Chinese-Government-Controlled Drywall Manufacturer to Appeal $2,600,000 Default Judgment to Fifth Circuit

NEW ORLEANS - (Mealey's) A key Chinese drywall manufacturer that had a default judgment for more than $2.6 million entered against it in May finally appeared in federal court June 10, only to serve notice that it is appealing the judgment and all related orders to the Fifth Circuit U.S. Court of Appeals (Michelle Germano, et al. v. Taishan Gypsum Co. Ltd., et al., No. 2:09cv06687, E.D. La.).

Michelle Germano is among seven Virginia homeowners and their families who sued drywall manufacturer Taishan Gypsum Co. Ltd., formerly known as Shandong Taihe Dongxin Co. Ltd., and other companies in a putative class action in the U.S. District Court for the Eastern District of Virginia.  The case was transferred by the Judicial Panel on Multidistrict Litigation to the Eastern District of Louisiana for consolidation into the Chinese drywall MDL for coordinated pretrial proceedings under Judge Eldon E. Fallon.

In November, Judge Fallon entered a default judgment in favor of the plaintiffs against the Chinese-government-controlled Taishan Gypsum, which never answered the complaint or filed any responsive pleading.  Following default proceedings in February, Judge Fallon determined that extensive remediation to the plaintiffs' homes was required; he went on to find that individual plaintiffs' damages ranged from $89,676.86 to $481,613.29 and, aggregating the amounts of damages proven by all seven plaintiff families, he awarded monetary damages against Taishan Gypsum in the amount of $2,609,129.99.

Attorneys for Taishan Gypsum filed appearances in Judge Fallon's court June 10 and, in a one-paragraph filing the same day, gave notice that the company will appeal the default judgment and all related orders to the Fifth Circuit.  According to the Fifth Circuit docket, nothing has been filed as yet in that court.

According to published reports, this is the first time Taishan Gypsum has responded to a lawsuit in the United States.

[Editor's Note:  Full coverage will be in the July issue of Mealey's Litigation Report: Construction Defects. In the meantime, the order is available at www.mealeysonline.com or by calling the Customer Support Department at 1-800-833-9844. Document #09-100702-004X.  For all of your legal news needs, please visit www.lexisnexis.com/mealeys.]

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For more information, call editor Gerald C. Matics at 610-205-1131, or e-mail him at gerald.matics@lexisnexis.com.

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