Ltd. (KPT), a subsidiary of a German company with manufacturing plants in China, and the Taishan Gypsum Co., which is
controlled by the Chinese government.
The first drywall class action lawsuit against homebuild-ers, suppliers, and manufacturers (including KPT) was filed in
federal court in Florida in January 2009. Subsequent class action lawsuits were filed in California, Louisiana, and Alabama.
In many of these suits, plaintiffs claim to have suffered from
respiratory problems and headaches as a result of the gases
emanating from the defective drywall.
The U.S. Judicial Panel on Multidistrict Litigation consolidated a group of 10 class action lawsuits involving homeowners
from Louisiana, Florida, and other states in June 2009. The
consolidated lawsuit, under the jurisdiction of Judge Eldon
Fallon of the federal District Court for the Eastern District of
Louisiana, will serve as a test case for determining the appropriate disposition of other pending lawsuits. In actions that
could be precedent setting, Fallon will consider the extent of
required remediation and whether companies whose remediation efforts were less extensive will be forced to upgrade their
work on previously repaired homes.
In October 2010, KPT agreed to a pilot program in which
it, along with a number of other defendants, will fund repairs
to 300 homes in Florida, Louisiana, Alabama, and Mississippi
that are involved in the consolidated suit. Earlier in 2010, KPT
reached a settlement in a federal lawsuit involving owners
of two Louisiana properties. The settlement requires KPT to
remove all drywall from the homes, along with the electrical
systems and other components.
residential mortgage foreclosures and
the availability of property insurance
for residences containing defective
drywall. Rep. Wexler co-sponsored the
bill with Rep. Mario Diaz-balart (R-Fla.).
There was no further action on the bill.
■ ■ In october 2009, Florida’s Sen. nelson
sent letters to 11 insurance companies requesting that they issue policy
guidelines on Chinese drywall and
expressing concern about rumored
cancellations of homeowners’ insurance. Shortly thereafter, Citizens
Property Insurance Corp. in Florida
reversed a decision to discontinue
insurance for policyholders whose
homes contained defective drywall.
■ ■ In november 2009, Rep. Charlie Mel-
ancon (D-La.) introduced H.R. 4094, the
Drywall victims Insurance Protection
Act of 2009, which would have prohib-
ited refusal to renew or the cancellation
of a homeowners’ insurance policy
based on the presence or possible
presence of defective drywall on the
property. The bill was referred to the
House Committee on Financial Services.
no further action was taken on the bill.
