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Chinese Drywall Class Action Lawsuit Underway

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New Orleans, LAA federal class action lawsuit was filed on December 9 in the US District Court in New Orleans against Knauf Plasterboard Tainjin Co. Ltd. (KPT), one of the primary manufacturers of Chinese drywall. New Orleans Saints head coach Sean Payton is the lead plaintiff, along with about 2100 people who registered their complaint by the deadline.

Plaintiffs include residents of Alabama, Florida, Louisiana and Mississippi. Defense counsel said that KPT's problems are limited to these four states because its drywall was only imported into Louisiana and Florida ports.

This class action lawsuit is one of many filed against 600 homebuilders, remodelers, building suppliers and Chinese drywall distributors named as defendants, in addition to KPT.

All of the Chinese drywall lawsuits filed in federal courts have been consolidated in the US District Court in New Orleans under Judge Eldon Fallon as part of a multidistrict litigation (MDL). Representatives of KPT have not appeared for proceedings, and Judge Fallon has found the company in default.

The 591-page suit hopes to determine how many people are affected by this brand of defective drywall and how much it will cost to repair the damage. A series of bellwether trials (test cases) in January will help attorneys assign a value to the damages and determine why Chinese drywall is causing problems. These tests will enable lawyers to get clarity on the issue without having to go to trial in all the 2,100 claims against KPT.

Lead counsel in the national litigation, Russ Herman, said about 600 people missed the deadline and cannot be included in the federal suit. However, he plans to include them in another complaint that will be filed overseas.

The first trial is expected to be a case for one plaintiff out of Virginia. In January, proceedings in Virginia are scheduled to go forward against Taishan Gyspum, another Chinese company that manufactured allegedly contaminated drywall. If the plaintiffs in this case are successful, the suit will prevent the company from importing to the US. Its ships and cargo will be seized and sold until it pays the judgment, or until the value of the judgment has been reached.

Meanwhile, the federal government says it will unveil a plan to help homeowners with Chinese drywall. According to Tampa Bay Online, the US Department of Housing and Urban Development (HUD) will make an announcement soon about federal money that can be used to help remediate homes with contaminated drywall. HUD Secretary Shaun Donovan wrote a letter to Florida Sen. Bill Nelson, stating that HUD will issue guidance, "making it clear that actions to remediate drywall can be eligible for assistance under the Community Development Block Grant program."

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