Attorney Gary E. Mason Discusses Recent Activity in the Chinese Drywall Litigation

September 8, 2010, 8:00AM. By Jane Mundy

Washington, DCAttorney Gary E. Mason can attest to the fact that the Chinese drywall litigation isn't cut-and-dried. "At the August status conference, US District Court Judge Fallon said the case was 'rapidly approaching the end game,' says Mason. "Fallon announced that a mediation was scheduled for August 24. The participants would include representatives from the plaintiffs' steering committee, the Chinese drywall manufacturer Knauf Tianjin Plasterboard and representatives of the various suppliers, builders and insurers. Fallon appeared to be optimistic that mediation would be successful."

Although Mason doesn't yet know the outcome, he is pleased with results so far: litigation is ongoing and it appears that there will be some resolution, at least with homes that have Knauf drywall.

But what's the situation with homeowners who want to participate in a settlement but don't have Knauf drywall, or those whose homes are partially damaged by toxic drywall? According to Mason, it's hard to say.

"Even If their entire home were built with Knauf drywall, we still don't have agreement on the requirements for eligibility to participate in the settlement, if in fact there is a settlement, but my expectation is that there will be a settlement. If you are eligible, a contractor will come to your house, remove the drywall and replace it. You will also receive compensation for moving and relocation costs during this process."

Jury Trials

In the meantime, Judge Fallon is pressuring other defendants to set cases for trial. "The dates have not been set yet, but Fallon is working towards jury trials," says Mason. "He has previously held bench trials and heard the evidence himself; now Fallon is trying to schedule jury trials where the defendants would be home builders and Banner Supply Co., which is the biggest supplier of drywall in the state of Florida."

Lowe's Settlement

The recent Lowe's settlement doesn't sit well with Mason. "This settlement was intended to resolve the claims brought by anyone who bought drywall from Lowe's, but it stirred up a lot of controversy in front of Judge Fallon," he explains. "It is a problematic settlement because it includes both domestic and Chinese manufactured drywall. A proposal has been made that the Lowe's settlement class only include domestic drywall and exclude Chinese drywall. This would mean that anyone who shows up in the Lowe's settlement with Chinese drywall can still bring action against Lowe's and anyone else.

"Personally, I think Lowe's overreached and many of its customers did not purchase Chinese drywall. Like any defendant, Lowe's wanted to have as much protection as possible, but they have now made it difficult to settle. Lowe's should limit the settlement to domestic drywall. If it did, the company could proceed with finalizing the settlement in the Georgia state court where the case was filed.

"We have a few Lowe's clients but frankly we don't think they have Chinese drywall. Sometimes it's hard to tell what drywall was used in a house because a lot of drywall is unidentifiable. A settlement like this is controversial: there are many issues regarding who sold the drywall, who supplied it, etc. Obviously it's not going to be cut-and-dried."

Last June, Mason discussed some Chinese drywall cases which were subsequently resolve on the eve of trial. "We know that Knauf is going to repair these homes, but the devil is in the details and the final Knauf settlement with these homeowners has not been disclosed.

"In June a resolution was announced but the actual settlement papers are still being worked on. Perhaps what will ultimately emerge is not just a written settlement between Knaupf and these several homeowners, but a larger global settlement as well."

Stay tuned…

Gary E. Mason specializes in consumer class actions and mass torts. Mason LLP is a civil litigation firm whose attorneys have served as Lead Counsel or Co-Lead Counsel or members of Litigation Committees on numerous class action cases, including In re Chinese Manufactured Drywall Products Liability Litigation, MDL. 2047 (E.D. La.). In the past 19 years, Mason has recovered more than $1.5 billion for the plaintiffs he represents.