Brian Martin, Kevin Risley, Diego Garcia and Suzanne Patrick of the Houston Office obtained a significant trial victory in the Chinese-manufactured drywall MDL. A unanimous jury in federal court in New Orleans found that a distributor of several hundred thousand sheets of Chinese-manufactured drywall did not know and should not have known that the drywall contained a sulfur defect which causes the drywall to emit sulfur gases that can corrode appliances, jewelry, and other metal items in a home. This bellwether trial has been the only trial in the MDL to address the liability of a distributor of Chinese-manufactured drywall.
Thompson Coe represented the distributor’s excess carrier, who was named as a defendant in the lawsuit under the Louisiana Direct Action Statute. 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. Under a pending class action settlement, an adverse judgment in the case would have resulted in a judgment against the insured of either $36 or $72 million.