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Recent Developments in Chinese Drywall Lawsuits

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New Orleans, LAAttorney Gary Mason, one of about 50 lawyers nationwide assigned to work on the Chinese drywall case, discusses with LawyersandSettlements recent developments in the ongoing contaminated drywall litigation…

In July, Judge Fallon of the U.S. District Court for the Eastern District of Louisiana appointed the lawyers who will serve as the Plaintiffs' Steering Committee (PSC) in the multidistrict litigation (MDL) created to manage the Chinese Drywall litigation.

(MDL allows common issues of many claims to be consolidated in one court. Cases subject to MDL are sent from one court to another for pre-trial proceedings only, and then remanded to the originating court for trial. Then, the plaintiff's attorneys direct the MDL through a PSC, which comprises a committee of lawyers.)

"In large and complex cases, a judge appoints a PSC— here, a group of 12 attorneys have been appointed by the Court to manage the cases," explains Mason. "The PSC has set up subcommittees to cover topics such as discovery, briefing, legal issues, federal and state coordination, and expert witnesses. About 50 lawyers are assigned to work on these subcommittees o develop and prosecute this Chinese drywall case in various ways.

Under the supervision of the court, the parties involved are getting basic information from every homeowner who has filed a case. There are currently about 3,000 cases on file. The PSC will first work on two things: a working profile sheet and an inspection protocol.

Profile sheet

Every plaintiff will be working with their attorney to fill out a profile sheet that provides the Court and parties basic information about their claim. The profile sheet contains about 4 or 5 pages of detailed questions about the plaintiff's situation. It provides crucial information such as the date the house was built; name of the builder; identification of the drywall; whether there are any health issues; kinds of corrosion observed; whether the homeowner has insurance and if a claim has been made against insurance, and more.

Inspection Protocol

At the same time an inspection protocol has been established. The Court will appoint an independent company to conduct home inspections. On the Initial inspection, the primary purpose is to identify that particular house and if it has drywall manufactured in China. The court is going to supervise several hundred inspections in the next several months.

With the homes that are inspected by the Court, together with the profile sheet, the plaintiffs and defendants are going to select about 20 cases that will potentially go to trial. From these 20 cases, defendants are going to pick 5 , the plaintiffs will pick 5 . Next, the court will select 6 cases from those 10 and they will go to trial early next year.

Bellweather Trials

We call these types of cases bellweather trials, which means that these 6 trials should yield information that might foster the ultimate resolution of the litigation. The jury will determine the strengths and weaknesses of the claims and the idea is that these test trials will provide information that will allow attorneys to possibly settle these cases.

[Judge Fallon used bellweather trials to help establish settlement values in the Vioxx litigation. Typically in these trials, the jury's opinion is only advisory and does not bind the parties for purposes of preclusion.]

In the meantime home inspections will continue using profile sheets and inspection protocol for all cases filed. But there will be a core group moving forward so there will be trials in a timely manner, i.e., in 2010. Judge Fallon feels strongly that the situation demands speedy justice; he is taking this Chinese drywall case by the horns and is driving litigation forward very quickly, which is good news for homeowners. The alternative is that this type of litigation typically takes years. Of course many homeowners would like a faster resolution, but short of builders offering to buy their homes, a faster resolution is not likely."



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