Chinese Drywall Homeowners Testify in New Orleans

Some Virginia homeowners who are plaintiffs in the first federal Chinese drywall trial gave testimony yesterday about the toll the disaster has taken on their lives. According to a report in the Associated Press, their testimony at times became emotional.

At least 3,000 people from across the country have filed suit over defective Chinese drywall. All of the Chinese drywall lawsuits filed in federal courts have been consolidated in the US District Court in New Orleans under Judge Eldon E. Fallon as part of a multidistrict litigation.

The first case in the multidistrict litigation involves seven Virginia plaintiffs whose homes have drywall manufactured by China-based Taishan Gypsum Co. It is considered a bellwether, or test case, and is expected to set a minimum threshold for fixing homes where defective drywall was installed. Blame is not at issue in this case because a default judgment has already been issued against Taishan Gypsum for failing to respond to lawsuits.

According to the Associated Press, Jerry Baldwin, 59, of Williamsburg, Virginia, testified that Chinese drywall in the home he and his wife purchased in 2006 appliances, electronics and the home’s air conditioning system. He and his wife can’t afford to move out he said, and the financial fallout from the disaster will likely mean he will put off his retirement.

Another homeowner, Lisa Orlando, told the court that they noticed a “baby diaper” smell shortly after moving into their Williamsburg home last year. Orlando’s family has moved out of their home, and are paying rent in excess of their mortgage.

William Morgan, also of Williamsburg, testified that he and his wife were forced to file bankruptcy last year, after their move to a rental home left them in a financial bind.

The plaintiffs are arguing that the only way to truly fix their homes is to gut them down to the studs. The costs calculated for remediation itself, based on bids solicited independently from two Virginia builders, averaged about $86 per square foot, or roughly $172,000 for a typical 2,000- square-foot home. The plaintiffs are seeking $2.5 million – about $1.2 million would cover remediation, with at least another $1.3 million for damages beyond the remediation.

Judge Fallon’s ruling is expected in a few weeks. However, if the plaintiffs are successful, they could still have trouble collecting against Taishan, since civil judgments in U.S. courts aren’t enforced in China. According to the Associated Press, plaintiffs lawyers said they will try to seize the company’s U.S.-bound vessels and shipments if the company continues to ignore the litigation.

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