Source: http://hamptonroads.com, March 20, 2015
By: Sarah Kleiner Varble
A Chinese drywall case with a “long and tortured history” took a dramatic turn this week when the manufacturer of toxic imports pledged to pay a 5-year-old debt to seven Hampton Roads families.
Taishan Gypsum Co. Ltd. was ordered by a New Orleans judge in April 2010 to pay $2.6 million, but the company has ignored the judgment and repeatedly failed to appear in court. Eventually, the judge found it in civil and criminal contempt of court.
More than 10,000 homes were built with defective drywall during the housing boom of the mid-2000s. Corrosive gases seeped from the walls, destroying appliances, metals and electronics and causing a host of ailments.
Attorneys for Taishan told a judge on Tuesday that fear of the American court system kept the company from appearing during the past five years.
“Our client had dug a deep hole, a deep ditch, but our client is prepared to walk out of that ditch and back into this litigation,” said Bernard Taylor of Atlanta-based Alston & Bird LLP, one of nine newly hired attorneys who represented Taishan and two affiliated companies at the hearing.
Messages left with five of the attorneys were not returned Thursday.
Attorneys for the seven families – who represent about 4,000 homeowners across the country – were skeptical when Taylor told the court that Taishan intended to pay the judgment. So was District Judge Eldon Fallon, who presides over U.S. District Court for the Eastern District of Louisiana.
“Would you guarantee it, as a firm, that they will pay?” Fallon asked, according to a transcript of the hearing.
“Well, I can guarantee, your honor, that it has been fully represented to us by our client that they will pay,” Taylor said.
Fallon responded: “See, they did that before, though. That’s the problem I have.”
At the hearing Tuesday, attorneys for families affected by the drywall said Taishan should not be allowed to participate in discussions about damages to be awarded to the thousands of other members of the class-action suit – which could amount to $1.3 billion or more – unless it pays the $2.6 million judgment and attorney’s fees.
Attorneys for the plaintiffs said Wednesday via email it would be “inappropriate to comment.”
At the Tuesday hearing, Fallon gave Taishan two weeks to comply. He also ordered the company and its affiliates to work with the plaintiffs’ attorneys over the next five weeks, after which a hearing will be held to discuss damages to be awarded to the rest of the class.
Fallon said he will move quickly because the families have been waiting years for restitution. He described the case as having “a long and tortured history,” according to the transcript.
“Some of these individuals have been and, as far as I know, still are living in tents in their backyard because they can’t abandon the house,” he said. “If they abandon the house, their insurers have told them that they are going to cancel their fire insurance. So they live in the backyard and run in and out of the house to use the bathroom facilities.”
Liz and Steve Heischober are among the seven families who have been waiting for Taishan to compensate them for the loss of their home. They were planning to live out their days in a three-story duplex a block from the Atlantic Ocean in Virginia Beach’s North End.
But hydrogen sulfide in their walls was destroying air conditioning units, televisions, computers, jewelry and faucets. Liz became fatigued, and Steve wound up with rashes. Both suffered depression.
They raided their retirement accounts to buy a smaller home a bit farther from the beach.
As for the potential payment from Taishan, Liz Heischober was cautious.
“I will believe it when I see it,” she said.