Chinese Drywall Trial|Goes to the Judge

NEW ORLEANS (CN) - The Chinese manufacturer whose defective drywall "shattered the dreams" of a young family by corroding plumbing and wiring should pay to restore the house, the family's attorney said in closing statements Friday in Federal Court. "Let's just give them the house that they had, that they built until they installed the defective Chinese drywall," the attorney said.

Chris Seeger, representing Tatum and Charlene Hernandez, asked U.S. District Judge Eldon E. Fallon to approve a $200,000 remediation plan for the home.

Attorneys for Knauf Plasterboard Tianjin Co. said $200,000 is too much to ask, and disputed the claim that gases emanating from the drywall ruined wiring, plumbing and appliances. Knauf proposed a remediation plan costing $58,000.

"They are not entitled to costs beyond what is required to restore the house to its original condition," Knauf attorney Donald Hayden said, after expressing sympathy for the Hernandezes' ordeal.

But Hayden added, "They want $200,000 for a house that was built for $175,000 in 2006."

Attorneys for both sides agreed that Knauf should remove all 180 drywall panels installed when the house was completed in 2006.

Seeger said that while there is not a "ton of evidence" that wires and circuit boards will continue to corrode once the drywall is removed, they might. He asked the judge to err on the side of caution.

This was the second test trial against a Chinese manufacturer, alleging that corrosive gases leaked from drywall. It is part of multidistrict litigation to help determine property damage issues in similar cases.

More than 2,100 people nationwide have filed federal claims for faulty drywall. The Hernandezes' trial lasted one week.

Homeowners' insurers have virtually unanimously refused to cover claims for corrosion from Chinese drywall, leaving homeowners to fend for themselves.

In Louisiana, because of a 1996 pro-business law pushed by then-state Rep. (and now-U.S. Sen.) David Vitter, homeowners suffering damages from Chinese drywall have no remedy other than suing the manufacturers.

"We threw the consumer under the bus, under the purview of, 'Hey, this will attract business to Louisiana,'" state Sen. Julie Quinn told the Times-Picayune. "We say, 'Sorry, you're going to have to sue the manufacturer in China.' That puts people in Louisiana at a huge disadvantage. ... All we did was hurt the consumer.'"

Tulane Law School Professor Alan Childress told the newspaper that under litigation rules before the 1996 pro-business reform, even if a company played only a small role in harming consumers, it could be held responsible for 100 percent of the damages. That party, in turn, could sue companies further up the chain.

Today, the only course of action for the homeowners is to go straight to the Chinese manufacturers. Knauf Plasterboard Tianjin Co. is one of only a few Chinese manufacturers that responded to complaints from U.S. consumers.

Proponents of the 1996 tort reform said the old system was unfair. But those working with consumers on Chinese drywall issues today say the old system could have provided consumers the money they need to rebuild, while leaving the manufacturers to settle with each other. And, they say, the old system provided more incentive for companies to be sure they sell safe products.

Under the present system, Childress said, companies must pay the portion of the fault assigned to them. If the court decides the Chinese manufacturers are responsible for 80 percent of the drywall problem, while the U.S. companies that handled the product are responsible for 20 percent, and the plaintiffs sue only the Chinese manufacturers, they can recover only 80 percent of their losses.

Childress told the Times-Picayune in September, "If for some reason I can't collect money from there, I'm out of luck because I can't look to the other defendants to pick up the slack." Childress called the 1996 legislation "a very pro-defendant, pro-corporate change in the law."

The Louisiana Association of Business and Industry says the federal government should bail out homeowners since it allowed the faulty drywall into the country.

Last week, Florida Gov. Charlie Crist asked FEMA for emergency disaster assistance for homeowners whose houses have been ruined by Chinese drywall. FEMA has said it will not offer help.

Judge Fallon's ruling is expected in April.

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