Parties In Defective Chinese Drywall Litigation Propose Class Action Settlement

NEW ORLEANS - (Mealey's) Parties in the Chinese drywall multidistrict litigation in a Louisiana federal court on Dec. 15 announced a proposed class action settlement that would potentially resolve thousands of claims involving defective drywall manufactured by Knauf Plasterboard Tianjin (KPT) (In re:  Chinese-Manufactured Drywall Products Liability Litigation, No. 2:09md02047, E.D. La.).

The proposed settlement, which is subject to court approval, is estimated to be between $800 million and $1 billion, the Plaintiffs' Steering Committee announced in a press release. 

The litigation arises from the manufacture, distribution, sale and installation of Chinese drywall in homes where it allegedly emits foul odors, damages metal and electronic elements and devices and causes various personal injuries. 

On June 15, 2009, the Judicial Panel on Multidistrict Litigation transferred all federal actions alleging damages from Chinese-manufactured drywall to the U.S. District Court for the Eastern District of Louisiana.  Judge Eldon E. Fallon is presiding over MDL 2047. 

The settlement would be paid by German manufacturer Knauf and would enable approximately 4,500 properties that contain tainted Chinese drywall supplied by KPT, a Knauf subsidiary, to be remediated.  

Remediation costs would be paid out of an unlimited remediation fund.  The settlement also would create a capped fund to pay claims of personal injury and equity loss due to foreclosures and short sales.  

Properties that have KPT drywall and other manufactured Chinese drywall would receive partial payments.  The settlement also provides for the payment of attorney fees and costs.  

The plaintiffs are represented by Arnold Levin and Fred Longer of Levin Fishbein Sedran & Berman in Philadelphia and Leonard Davis and Russ M. Herman of Herman Herman Katz & Cotlar in New Orleans.  KPT is represented by Gregory  J. Wallance of Kaye Scholer in New York and Kerry J. Miller of Frilot in New Orleans. 

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