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Knauf Settles Two U.S. Chinese-Drywall Lawsuits

(Corrects location of real estate in third paragraph of story published yesterday.)

June 21 (Bloomberg) -- Knauf Plasterboard Tianjin Co., a Chinese drywall maker, settled with two U.S. property owners, resulting in the dismissal of a trial intended to help determine issues in related lawsuits nationwide.

Terms of the agreements weren’t immediately filed following a settlement conference June 18 in the New Orleans chambers of U.S. District Judge Eldon Fallon, who oversees Chinese drywall cases in federal courts. Knauf is among about 1,000 defendants that may face claims, Fallon said last month.

Fallon ordered the dismissal of the two suits brought against Knauf by Paul Clement and Celeste Schexnaydre and by John Campbell, who own real estate near New Orleans that they claimed had been tainted by contaminated drywall that can cause health problems.

Clement, Schexnaydre and Campbell were among more than 2,000 plaintiffs in a class-action suit filed in December against Knauf by New Orleans Saints Head Coach Sean Payton, and his wife, Beth Payton, who complained that Knauf drywall contaminated their home at Mandeville, Louisiana.

The Clement and Campbell cases had been selected by the manufacturers to be heard together in a jury trial overseen by Fallon and used as a benchmark for property damage in other cases.

Fallon may discuss the effect of the settlements on pending cases at a regular monthly status conference for the multidistrict litigation on June 24.

The cases against Knauf were settled the same day a state jury in Florida awarded $2.5 million in damages to a couple whose home was contaminated with defective Chinese drywall.

The case is In re Chinese-Manufactured Drywall Products Liability Litigation, 2:09-md-02047, U.S. District Court, Eastern District of Louisiana (New Orleans).

To contact the reporter on this story: Allen Johnson Jr. in federal court in New Orleans at

To contact the editor responsible for this story: David E. Rovella at

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