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Chinese Drywall Manufacturer Hit with Default Judgment

Sep 25, 2009 | Parker Waichman LLP
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A default judgment has been issued against Chinese drywall manufacturer Taishan Gypsum Co. Ltd.   The judgment was handed down by U.S. District Court Judge Eldon E. Fallon after Taishan Gypsum failed to respond to a class-action lawsuit filed against it.

As we've reported previously, attorneys representing an Alabama builder asked Judge Fallon to issue a default judgment after Taishan failed to respond to the  builder’s lawsuit.  Judge Fallon agreed to issue a preliminary default judgment against the manufacturer if it did not file an appearance before Sept. 24.  If the judgment stands, Taishan will not be able to present a defense to the numerous Chinese drywall suits filed against it.

Taishan is also known as Taian Taishan Plasterboard and Shandong Taihe Dongxin Co. Ltd.. The firm is controlled by the Beijing New Building Materials Public Limited Co.(BNBM), a state-owned entity under control of the Chinese government.  According to a report in the Bradenton Herald, the firm imported at least 7.5 million pounds of drywall through Florida and New York in 2006 and 2007.

In issuing the default order, Judge Fallon ordered attorneys for the Alabama builder to compile evidence of damages.  According to the Sarasota Herald-Tribune, a hearing will now be scheduled where the default can be confirmed and a financial judgment against the company ordered.

Though the Taishan default judgment is a victory for drywall plaintiffs, it could prove difficult for them to collect against the firm, as American consumers face many roadblocks when suing foreign companies.  As we reported earlier this summer, the Chinese drywall debacle has prompted some U.S. Senators to propose a law that would eliminate those obstacles.  The Foreign Manufacturers Legal Accountability Act would, among other things, require foreign manufacturers to agree to be held accountable by U.S. courts.

The Taishan lawsuit is among the many Chinese drywall lawsuits from around the country that have been consolidated in a Multidistrict Litigation currently underway in U.S. District Court, Eastern District of Louisiana. The first bellwether trials in that litigation are expected to begin in January.

So far, the Consumer Products Safety Commission has received 1,311 Chinese drywall complaints from homeowners in 26 states and the District of Columbia. Gases emitted from Chinese drywall are being blamed for significant property damage, including damage to HVAC systems, smoke detectors, electrical wiring, metal plumbing components, and other household appliances. These gases also produce a sulfurous odor that permeates homes, and cause metals, including air conditioning coils and even jewelry, to corrode. People living with Chinese drywall have also suffered eye, respiratory and sinus problems that may be linked to the gases.

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