Chinese drywall maker loses another court ruling

NORFOLK

Different day. Different court. Same result.

A Norfolk Circuit Court judge entered a default judgment against the Chinese manufacturer that produced the tainted drywall that made some local homes unlivable.

It's the second ruling in two days against Taishan Gypsum Co. Ltd., which sold more than 150,000 sheets of drywall to a Norfolk construction supplier in 2005 and 2006.

Federal product-safety regulators have found that the drywall emits gases that corrode metal in homes and recommended it be removed.

The hearings this week mark the first appearances by the Chinese company in local courts.

While a hearing Wednesday in Virginia Beach Circuit Court involved one couple that sued over the tainted drywall, Thursday's hearing involved more than 170 homeowners in the region that have cases pending in Norfolk Circuit Court.

The families sued several companies, including Venture Supply Inc., the Norfolk company that imported the Chinese drywall. Last summer, Venture Supply named Taishan as a third-party defendant and served the lawsuit to the company in China. As in the Virginia Beach case, Taishan failed to respond to the suit within the 21 days required by Virginia law.

Venture Supply's attorneys sought a default judgment against Taishan, which means the Chinese company could have financial responsibility if the local distributor loses the case.

Jon Talotta, a McLean-based attorney representing the Chinese manufacturer, again argued that the firm had not responded to the local cases because there was no resolution over whether U.S. courts have jurisdiction over the foreign company.

"We think that the court can't enter a default unless it finds personal jurisdiction," Talotta said.

Norfolk Circuit Judge Mary Jane Hall disagreed, saying that a default judgment would not prevent the company from raising the jurisdiction question later.

In April 2010, a federal judge in New Orleans awarded $2.6 million to five Virginia homeowners in a lawsuit against Taishan after it never responded. The company appealed two months later.

Nearly a dozen families whose homes were built with Taishan's drywall attended Thursday's hearing, as did Sam Porter, owner of the now-closed Venture Supply.

The rulings this week against Taishan are incremental steps in local litigation over who is responsible for fixing the tainted homes. Attorneys have acknowledged that a resolution for homeowners could be years away.

Josh Brown, (757) 446-2318, josh.brown@pilotonline.com