$248 million settlement reached with Chinese drywall maker

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An investigation by the Herald-Tribune and the watchdog group ProPublica found that nearly 7,000 U.S. houses were built using bad drywall, but enough of the material was imported to have been used in at least 100,000. The tainted material was used to build hundreds of Southwest Florida homes during the region’s housing bubble.

NEW ORLEANS — A proposed $248 million settlement has been filed in a decade-old federal court case over defective Chinese drywall blamed for damaging home appliances and sickening residents.

The proposed settlement between property owners and Taishan Gypsum Co. was filed in U.S. District Court in New Orleans this week. It comes nearly eight years after a major settlement in another case involving a different Chinese company, Knauf Plasterboard Tianjin Co., and in the wake of other settlements with various homebuilders, equipment suppliers and installers who used the material.

An investigation by the Herald-Tribune and the watchdog group ProPublica found that nearly 7,000 U.S. houses were built using bad drywall, but enough of the material was imported to have been used in at least 100,000. The tainted material was used to build hundreds of Southwest Florida homes during the region’s housing bubble in the mid-2000s, creating a slew of reported health problems and leaving millions of dollars’ worth of replacement damage.

All of the litigation arose from the use of the defective drywall in thousands of homes between about 2005 and 2008. The product was alleged to have given off sulfur fumes that corroded metal in appliances, air conditioning equipment, wiring and plumbing fixtures.

A committee of attorneys for the property owners in the Taishan case said in a news release that most of the residences involved were in Florida, Louisiana, Alabama, Mississippi and Virginia.

Attorneys have asked U.S. District Judge Eldon Fallon for preliminary court approval of the settlement, pending further reviews, public notice and a subsequent “fairness hearing” expected later this year.

“If the court approves it, thousands of homeowners affected by Taishan drywall will finally get much needed payments from Taishan,” said Arnold Levin, lead counsel for a committee of the plaintiffs’ attorneys in the case.

The settlement would end years of litigation that at one point resulted in Taishan facing a contempt judgment from Fallon for failing to appear in court in 2014. Taishan rejoined the case the following year and the settlement includes agreement that both sides will ask the judge to purge the contempt judgment from the record.

Information from the Associated Press was used in this report.

 

 

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