Claims Against Taishan Continuing

This week, Judge Fallon heard arguments for and against certifying a class for damages against one of the Chinese manufacturers of corrosive drywall. The manufacturer is Taishan, a Chinese company believed to be mostly owned by the Chinese government. Recovering from Chinese companies has been extremely difficult for American consumers.

Litigation has been ongoing over the last six years, and Taishan has for the most part been an absentee party. Unlike homes with Knauf-manufactured drywall, where Knauf paid to remediate, homes containing Taishan drywall have been unremediated-unless the homeowner paid out of pocket for the repairs.

For more on the story, click here.

Taishan Indicates It Will Pay

Earlier this month at the monthly status conference for the Chinese Drywall MDL in New Orleans, representatives of Taishan Gypsum Company indicated to the Court that they would pay a judgment against the Chinese entity. The judgment dates to 2010, when the Court ruled that Taishan was liable for $2.6 million to fix the homes of the seven Virginia families. The seven families were plaintiffs in a bellwether case.

Taishan has never paid the judgment. While another Chinese drywall manufacturer owned by Knauf paid to remediate homes, Taishan filed multiple appeals and challenged the jurisdiction of the MDL Court. After the Fifth Circuit denied all of Taishan’s appeals, the company dismissed its lawyers and stopped showing up in court.

Last summer, U.S. District Judge Eldon E. Fallon, the presiding MDL judge, found Taishan in civil and criminal contempt of court, and barred the company, and its parent corporations, from doing business in the United States.

At the monthly status conference, when Judge Fallon was expected to hand down a judgment for the entire class of Taishan homeowners (potentially more than $1 billion in damages estimated by the amount paid out by Knauf) the company suddenly reappeared, along with a new set of lawyers from Alston & Bird.

It is estimated that about 4,000 houses nationwide were built with Taishan’s toxic drywall. The board emitts sulfur gases that corrode metal wiring and pipes, short-circuit electronics and can lead to numerous respiratory ailments.

Could this about-face signal Taishan wants to come to the table and fix the thousands of homes affected by its product? Could this be the beginning of the end for victims of Taishan drywall? I hope so, but it is too early to tell.

REGISTRATION DEADLINE FOR CHINESE DRYWALL CLAIMS FAST APPROACHING!!!

On March 27, 2013 the Honorable Eldon Fallon issued an Order governing the registration of claims for the 5 inter-related settlements involving Knauf drywall, and entities downstream from Knauf and their insurers.  A copy of the Order and the Registration Form are attached for your convenience.  Please note that the Registration Form is intended to be completed online. 

Further information regarding the Registration Form may be found on the Court’s website http://www.laed.uscourts.gov/Drywall/Drywall.htm, BrownGreer’s website https://www3.browngreer.com/drywall/, and at https://chinesedrywallclass.com.

Please note that there is a deadline of Saturday, May 25, 2013 to submit the Registration Form to register your client(s) in the settlement.  Since the title to the property must be submitted with the Registration Form, you should begin to collect them from your clients, if they are not already in your file.

If you are unsure if you should register, do so. We are registering all of our clients affected by Chinese Drywall-even those with Taishan board. In fact, I recommend registering even if you are not in the class of those folks who filed a claim on or before December 9, 2011.

 

 

 

New York Times Article on Latest Taishan Ruling

The New York Times published an article last week on the latest jurisdictional rulings over Taishan. It points out the difficulties in ever recovering from Taishan, a Chinese manufacturer. It also touches on a recent post I wrote regarding Federal legislation and the importation of Chinese-manufactured drywall. Click on the link below to get the entire story:

http://www.nytimes.com/2012/10/13/business/chinese-drywall-lawsuits-at-a-turning-point.html?pagewanted=all&_r=0

Judge Fallon Rules U.S. Courts Have Jurisdiction Over Taishan

Judge Fallon, the presiding federal judge over the Chinese drywall cases consolidated in an MDL, has refused to dismiss claims from homeowners against one of the major manufacturers of the toxic and corrosive product. Taishan Gypsum Co. Ltd. argued that U.S. courts do not have jurisdiction over claims against the Chinese company, but the Court rejected that argument.

Judge Fallon also refused to vacate a $2.6 million default judgment he entered against the company after it initially refused to respond to the suits. Taishan Gypsum manufactured and sold more than 1.8 million sheets of drywall that were shipped to Virginia, Florida, Louisiana and other parts of the U.S. from 2005 to 2009.

The company claims it did not know the ultimate buyer or user of its drywall in Virginia, but the 5th U.S. Circuit Court of Appeals has concluded that "such lack of knowledge does not insulate a foreign defendant from personal jurisdiction in the forum," Fallon wrote.

The judge said Taishan "possessed more than mere awareness or expectation that its drywall would be delivered, sold, and installed in Virginia." Fallon presides over more than 10,000 claims involving Chinese drywall. His ruling also could benefit homebuilders, brokers, sellers and installers who have been sued for using Chinese drywall and are seeking to recoup millions of dollars they have spent to repair damaged homes.

A different Chinese company, Knauf Plasterboard Tianjin Co., agreed in December to pay hundreds of millions of dollars to resolve related drywall claims. That company is in reality a German corporation who owns manufacturing plants in mainland China.

Chinese drywall was used in the construction of thousands of homes, mainly in the South, after a series of hurricanes in 2005 and before the housing bubble burst. The drywall contains unusually high levels of sulfur that emits foul-smelling gases, corrodes HVAC coils, copper pipes and electrical wiring, and tarnishes other metal items in the home. Homeowners also complain of aggravation of allergies, asthma, nosebleeds and other maladies.

The litigation against Taishan "has not followed the same trajectory or enjoyed the same measure of success" as the Knauf cases, Fallon wrote in his Order. Judge Fallon had to travel to Hong Kong earlier this year to supervise a series of depositions of Taishan executives after an initial round of depositions, hamstrung by a language barrier and other problems, dissolved into "chaos."

What does this all mean to the thousands of homeowners who have Taishan board in their homes? That answer is not at all clear. It is not yet known if Taishan will appeal the ruling. Taishan could ultimately ignore the Court’s ruling by not satisfying any monetary judgments against it, as many other Chinese manufacturers do in our country.

The problems created by Taishan’s legal tactics lead Senators Sheldon Whitehouse (D-RI) and Jeff Sessions (R-AL) and Representatives Betty Sutton (D-OH) and Mike Turner (R-OH) to introduce the “Foreign Manufacturers Legal Accountability Act of 2011” (S.1946/H.R.3646).  The bill would force foreign manufacturers to play by the same rules as American manufacturers by requiring foreign manufacturers to have a registered U.S. agent that would accept service of process for civil and regulatory claims.