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$248M Settlement Reached with Chinese Drywall Maker

The product allegedly gave off sulfur fumes that caused illnesses and corroded metal in appliances, A/C equipment, wiring and plumbing fixtures.

Dry Wall
Bill Tiernan/The Virginian-Pilot via AP

NEW ORLEANS (AP) — A proposed $248 million settlement has been filed in a decade-old federal court case over defective Chinese drywall blamed for damaging home appliances and sickening residents. 

The proposed settlement between property owners and Taishan Gypsum Co. was filed in U.S. District Court in New Orleans on Tuesday. It comes nearly eight years after a major settlement in another case involving a different Chinese company, Knauf Plasterboard Tianjin Co., and in the wake of other settlements with various homebuilders, equipment suppliers and installers who used the material.

All of the litigation arose from the use of defective drywall in thousands of homes between about 2005 and 2008. The product was alleged to have given off sulfur fumes that corroded metal in appliances, air conditioning equipment, wiring and plumbing fixtures. In some cases the fumes were blamed for illnesses.

A committee of attorneys for the property owners in the Taishan case said in a news release that most of the residences involved were in Florida, Louisiana, Alabama, Mississippi and Virginia. Attorneys have asked U.S. District Judge Eldon Fallon for preliminary court approval of the settlement, pending further reviews, public notice and a subsequent "fairness hearing" expected later this year. 

"If the court approves it, thousands of homeowners affected by Taishan drywall will finally get much needed payments from Taishan," Arnold Levin, lead counsel for a committee of the plaintiffs' attorneys in the case, said in a news release.

The settlement would end years of litigation that at one point resulted in Taishan facing a contempt judgment from Fallon for failing to appear in court in 2014. Taishan rejoined the case the following year and the settlement includes an agreement that both sides will ask the judge to purge the contempt judgment from the record.

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