Settlement Reached in Chinese Drywall Litigation in Florida, Virginia, Louisiana

Workers move sheets of drywall at a wholesale market in Shanghai, China, on Monday, Oct. 26, 2009. The U.S., which has halted imports of drywall from China, is testing the products and working with the Chinese government on the investigation. Photographer: Kevin Lee/Bloomberg

A notice in Florida and Virginia federal courts might signal the conclusion of about 10 years of litigation over Chinese drywall.

The joint notice for a proposed confidential settlement among Florida, Virginia and Louisiana homeowners and Chinese companies Taishan Gypsum Co. Ltd. and Beijing New Building Materials was filed in the Southern District of Florida and the Eastern District of Virginia. It notes the parties entered mediation on May 22 and 23 to resolve lawsuits over alleged financial losses and illnesses caused by sulfur emissions from drywall exported to the U.S. from China.

According to an amended version of the motion entered Saturday, the parties are requesting the court to allow for a 21-day stay of litigation — barring a lone June 5 hearing — in order to resolve any remaining issues requiring redress through the settlement.

“If the parties are able to reach agreement on a joint proposal, they will submit it to the court as soon as practicable in advance of the June 5th hearing,” the motion said. “If the parties do not reach a settlement agreement by June 14th, or otherwise apply to extend the stay, the stay will automatically be lifted.”

The filing continued, “The parties request the stay not to delay this matter, but to focus their resources on the resolution of this complex and protracted litigation. Additionally, in order to efficiently coordinate the approval of the settlement agreement across the various courts, the parties seek the courts’ guidance and request a joint status conference with the courts to discuss the same.”

Read the notice of a proposed settlement: 

Interim lead counsel for the plaintiffs, Colson Hicks Eidson partner Patrick Montoya, expressed enthusiasm over the progress made in the proceedings.

“I am bound by confidentiality not to discuss the terms of the proposed settlement, except to say that we are pleased for the thousands of victims of Chinese drywall that there may be a resolution to this case after 10 years of litigation,” the Coral Gables attorney said. “We are grateful to the defendants and their counsel for negotiating what we believe to be a fair resolution of the case.”

Legal counsel for Taishan is Enjoliqué Aytch with Akerman, while Beijing New Building Materials’ counsel is Aballi Milne Kalil partner Craig Kalil. The attorneys did not respond to requests for comment by press time.

The contentions at the center of the litigation have lingered in American courtrooms since 2009, when an initial complaint was served against Taishan using the Hague Convention agreement concerning the service of judicial documents in international civil and commercial disputes. After failing to respond to the legal action, Taishan retained legal counsel in the U.S.. but only after default judgments were entered against the company. The company and Beijing New Building Materials have since been locked in an ongoing quagmire of class actions and multi-district litigation, further complicated by the international nature of the conflict.

As noted in a motion filed by the plaintiffs in the Southern District of Florida, there are approximately 1,700 claims concerning damages originating from Chinese drywall in Florida alone.

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