Verdict for Plaintiffs in FirstChinese Drywall Ruling

Includes payment for repairs to HVAC systems for any damage caused by leeching sulfur.

The first court ruling in the U.S. over damages caused by defective Chinese-made drywall has been handed down this week.

A federal judge in New Orleans has ordered a Chinese manufacturer to pay seven Virginia families a total of $2.6 million for damages to their homes attributed to drywall problems.

The decision is certain to impact pending lawsuits filed by thousands of homeowners around the country whose residences were badly damaged by leeching sulfur from inferior-grade drywall imported from China.

The Chinese drywall—used by many builders in recent years as a cheaper alternative to American-made product—has been linked to a host of problems by homeowners around the country, including corroded electrical wiring, appliance outages, rotting walls and personal belongings, as well as ill health caused by the acrid sulfur fumes.

Many of the damaged homes are in Florida, Virginia and throughout the Gulf region, where builders used the cheaper Chinese drywall to construct new homes following Hurricane Katrina and other storms. Law firm Seeger Weiss played a key role in the trial, which took place in February in New Orleans before U.S. District Judge Eldon Fallon of the Eastern District of Louisiana.

Seeger Weiss partner Christopher Seeger was appointed by Judge Fallon to the Plaintiffs’ Steering Committee and chairs a committee of national trial teams pursuing Chinese drywall cases.

Judge Fallon apportioned damages to seven Virginia families and is expected to rule again on another case involving a New Orleans homeowner whose post-Katrina residence was badly damaged by Chinese drywall. Mr. Seeger is also expected to begin trial in early June on behalf of additional homeowners in the Gulf region.

“Besides being the first judicial ruling in a Chinese drywall case, Judge Fallon’s decision is especially important because he ordered that homeowners be made completely whole for the extent of damages caused by this shoddy product – including repairs to wiring, heating and air conditioning, floors, closets, kitchen cabinets and other fixtures ruined by the drywall,” he said.

He noted that plaintiffs’ homes had to be completely gutted to remove any remaining traces of drywall and to correct widespread corrosion. In his 108-page ruling, Judge Fallon noted that Chinese drywall has a “significantly higher concentration of strontium and significantly more detectable levels of elemental sulfur” than drywall manufactured in the U.S. He further wrote that the “level of corrosive sulfur gases emitted by Chinese drywall…exceeded the safe level established by recognized standards.”

In addition to manufacturers, lawsuits have been brought against a number of firms associated with the faulty drywall, including developers and homebuilders, along with suppliers and distributors. Cases have been brought in both federal and state courts. Mr. Seeger noted that the federal Consumer Product Safety Commission recently issued an interim report on drywall issues that recommended many of the remedies proposed at trial

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