A federal judge in New Orleans ultimately approved a $248 million settlement in the nationwide Chinese Drywall Litigation, bringing to a close a lawsuit that spanned more than a decade. The litigation involved a class of more than 3,600 property owners whose homes and properties were damaged by defective Chinese drywall. The settlement was funded by Taishan Gypsum Co., a Chinese manufacturer of construction products.
Following extensive negotiations, the parties reached a class settlement that ultimately resolved claims against Taishan Gypsum and participating defendants. After receiving final court approval, the settlement provided compensation to eligible property owners who participated in the federal litigation, as well as other qualifying property owners who demonstrated that their homes contained Chinese drywall manufactured by Taishan Gypsum or another participating defendant. A court-appointed neutral oversaw the allocation of settlement funds, and distributions to eligible class members were completed through the court-administered claims process.
Herman, Herman, Katz & Cotlar (now Herman, Katz, Gisleson & Cain) played an instrumental role throughout the more than 10-year litigation, helping overcome complex jurisdictional challenges and other legal hurdles while participating directly in the settlement negotiations. Thousands of homes and condominium properties built between 2005 and 2008, primarily in Florida, Louisiana, Alabama, Mississippi, and Virginia, contained the defective drywall. The drywall was associated with unpleasant odors and corrosive gases that damaged air conditioning systems, wiring, fixtures, appliances, and other metal components within affected homes.
The litigation had also resulted in a separate, landmark settlement with Knauf Plasterboard (Tianjin) Co., Ltd., another major manufacturer of Chinese drywall. That settlement provided billions of dollars in remediation and compensation for affected homeowners and established a comprehensive program to repair homes damaged by defective drywall.
Beginning in 2009, lawsuits were filed against manufacturers, suppliers, builders, installers, and other entities alleged to have been involved in manufacturing or supplying the defective drywall. The cases were consolidated as multidistrict litigation before U.S. District Judge Eldon E. Fallon in the Eastern District of Louisiana. During the course of the litigation, Judge Fallon presided over more than one hundred status conferences and issued numerous rulings addressing complex issues of international law, jurisdiction, and sovereign immunity. Related proceedings were also conducted in federal courts in Miami, Florida, and Norfolk, Virginia.
The Chinese Drywall Litigation remains one of the most significant construction defect cases in the United States and reflects HKGC’s longstanding experience handling complex, high-stakes, nationwide litigation on behalf of property owners. Together, the Knauf and Taishan settlements resolved claims involving the vast majority of affected properties across the United States, bringing long-awaited relief to thousands of homeowners.
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