High and dry(wall) – Judge Fallon awards $2.6 million to 7 families in Chinese Drywall case

The Times Picayune had the “breaking news” up before lunch.  I thought I would, too, but this was just “another one of those days” – and the result is more news about the case, starting with the report online at the Sun Herald, although not “breaking”.

A New Orleans federal judge on Thursday awarded seven Virginia families $2.6 million in damages for homes ruined by sulfur-emitting drywall made in China, a decision that could affect how lawsuits by thousands of other homeowners are settled.

It remains to be seen how the plaintiffs can collect from Chinese companies that do not have to respond to U.S courts, although some have talked about getting orders to seize U.S.-bound ships and cargoes from the drywall companies.

In other words, plaintiffs are left “high and dry(wall)” until someone comes up with the money.  Judge Fallon has the Findings of Fact and Conclusions of Law but he doesn’t have the check (h/t Bloomberg for the case identification needed to find the document). A story in the Palm Beach Post , however, provides additional detail about Fallon’s decision for those who want fast facts:

The landmark ruling — which sets a standard for fixing affected homes that goes above and beyond anything recommended before — quantifies just how damaging and disruptive the defective wallboard is and provides guidance for homeowners on how to treat the problem.

In a 108-page document released Thursday, U.S. District Judge Eldon E. Fallon in New Orleans found that affected houses must be gutted almost down to the studs, including the removal of all drywall, electrical wires, copper pipes and heating, ventilating and air-conditioning units, as well as other items such as carpeting, cabinets, countertops and bathroom fixtures.

Fallon estimated the remediation will cost an average of $86 per square foot. He also decided that the homeowners were entitled to receive money for relocation costs, reimbursement for personal property damaged by the drywall’s sulfuric off-gassing, and compensation for loss of use and enjoyment of a home.

SLABBED readers got a whiff of Fallon’s Order in last week’s post, Rotten eggs in the bunny-basket of news, reporting the guidelines established by the Consumer Product Safety Commission, mistakenly identified as the Consumer Protection Safety Commission, in the wire story published by the Sun Herald:

Thousands of homeowners, mostly in Florida, Virginia, Mississippi, Alabama and Louisiana, have reported problems with the drywall, which was imported in large quantities during the housing boom and after a string of Gulf Coast hurricanes.

The drywall has been linked to corrosion of wiring, air conditioning units, computers, doorknobs and jewelry, along with possible health effects.

U.S. District Judge Eldon Fallon ruled Thursday that the drywall should be removed and the plaintiffs’ homes should be gutted because of the ruinous effects of corrosion. He said all electrical wiring, the heating and air conditioning system, appliances, carpet, cabinetry, trim work and flooring damaged by corrosion will have to be removed.

Follow the links in this post for more about Fallon’s “landmark ruling”.

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