Closing Arguments Made in Chinese Drywall Trial

Closing arguments were heard Friday in an important Chinese drywall trial underway in federal court in New Orleans. It will now be up to U.S. District Judge Eldon Fallon to determine how much a Chinese drywall manufacturer should have to pay to remediate the home of a Mandeville, Louisiana family that was built with 180 boards of Chinese drywall.

More than 2,000 families have claims pending in the Chinese drywall multidistrict litigation before Judge Fallon. Since late 2008, the Consumer Products Safety Commission (CPSC) has received about 3,000 reports from residents in 37 states, the District of Columbia, and Puerto Rico regarding defective Chinese drywall.

Last week’s proceedings marked the first contested Chinese drywall lawsuit to go to trial, and was considered a bellwether, or test, case. Chinese drywall manufacturer Knauf Gips and Knauf Plasterboard Tianjin Co. were named lead defendants. The lawsuit was filed on behalf of Tatum and Charlene Hernandez of Mandeville, Louisiana. The case was heard by Judge Fallon without a jury.

While defendant Knauf acknowledges that its drywall was defective, the company disputes the amount of money the Hernandez family is seeking for remediation of their 1,688-square-foot home. The plaintiffs are seeking $200,000 to replace drywall, moldings, carpets, a granite countertop, electrical switches, wiring, appliances and personal property. However, Knauf maintains that the remediation needed will only cost $58,000, and disputes that drywall fumes ruined wiring, plumbing and appliances.

It will be up to Judge Fallon to determine the nature and the scope of the remediation and the cost of repairs. Questions of health issues from the drywall will be handled in a later phase of the litigation.

A decision on what needs to be done to fix the Hernandez home and how much it will cost could help establish values that will guide settlement discussions in the rest of the cases.

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