Judge orders Chinese drywall supplier to divulge details of $54 million settlement

By Alejandro de los Rios | Jul 27, 2011


A Florida circuit judge has ruled in favor of a group of plaintiffs that threatened to opt out of a $54 million Chinese drywall settlement over lack of transparency.

Broward County Circuit Judge Charles Greene ruled that Banner Supply Co. must disclose all the details behind the settlement reached in the U.S. District Court for the Eastern District of Louisiana in early July.

The settlement was reached between Banner and some 3,000 plaintiffs that claim the supplier sold them defective Chinese drywall.

The settlement was reached in the ongoing multidistrict litigation (MDL) brought on by more than 10,000 plaintiffs along the Gulf Coast claiming damages as a result of buying Chinese drywall.

Judge Greene has ordered Banner to comply with plaintiffs' requests for insurance coverage information and other financial documents.

After the settlement was announced, the office of Florida attorney David Durkee released a statement saying that his clients would be opting out of the settlement and pursuing their claims in state court if Banner doesn't disclose its financial information.

In a phone interview, Durkee said he's concerned the settlement monies would mostly come from Banner's insurers, as opposed to the supplier that actually provided the defective drywall.

"We want to see the financials from corporations who say that they can't pay," Durkee said. "They're gonna get through this Chinese drywall disaster and they're gonna get out paying a limited amount of money and that doesn't seem fair."

The plaintiffs claim that the Chinese drywall they bought and installed in their homes in the aftermath of Hurricane Katrina was defective, was made from toxic chemicals and led to corroding pipes and a rotten egg smell in their homes.

A press release distributed July 14 by Durkee's firm states that the plaintiffs opting out of the settlement "believe they each only stand to receive approximately $5,000 and will be left holding the bag for toxic homes rendered unlivable by the contaminated drywall."

Durkee said that Banner should not be allowed to walk away from its responsibility to homeowners that it sold defective drywall.

Durkee said that he and his clients "will continue to enforce our rights in the state courts," even if the settlement is approved.

"Others disagree with me, but in our firm we take the position that this is a state court matter," Durkee said. "It's a state court plaintiff, the majority is state court defendants; the builders, installers, distributors, are Florida defendants."

Durkee said going through each individual claim in state courts would be more efficient than going through the massive MDL taking place in New Orleans.

U.S. District Judge Eldon Fallon is overseeing Chinese drywall MDL.

Only the claims against Banner would be dismissed if the settlement were to be approved. There are still thousands of cases from across the Gulf Coast pending in Fallon's court.

Federal MDL 2:09-md-02047

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