Under pressure from presiding Federal Judge Eldon Fallon, lawyers for homeowners and for Chinese drywall supplier Knauf Plasterboard Tianjin have agreed to a preliminary settlement of 300 cases of houses contaminated by the defective product. Plaintiffs' attorneys announced the settlement in a press release October 14. The full text of the settlement agreement is posted at the website of the United States District Court for the Eastern District of Louisiana ("Settlement Agreement for the Demonstration Remediation of Homes with KPT Drywall").
Under the agreement, crews will remediate 300 homes built with 95% or more Knauf drywall, applying the protocol specified by Judge Fallon in his decisions in earlier bellwether trials held to establish the basic facts of Chinese drywall. In a decision involving Chinese firm Taishan Gypsum Ltd, reported by the Sarasota Herald Tribune on April 9, Fallon had specified a complete replacement not just of the drywall itself, but of any other affected components of the home.
Under the terms of the October settlement, this same drastic remedy will be applied to 300 houses, with the ultimate goal being to develop procedures suitable for every house contaminated by the Knauf product, reports the Herald Tribune. "The pilot program ... runs lockstep with remediation guidelines established by Fallon in a series of decisions handed down this year," the paper reports. "They call for essentially gutting the home and rebuilding it to its former condition: replacing all drywall, wiring, copper pipes, the air-conditioning system, fire safety equipment and all damaged fixtures." Knauf appears to have dropped its earlier efforts to hold out for a less extensive repair job. In addition, the company has agreed to pay for temporary lodging for affected residents, as well as for damage to personal property inside the homes.
But as the Herald Tribune reports, questions remain about how the program can be expanded to include homeowners whose situations vary from the 300 relatively simple cases chosen for the pilot program. "For example," writes the paper, "what happens to people who have remediated their own homes, at considerable expense, with the hope of recouping those costs through the legal process?" Questions also remain about how Knauf will address empty or abandoned houses, whose owners have left because of the unpleasant smell, irritation, or health concerns. In many cases, particularly in economically troubled Florida, homes are subject to foreclosure (sometimes brought on because owners could not afford to pay a mortgage on an empty house, along with the rent on their emergency dwelling).
And, the paper points out, hundreds, possibly thousands, of houses have a mix of Knauf drywall and some other brand - perhaps domestic, perhaps from another Chinese company. Those houses aren't included in the pilot program, but any broader program will have to include them in order to fully address the damage created by the faulty material.
This article originally appeared in Coastal Contractor.