Trials for Lawsuits over Chinese Drywall Could Begin Early 2010

U.S. District Judge Eldon E. Fallon, who is overseeing the consolidated lawsuits over Chinese drywall, has indicated he intends to move the litigation forward quickly and the first trials could begin in six months.

All federal lawsuits filed by homeowners throughout the United States over damages caused by defective drywall imported from China were centralized and consolidated on June 15 in an MDL, or Multidistrict Litigation. The cases were assigned to Judge Fallon in the Eastern District of Louisiana for pretrial litigation.

While it typically takes more than a year for the first trials to occur in complex MDL litigation like this, Judge Fallon intends to fast track the first trials, referred to as “bellwether” trials because they are selected to be representative of issues that will be presented to juries in other cases involved in the litigation.

Judge Fallon has extensive experience handling multidistrict litigations (MDLs), and was widely praised for his handling of the consolidated lawsuits over the recalled painkiller Vioxx, which involved over 30,000 claims. After a series of early trials were presented to juries in the Vioxx litigation, a global settlement worth $4.85 billion was reached between the plaintiffs and the drug’s maker.

The lawsuits over Chinese drywall involve claims that the defective building material used to construct thousands of homes across the country earlier this decade can emit corrosive gases that emit foul odors, damage electrical equipment and copper throughout the home and allegedly cause a host of health problems. Explanations for the material’s damaging properties have ranged from high amounts of sulfur to radioactive material banned by EPA.

Fallon laid out an aggressive schedule for moving the Chinese drywall cases toward trial during a status conference earlier this month. He said that once the legal steering committees for the cases are set, he wants guidelines for inspecting affected homes and the inspections themselves to occur a month later.

Chinese drywall attorneys for plaintiffs and defendants will be expected to each select ten cases to begin early discovery, after which each side will pick five cases to go to trial. The plaintiffs and defendants will then be able to challenge two of the other side’s five trials. That will leave five cases to go to trial, with one standby case.

The first cases will deal with property damage claims, Fallon said, because they can be resolved quickly. Lawsuits involving Chinese drywall injury claims would likely not begin for another year.

Fallon has also laid out a number of ways to keep the cases moving through the system swiftly, including:

• Pre-certification of experts and inspectors by both sides.
• Determination of damages occurring first, with liability for each party determined separately.
• Persuading foreign defendants to waive requirements that they be served with the lawsuit in their home countries.

Many homeowners have already begun to try to have the drywall removed from their homes, but protocols for properly and effectively removing defective Chinese drywall have not yet been established.

According to a press release issued Monday by U.S. Building Laboratories, Inc., forensic expert Spiderman S. Mulholland warned that attempts at remediating homes with Chinese drywall is resulting in cross contamination, and even after the drywall is removed sulfur is still present in the air in the home, causing continuing damage. Mulholland also warned that some contractors are asking home owners to sign away rights to future litigation and liability in order to have the drywall replaced.

Improper removal of drywall could lead to more damage, higher costs, and potentially endanger the health of homeowners, Mulholland says, stressing that affected home owners should wait for the development of standard removal protocols based on sound science and should avoid signing away rights to pursue Chinese drywall lawsuits.