Consumer Fraud

Judge awards plaintiffs $2.6 million in first Chinese drywall trial

In the first of a series of bellwether trials involving toxic Chinese drywall, U.S. District Judge Eldon Fallon ruled last week that Taishan Gypsum Co. must pay $2.6 million to repair seven damaged Virginia homes and replace their damaged contents.

The case, which was tried in U.S. District Court, Eastern District of Louisiana, New Orleans, will help determine the scope and outcome of pending and future litigation involving homes ruined by the drywall.

Thousands of homeowners throughout the U.S. but mostly in Florida and other Southern states allege that the drywall installed throughout their homes, imported from China during the last building boom, emits a sulfuric odor indicative of toxic, corrosive gases.

In addition to making occupants ill with a range of mostly respiratory ailments, the fumes corrode copper and other metal present in air conditioning units, household fixtures, appliances and electronics.

Judge Tallon said that Taishan Gypsum must pay to “remove all drywall in their homes, all items which have suffered corrosion as a result of the Chinese drywall and all items which will be materially damaged in the process of removal.”

The typical cost of such an undertaking, which will involve stripping every wall and ceiling down to the bare studs and replacing all damaged appliances and electronics, will cost about $232,000 on a $350,000 home, according to the judge’s estimates.

More than 2,100 homeowners have filed lawsuits in federal court claiming that their homes and/or health have been damaged by the sulfuric drywall.

Three separate cases have been scheduled in Florida state courts in June and seven are pending in Virginia state courts. According to some legal estimates, the number of lawsuits could climb to as many as 40,000.

Taishan Gypsum, a state controlled operation of the Chinese government, never responded to the filings and did not defend itself. The company could be covered by government immunity, in which case plaintiffs may have a difficult time receiving any money awarded to them.