestic shortage caused by a housing boom and construction following a serious of hurricanes that struck the southeastern United States.

Homeowners throughout the United States have filed lawsuits over Chinese drywall, naming manufacturers, distributors and builders. In June 2009, all of the federal drywall litigation was consolidated and centralized in an MDL, or Multidistrict Litigation, in New Orleans under U.S. District Judge Eldon Fallon.

Earlier this year, Judge Fallon awarded $164,000 to a Louisiana family that filed a Chinese drywall lawsuit against Knauf. The ruling equated to about $81 per square foot. Since that ruling, Knauf has begun seeking to discuss a Chinese drywall settlement.