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Judge OKs five drywall settlements

Feb. 9, 2013
Richard Kampf
Richard Kampf


NEW ORLEANS — A federal judge on Thursday approved five class-action settlements that call for a Chinese drywall manufacturer and others to pay hundreds of millions to repair homes damaged by the product, attorneys for thousands of Gulf Coast property owners said.

U.S. District Judge Eldon Fallon in New Orleans held a hearing in November to help him gauge the fairness of five separate but related settlement agreements between plaintiffs’ lawyers and companies that made, supplied or installed the defective Chinese drywall.

The product was used in the construction of 12,000 to 20,000 homes and businesses after a series of hurricanes in 2005 and before the housing bubble burst. The problems it has caused range from a foul odor to corrosion of pipes and wiring.

Florida has the highest number of drywall homes, followed by Louisiana, but the defective product is found in thousands of homes in 42 states, Puerto Rico, American Samoa and Washington, D.C. Southwest Florida is often called the epicenter of the drywall problem, with about 1,500 homes affected.

“I think the settlement has been long overdue and the homeowners were expecting this well before now,” said Richard Kampf of Cape Coral, who led a grass-roots group of more than 350 drywall homeowners.

Although Judge Fallon’s final approval doesn’t change how the homes are remediated, “this formalizes what homeowners have been doing through the last few months in selecting processes to get their homes fixed,” Kampf said.

Fallon's order certified settlements for Interior/Exterior Building Supply, LP; Banner; L&W Supply Corp.; Knauf and Global participating builders, suppliers and installers.

After Fallon's ruling, plaintiffs' attorney Arnold Levin said he was “thrilled that the court has issued an order and is hopeful that homeowners will now be able to get their homes remediated and put their lives back together.”

Levin said the settlements will benefit more than 10,000 property owners and are estimated to be in excess of $1 billion, most of which will be paid by Knauf Plasterboard Tianjin Co.

Knauf agreed to create an uncapped fund to pay for repairing roughly 5,200 properties, mostly in Florida, Louisiana, Mississippi and Alabama. A separate fund capped at $30 million will pay for other types of losses, including those by people who blame drywall for health problems.

Attorneys' fees and costs paid by Knauf are capped at $160 million and will not be deducted from homeowners' shares of the settlement money.

A total of about 300 plaintiffs have opted out of the five settlements, according to Levin.

Fallon, who presides over more than 10,000 claims involving Chinese drywall, refused in September to dismiss property owners' claims against a different Chinese drywall maker, Taishan Gypsum Co. Ltd.

Taishan, which argues that U.S. courts don't have jurisdiction over claims against it, appealed Fallon's ruling.

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