First monetary judgment in Chinese drywall litigation April 10, 2010

The multidistrict litigation in New Orleans has yielded a major development.  The initial trial’s aim was to determine the scope and nature of remediation for homeowners with defective drywall.

Judge Eldon Fallon awarded damages of $2.6 million Thursday to the owners of seven homes in Virginia, reported the Herald Tribune Friday.

It really cannot be emphasized enough how Judge Fallon’s decision may affect homeowners across the country.  It is no secret that thousands of homeowners in numerous states have reported to federal authorities the nature and symptoms of tainted drywall.

Judge Fallon is not presently hearing cases about health claims (as opposed to property damages, i.e., corrosion of appliances).  The Herald Tribune pointed out that he did comment on the possible health implications of tainted drywall – he stated, “[the tainted drywall is] . . . . clearly irritating and harmful to residents.”

This award of damages for the Virginia plaintiffs, while seemingly a large amount of money, is a small drop in the bucket when compared to all of the homeowners across the nations who are still seeking a remedy.

It only takes a bit of simple math to realize and appreciate the damage and devastation to homes that tainted drywall has inflicted in a monetary context; if almost three million dollars is the necessary remedy for seven homes, then the logical conclusion that follows is that since there are thousands of potential homes affected, then the nation-wide dollar damages must be enormous.   This leads to a concern that the trials have raised – how will the entities responsible pay for future judgments?  The Herald Tribune reported that Judge Fallon and some attorneys have suggested that if a foreign entity is unwilling to compensate those affected, one solution may be to seize U.S. assets as well as ships.