Insured Dodges $72m Judgment By Unanimous Jury Verdict In MDL

Stacks of building material

Thompson Coe represented North River Insurance Company in a jury trial before Judge Eldon Fallon in the United States Federal District Court for the Eastern District of Louisiana wherein a unanimous jury in New Orleans found that the distributor of several hundred thousand sheets of Chinese-manufactured drywall did not know and should not have known that the drywall contained a defect which causes the drywall to emit sulphur gases that can corrode appliances, jewelry and other metals in a home. Under a pending class action settlement, an adverse judgment in the case would have resulted in a potential judgment against the insured of up to $72 million.

This was a bellwether trial against Interior Exterior and North River and is the only trial in the MDL to address the liability of a distributor of Chinese-manufactured drywall. The distributor’s primary carriers had previously tendered their limits in settlement. The jury verdict means that the distributor is a good faith seller under Louisiana law and is only liable for the replacement cost of the product, which is below the distributor’s primary limits of coverage. 

The case is styled Plaintiffs Steering Committee vs. Interior Exterior Building Supply and North River Insurance Company.