Chinese Drywall Maker Settles its First Lawsuit

The Chinese manufacturer at the center of the defective drywall controversy has settled its first lawsuit.

Knauf Plasterboard Tianjin Co. reached a joint settlement Friday with the Atlanta-based homebuilder Beazer Homes USA, Inc. according to an email statement by the law firm representing Knauf.

The details of the settlement will be made public in the coming days.

CBS News has also been told that Knauf is in confidential settlement talks with 6 to 10 other builders that, like Beazer Homes, unknowingly used the bad drywall to constructed homes and were then forced to repair the damage.

Knauf is facing about 200 federal lawsuits from U.S. homeowners and builders accusing the company of making defective drywall that is said to destroy homes, in part, by causing extreme accelerated corrosion, rotting everything inside. As a result, the homes built with the bad drywall are, in most cases, worthless and unlivable.

As of Monday, the Consumer Product Safety Commission has received a total of 3,296 complaints from homeowners in 37 states plus the District of Columbia, American Samoa, and Puerto Rico who claim to have defective drywall made by a variety of drywall companies. The root cause of the problem is still highly debated and unknown.

Last month, a federal judge in New Orleans, who is presiding over all the defective drywall cases against Chinese drywall makers, ruled that Knauf must pay $164,000 in damages, plus attorneys' fees and court costs, to a Louisiana couple.

In March, in a separate case, the same judge ruled that another Chinese drywall manufacturer, Taishan Gypsum Company, must pay a total of $2.6 million to seven Virginia homeowners. In June, the judge will decide on how to deal with the class-action lawsuits.

In the email statement, Knauf's lawyer Don Hayden said "the settlement with Beazer is part of [Knauf's] effort to get this issue behind them and move forward." The statement does not address whether or not Knauf plans to settle any lawsuits filed by homeowners. However, Knauf's Louisiana-based lawyer, Kerry Miller, told CBS News that Knauf would "love to have settlements with homeowners too." But, he said, homeowners are represented by attorneys making it difficult for Knauf to negotiate with them directly.

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