Chinese Drywall Settlement PraisedOct 18, 2010 | Parker Waichman LLP
The Chinese drywall settlement announced last week by the judge overseeing the consolidated federal litigation in New Orleans is garnering praise from some Louisiana politicians. The Chinese drywall settlement sets up a pilot remediation program by which Knauf Plasterboard Tianjin Co. and various other builders and suppliers will pay to remediate 300 homes in Louisiana, Florida, Mississippi and Alabama. Hopes are high that the pilot program will eventually lead to a larger settlement of Knauf drywall claims.
According to the Associated Press, Senator Mary Landrieu (D-LA) called last week’s announcement a “ray of light” for homeowners plagued by the toxic drywall. Louisiana’s second senator, Republican David Vitter called the settlement “good news,” but added that more needs to be done “to ensure that all the victims receive just compensation.”
The settlement agreement calls for Knauf and other defendants to see that the defective drywall is removed, and replacements made for electrical wiring, appliances including air conditioning, and fixtures damaged by drywall fumes, in accordance with the remediation protocol established by the Consumer Products Safety Commission (CPSC). The protocol also requires that other fixtures be removed and replaced as needed, including: Hot water heaters, cabinets, countertops, doors, moldings and trim (as required to remove drywall), sinks, toilets, bathtubs and shower enclosures, mirrors, ceiling fans, plumbing fixtures, exhaust grills and diffusers, marble pieces, doors and attached door handles.
Knauf will hire the contractors to perform the work, and repairs will be inspected by an environmental engineer.
In addition to paying for repairs, homeowners will receive $8.50 per square foot to cover any additional expenses such as moving costs and temporary housing,
For now, only homes that are proven to contain 95 percent Knauf-made drywall will be eligible for the remediation program. Plaintiff-approved inspectors are visiting homes this week to take pictures to prove to Knauf that homeowners belong in the pilot program.
Chinese Drywall was imported into the US between 2001 and 2006 after a housing boom resulted in a shortage of building materials. Since late 2008, the CPSC has received more than 3,600 reports from residents in 39 states, the District of Columbia, American Samoa, and Puerto Rico regarding defective Chinese drywall. 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.