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Chinese Drywall Lawsuits May be Consolidated in Federal Court in Fort Myers, FL

May 29, 2009 | Parker Waichman LLP Chinese drywall lawsuits from around the country may be consolidated  in a single jurisdiction.  Some plaintiffs' attorneys, as well as some defendants, are advocating that the Chinese drywall lawsuits be consolidated and transferred to the U.S. District Court for the Middle District of Florida, Fort Myers Division, which is located in the epicenter of the Chinese drywall problem.

Homeowners in at least 16 states have complained that fumes from Chinese-made drywall produce a “rotten eggs” odor and cause metals, such as air conditioning coils, to corrode. The fumes have also been associated with respiratory and sinus problems in some residents. According to a recent Wall Street Journal article, the U.S. imported roughly 309 million square feet of drywall from China during the housing boom from 2004 to 2007. While the first complaints about the material came from Florida, homeowners in many other states - including Virginia, Mississippi, Louisiana and North Carolina - have reported problems.

Earlier this week, the Environmental Protection Agency (EPA) released results of tests it conducted that compared Chinese drywall to American-made material. The tests found sulfur and two organic compounds associated with acrylic paint in the Chinese drywall that were not present in the American wallboard. The agency said more testing is needed to determine if any of the compounds found in the Chinese drywall are responsible for problems reported by homeowners.

The Chinese drywall problem has spawned scores of lawsuits in both federal and state courts.  Parker Waichman LLP, a law firm in Bonita Springs, Florida  filed the first federal class action on behalf of drywall victims in January.  

Earlier this month, the Judicial Panel on Multidistrict Litigation (JPML) in Louisville, KY heard oral arguments requesting that all pending Chinese drywall cases filed around the country be consolidated and transferred to one jurisdiction.  Parker Waichman LLP was among those who argued that the U.S. District Court for the Middle District of Florida, Fort Myers Division was the appropriate jurisdiction for the drywall litigation.  According to attorney Jordan Chaikin, the firm favors this venue because Southwest Florida was the site of the first Chinese drywall complaints.

According to Chaikin, some of the main domestic defendants involved in the Chinese drywall litigation - namely U.S Gypsum and L&W Supply Co. - support Parker Waichman LLP's choice of forum in the Middle District of Florida. A Transfer Order from the Panel is expected by mid-June.

The Judicial Panel on Multidistrict Litigation of the United States Courts was created in 1968. Since then, it has consolidated hundreds of thousands of lawsuits that involved high numbers of plaintiffs, including litigation over asbestos, breast implants and other matters. A multidistrict litigation (MDL) allows all cases to be coordinated under one judge for pretrial litigation to avoid duplicative discovery, inconsistent rulings and to conserve the resources of the parties, witnesses and the court. When lawsuits are consolidated as an MDL each retains its own identity. If the MDL process does not resolve the cases, they are transferred back to the court where they originated for trial.

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