Court partially grants homeowners' request in toxic drywall case

By Takesha Thomas | May 20, 2019

NEW ORLEANS – A district court has ruled that homeowners whose homes were damaged by toxic drywall imported from China may recoup some of their financial losses. 

On May 3, U.S. District Judge Eldon E. Fallon granted, in part, a request filed by a Plaintiff's Steering Committee (PSC) to apply the remediation damages formula in the nationwide case. In doing so, homeowners whose homes were damaged by the faulty drywall and remediated their property prior to selling it could file the claim for damages. 

However, the court also denied a request to file claims for homeowners who did not remediate their properties prior to selling. 

According to an October 2009 NPR article, some 100,000 homes in more than 20 states were built with toxic drywall imported from China. The drywall is said to release emissions that corrode plumbing and electrical systems in homes. Homeowners have also reported headaches and respiratory ailments, according to the report. 


U.S. District Judge Eldon E. Fallon   Wikipedia

"Because remediating the home prior to sale or foreclosure likely would have restored the home’s value, the cost of remediating that property informs the Court’s analysis of its diminution damages," Judge Fallon said in his finding. "Thus, with respect to homes that were sold without first being remediated, the Court concludes the remediation damages calculation shall serve as a rebuttable presumption of a prior owner’s diminution damages."

Attorneys for the PSC argued that an April 2017 court order for determining remediation damages in the case should be applied for these former homeowners. Attorneys for the Chinese drywall company had also argued that "the make-whole analysis for current owners, who can use the estimated repair costs to restore their properties, is much different than the analysis needed for former owners, who no longer have property to repair."

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