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Unless it is withdrawn, the judgment prevents Taishan Gypsum from defending itself in court against numerous suits accusing it and others of making defective drywall that was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