MANATEE — Chinese drywall is about to get its day in court.
The first contested trial in the product-liability saga is set to begin in a New Orleans federal courtroom Monday, an early test case that homeowners, homebuilders, insurance companies, manufacturers and lawyers are closely watching because of its potential implications.
In that case, Tatum and Charlene Hernandez contend Knauf Plasterboard Tianjin Co. Ltd.-produced drywall in their New Orleans-area home was “unsafe, defective and inherently dangerous.” The negligence and product-liability suit seeks property damages and reimbursement for replacing the drywall.
The case is among several hundred Chinese drywall lawsuits that have been consolidated into a single proceeding before a federal judge. The suits, many from Florida, contend the drywall emits sulfuric gases that have corroded electronics, air-conditioner coils and electrical wiring; lowered property values; and caused various health ailments such as sore throats, breathing difficulties and bloody noses.
The Hernandez’s suit was chosen to be a “bellwether” case, or a test trial focusing on limited issues within a larger, more-complex case. The trial’s focus is property damage and remediation. Future trials will determine the liability of insurance companies, the extent of personal-injury damages and other issues.
The trial’s primary goal “is to get a remediation protocol to guide future litigants,” said Scott Weinstein, a Fort Myers attorney who is on the plaintiff’s steering committee in the consolidated proceeding, but is not directly involved in the Hernandez case.
“This trial is intended to be guidance for the future,” he said.
Kerry Miller, the lead attorney for KPT in the Hernandez case, did not respond to interview requests.
Despite its limited scope, the bench trial — both sides agreed to go without a jury — likely will influence the future course of similar cases, legal observers said.
“The early cases usually set the tone for later cases,” said John Rains, an adjunct professor of construction law at Stetson University College of Law who is not involved in the drywall litigation.
The process will set compensation standards for various types of damage in different types of properties, thus making it easier to resolve the other cases.
While public attention will be focused on U.S. District Judge Eldon Fallon’s final decision in Hernandez, it’s the pre-trial legal maneuvering — especially over expert witnesses — that could have a greater impact on later cases, Rains said.
Attorneys on both sides in the Hernandez suit already are challenging the other side’s experts, court records show.
KPT contends plaintiff lawyers hired an unlicensed appraiser who used unproven methods to conclude the drywall has reduced the value of the Hernandez home by 10 percent to 40 percent. KPT also says another plaintiff appraiser hired to calculate the cost of replacing appliances, televisions, toasters and other household items was told to do so under the “extraordinary assumption” that its drywall damaged those items.
The company’s attorneys also want the judge to ban any reference to the drywall as being harmful, toxic or noxious.
In turn, plaintiff attorneys want to exclude four defense experts who contend, among other things, that most of a home’s metal components don’t have to be removed and replaced as part of a drywall fix.
The legal maneuvering is taking place because the stakes are huge: The cumulative cost of repairing U.S. homes with corrosive Chinese drywall could range from $8 billion to $10 billion, insurance publication National Underwriters recently estimated.
As one of the largest known Chinese drywall manufacturers in the legal case, KPT will seek to limit the extent — and thus, the cost and its liability — of required remediation.
“This is the first time they (KPT) have given themselves the opportunity to tell the whole world its theory” for remediation, Weinstein said.
For an earlier court hearing, KPT argued that an air-filtration system would work and that no drywall had to be removed from affected homes. But the company abruptly pulled out on the eve of the hearing when Fallon refused to consider the proposed fix, saying there wasn’t enough science supporting it.
Plaintiff attorneys, meanwhile, will argue this week that gutting homes to the studs is the best way to fix those with corrosive drywall. They will argue that KPT and other drywall makers should compensate homeowners for ruined electronics, living expenses while outside the Chinese-drywall home and other property damages.
The trial is expected to last about a week, Weinstein said.
