People, desperate and looking for any answer to their problems with tainted drywall, are rejoicing over the mere announcement that Knauf Plasterboard (Tianjin) Co., Ltd. (KPT)—one of the Chinese drywall manufacturers involved in recent defective drywall complaints—has offered to accept service of process of an omnibus class action complaint. This will allow claimants with KPT drywall to consolidate their claims in one lawsuit against KPT.
All this means is that the litigation can proceed without worrying about going through the Hague Convention, which sets forth the method for the service of process abroad.
The Hague Convention for the Service of Process Abroad requires claimants to pay approximately $15,000 per lawsuit, which allows for the translation of legal documents into Chinese and to have them presented to the appropriate authorities in the Peoples Republic of China to obtain service on the Chinese drywall manufacturers.
The plaintiffs should understand that they have simply advanced to the stage whereby a would-be defendant says, "You don't like it, then sue me!" Real progress would be if KPT were to meet directly with affected homeowners, and offer to actually do something about their problems.
Nearly always, litigation is a substitute for doing the right thing, and this case is no exception.
The problem with any lawsuit against KPT is that the Chinese government will surely have something to say about it, and will likely delay any substantive settlement for a long time. Moreover, as the class increases in size, the recovery by the individual plaintiffs will be negligible. The lead attorneys will probably make some money, but even for them, nothing is assured in this type of action.
Clearly, the only answer is a government bailout, and fortunately for the homeowners, there is a very good precedent for this.
Utah senator Orrin Hatch created a lifetime seat for himself with the Radiation Exposure Compensation Act (RECA)—passed in 1990. RECA provides for money (typically $50,000) to be paid to victims of certain cancers, who simply have to prove that they lived in a list of counties during a particular time period. RECA was based on the completely fictitious notion that nuclear testing in the 1950s produced cancer in people who lived downwind of the blasts.
RECA has paid out over $1 billion so far, and has produced bountiful results for many Utah-based politicians. Few people know that since 1950, Utah has had one of the lowest cancer mortality rates in the country. Moreover, Washington County—supposedly ground zero for the fallout—has one of the lowest cancer mortality rates in the state.
I cite RECA as being a good precedent for tainted drywall affected homeowners because the payout criteria are extremely loose. Many people who lived in the affected counties in the 1950s, and got leukemia 50 years later (which by all rational medical analysis could have nothing to do with exposure so long ago), were cheerfully handed the big checks.
Thus, given the difficulty of really proving health effects, a RECA type approach could have wide-open criteria. KPT and others could be encouraged to donate to the victims fund, and that would save time and effort otherwise spent with pointless litigation.
The affected homeowners should lobby their senators, and beware of lawyers bearing gifts.