Chinese Drywall Company Taishan Gypsum Reaches First Settlement

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The Chinese company Taishan Gypsum has reached the first of many expected settlements in multidistrict litigation concerning toxic chemicals found in drywall it sold to U.S. homeowners.

Sunday, March 29, 2015 - Chinese drywall manufacturer Taishan Gypsum has a greed to pay $3.2 million to homeowners affected by the company‘s defective drywall. This stands as an about face for Taishan Gypsum, which had been avoiding U.S. courts for years while claiming that America‘s juristidction did not encapsulate their company‘s dealings. The award is the first of many expected to follow for thousands affected by the tainted drywall products.

The initial complaints from which the case was built focused on the defective drywall sold to U.S. homeowners by Taishan Gypsum. A good proposition of these homeowners were rebuilding in the wake of Hurricanes Katrina and Rita, which caused a large spike in the demand for remolding and building supplies. The building materials were eventually discovered to be toxic and harmed thousands throughout the Southeast and Gulf Coast regions of the U.S. Roughly 4,000 houses in the country were affected by poisonous Taishan Gypsum products.

The products produced and sold by Taishan Gypsum contained toxic sulfur gas, which caused respiratory problems for the home dwellers as well as compromising much of the drywall and the areas around it. The gasses could damage pipes and electrical wiring, quickly driving down the value of plaintiffs‘ homes. One case claimed its home value dropped from $800,000 to $390,000 when it had to be sold. Plaintiffs claim that Taishan Gypsum knew the materials were unsafe, and attempted to sell them to America recklessly in order to profit on the wreckage left by the hurricanes.

The seven cases that are receiving the settlement from Taishan Gypsum were all a part of bellwether trials that took place in earlier litigation and had the bellwether judgment made concerning their lawsuits finalized last year by a higher court. Following the bellwether trials, a federal judge in New Orleans ruled that the drywall company should be held liable for the damages done to plaintiff‘s homes to the tune of $2.6 million. However, Taishan Gypsum.

However company officials from Taishan Gypsum claimed that they were outside of U.S. jurisdiction and declined to appear in court or comply with the rulings given by federal courts. The company was held in contempt of court after refusing to show up fo a hearing, and U.S. District Judge Eldon Fallon ruled that Taishan Gypsum‘s business in the U.S. would be suspended until the company agreed to appear in court. Taishan Gypsum finally agreed to participate earlier this month, reentering the litigation with a $40,000 fine from the contempt of court charge.

The recent agreement to pay the $3.2 million was not entirely expected at this point in litigation, which is still underway for most clas members involved in the lawsuits. Plaintiffs were surprised with the settlement secured for them in the proceedings, and this move give hope to the thousands of Gulf and East Coast homeowners included in the rest of the MDL.

Knauf Plasterboard Tianjin, another manufacturer that sold defective building materials en masse to the Gulf Coast settled similar claims against the company for $1 billion in 2012. The final settlement in the Taishan Gypsum lawsuits is expected to reach that total as well if not exceed it.