Mississippi Litigation Review & Commentary : Mississippi Personal Injury Lawyer & Attorney : Phillip W. Thomas Law Firm : MS Litigation Review & Commentary

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This week in the Chinese drywall litigation Judge Eldon Fallon entered a default judgment against one of the manufacturers:

A Chinese drywall manufacturer that didn’t respond to a class-action lawsuit has been found in default, an early legal victory for homeowners who blame the product for various health problems and property damage.

During a pre-trial hearing in New Orleans on Thursday, U.S. District Judge Eldon Fallon issued a default judgment against Taishan Gypsum Co. Ltd., court records show. The company failed to respond to a lawsuit filed by an Alabama home builder despite being notified of it in late June, the judge said.

Unless it is withdrawn, the judgment prevents Taishan Gypsum from defending itself in court against numerous suits accusing it and others of making defective drywall that was installed in U.S. homes.

Here is a link to the quoted article. Woo hoo!! Plaintiffs Win! Plaintiffs Win!   Not so fast sparky.

In a case like this a default judgment is a bad thing for the plaintiffs. The manufacturer is turning its back on the plaintiffs and basically saying that the plaintiffs will not be able to collect on the judgment. I've read somewhere that plaintiffs' attorney Russ Herman said that they will seize ships that carried the drywall in order to collect. I wouldn't bet on it. The article points out that the Chinese government owns Taishan Gypsum. Somehow I don't see the U.S. allowing an international incident by Mr. Herman seizing ships to satisfy money effectively owed by the Chinese government. Here is an article that does not sound optimistic about the prospects of recovery.

Here's an idea. The U.S. is up to its eyeballs in debt owed to China due to the trade imbalance. Maybe Congress could pass a law authorizing the U.S. government to reimburse the victims of the Chinese drywall and then deduct the amounts from what we owe China. Is this feasible? I have no idea. But it may take this kind of creative thinking for the victims to receive compensation.

Here are my prior posts on Chinese Drywall litigation.

Here is an excellent post from the PopTort Blog explaining the litigation.

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As if the Chinese Drywall situation could not have gotten worse for some Katrina victims, there is this report: 

The latest concerns about Chinese drywall focus on reports that radioactive substances may have been included in the imported product.

The article states that there will be more tests to determine the extent of the problem.

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Two new articles on the Chinese Drywall fiasco. This Wall Street Journal article states the obvious:

 The odors, respiratory complaints and corrosion blamed on drywall from China used in American homes may have been caused by the failure to remove sulfur and other contaminants from synthetic gypsum, some Chinese experts in building materials say.

I thought we already knew that sulfur in the drywall was the problem. On a more helpful note, the article list the symptoms suffered by some people with the Chinese Drywall in their new homes:

Homeowners who believe they have Chinese-made drywall have complained of itchy eyes and skin, runny noses, nosebleeds, headaches and asthma attacks, among other things. Patricia Williams, a toxicologist at the University of New Orleans hired by lawyers for some of the homeowners, says tests indicate they are being exposed to a variety of chemicals, including carbon disulfide, sulfur dioxide and hydrogen sulfide.

Some of these are people who lost their house in Katrina, so things have gone from worse to worse for them.

Another new article in the Kansas City Star points out that holding the Chinese manufactures liable in American Courts is difficult:

While everyone involved is likely to be sued - installers, contractors, distributors, importers and Chinese manufacturers - the last are the hardest to reach by far.

For starters, suing a Chinese company in a Chinese court isn't a good idea for most American plaintiffs, said Michael Lyle, a seasoned international lawyer. "It's like suing Michael Jordan in Chicago."

Yet many Chinese manufacturers also evade trial in the U.S. simply by persuading judges that their companies had no substantial business presence in the states in which they've been sued. That's not hard for Chinese manufacturers, which typically rely on independent importers to sell to the American market.

 This will make plaintiff lawyers focus suits on American distributors.

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The New Orleans Times-Picayune is reporting that the Judicial Panel on Multidistrict Litigation has instituted an MDL proceeding in New Orleans for all Chinese Drywall cases pending in federal court. The presiding judge will be Judge Eldon Fallon, who also presided over the Vioxx MDL. Chinese drywall cases involve homes built with drywall containing sulfur, which smells horrible.

In most cases defendants like having an MDL and plaintiffs hate it. While the litigation may be more efficient in an MDL from a global perspective, it usually slows down individual cases. I previously posted about a Chinese Drywall class action filed in Mississippi by Ocean Springs attorney Steve Mullins in this post. The Times-Picayune article did not mention any Mississippi cases, but all federal court cases will be transferred to the MDL. 

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The Sun-Herald has a story today on a lawsuit filed in federal district court in Gulfport alleging defects in drywall installed in homes. Steve Mullins of Ocean Springs filed the case on behalf of Christopher Whitfield of Picayune. The case is a class action and the class is defined as all persons who own a home in the State of Mississippi which was built using Defendants' drywall. Here is a copy of the Complaint, which I obtained from Steve Mullins.

The case appears to be based on similar cases filed in Florida.

The lawsuit charges that many homes in Mississippi also contain the drywall and it names “Knauf Gips, Knauf Tianjin and Taishan, and possibly other unknown Chinese manufacturers” as defendants.

In class-action lawsuits the company has been accused with others of selling a faulty product that has allegedly affected tens of thousands of homeowners, predominantly in Florida. Some have complained of respiratory problems, electronic devices inexplicably breaking down and a strong odor like rotting eggs in their homes, indicative of the release of sulfur. The sulfur smell is usually present, along with black deposits in bare copper wires, black deposits on the HVAC copper, changes to finishes on mirrors, pitting of chrome and other objects and light switches that pop or have visible discharges.

Living in a home with a constant sulfur smell would be horrible. This could turn into a big piece of litigation depending on the number of homes in Mississippi with the drywall and whether the Chinese manufacturer actively defends the case.