Landmark drywall suit settled

A landmark settlement in toxic drywall cases was reached today, one that may  bring relief to thousands of homeowners and put an end to hundreds of state and federal cases filed against insulation manufacturers.  

Judge Eldon  Fallon, United States District Court in New Orleans, presided over a consolidation of cases involving Chinese imported drywall that homeowners claimed have created a toxic atmosphere in their homes. In today’s announcement, the. Plaintiffs' Steering Committee (PSC) and Knauf Plasterboard Tianjin (KPT) jointly agreed on terms that will put an end to all future litigation against Knauf and its subsdiaries.

The settlement is intended to cover all plaintiffs in the drywall litigations in both federal and state court whose homes or businesses have KPT drywall. Approximately 5200 plaintiffs have specifically alleged that their homes contain KPT drywall; of these, approximately 2700 have submitted in some form evidence of the presence of KPT drywall. Plaintiffs include homeowners, commercial owners and tenants, as well as multi-unit properties and prior owners of foreclosed properties or those who have engaged in short sales due to the presence of KPT drywall.

The Remediation Fund has three options:

Program Contractor Remediation Option. The Program Remediation Option provides the class member with the convenience of having Moss & Associates, who has been approved by the PSC and the Knauf Defendants, remediate the class member's property. For more information on the drywall remediation program, please visit:

Self-Remediation Option. The Self-Remediation Option provides the class member with the choice to select his or her own qualified contractor to remediate the property

Cash-Out Option. The Cash-Out Option provides a cash payment with no obligation to remediate the property but the amount of cash will be less than the amount that would be expended under the two remediation options and the homeowner must take steps to assure, among other things, notice to subsequent purchasers of the presence of KPT drywall.

The scope of the remediation repair will cover all affected drywall, and with limited exceptions, unaffected drywall, will be removed from the home, and replaced with domestic drywall; the electrical wiring, smoke alarms, fire alarms, and other safety systems will be replaced; and the parties have agreed on a protocol for replacement of built-in appliances, such as refrigerators and microwaves.

Moving and storage expenses will be covered under a stipend to cover the costs of moving and storage, during the remediation, and to pay for damaged personal appliances.

The settlement ultimately is subject to final approval by Judge Fallon, pending a fairness hearing that will be scheduled in 2012.

Professor Stephen Saltzburg, a law professor at George Washington University Law School, and an expert in mass tort settlements, reviewed the settlement terms, stating that "the settlement is a very creative solution to a very complex problem." He added, "The plaintiffs received complete remediation – all costs covered – with no reduction in plaintiffs' recovery for attorneys' fees or costs. It is unlikely that plaintiffs will do better in separate litigation. It is, in short, a settlement that appears fair, comprehensive and just."


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