Chinese Drywall Class Action Suit Results in Substantial Settlement

The hurricanes of 2004 and 2005 account for an unprecedented increase in the construction of new homes between 2006 and 2007 in 43 states, the District of Columbia, American Samoa and Puerto Rico. Since that time, the Consumer Products Safety Commission received nearly 4,000 reports of illness related to defective drywall from China. These reports initiated a federal investigation of the problem drywall involving the U.S. Department of Housing and Urban Development, the U.S. Centers for Disease Control and Prevention and the U.S. Environmental Protection Agency.

While the federal agency findings revealed relatively low health effects and corrosion of only certain items caused by the drywall, Business Wire reported a 2011 settlement that can result in up to a billion dollars for affected homeowners. The deal requires Knauf Plasterboard Tianjin Co. to set up a fund to pay the full costs to repair about 4,500 properties in Florida, Louisiana, Mississippi and Alabama. The agreement also requires the company to set up a fund for no more than $30 million to address other issues, such as respiratory problems reported by many homeowners.

Unfortunately, the settlement does not include the thousands of homeowners experiencing similar issues with their homes because Knauf is only one of several companies connected with the defective materials. While many owners obtained local property tax relief, they do not benefit from the Knauf settlement.

While it can take years to decide or settle product liability cases like the Chinese drywall suit, victims injured by defective products can ultimately receive substantial benefits for their efforts.