Wall Street Journal Article
Lawyers in Louisiana are trying to block a settlement that Lowe's Cos. (LOW) reached earlier this month in Georgia regarding allegedly faulty drywall, saying the deal would be an "end-run" around a federal court's jurisdiction in thousands of other drywall lawsuits.
A plaintiff's committee connected to cases being handled in U.S. District Court in New Orleans asked the court in a filing Monday to enjoin the Lowe's class action settlement, which has received preliminary approval in Superior Court in Muscogee County, Ga.
The attorneys say its members overlap with those covered by the settlement, but they haven't been given proper notice about it. The deal also conflicts with the federal court's management of lawsuits over Chinese-manufactured drywall, attorneys claim.
The Lowe's settlement would cover anyone who bought or installed allegedly defective drywall from Lowe's before July 27, regardless of where it was made. Lowe's has said its vendors didn't import drywall from China.
On Wednesday, Lowe's said it would not comment on other attorneys' claims.
Under its nationwide settlement, Lowe's would distribute $6.5 million in gift cards and pay up to $2.2 million in plaintiffs' attorney fees while admitting no wrongdoing.
Plaintiffs claimed Lowe's sold drywall containing high levels of sulfur or other organic compounds, leading to rotten-egg-like smells and other problems.
Lawyers in the New Orleans cases said the Georgia class-action case "encompasses potentially tens of millions of class members, and yet the proposed settlement provides very few benefits."
In that case, which is pending in U.S. District Court in Florida, Chris Brucker claims he built his 2,000-square-foot house with defective drywall from Lowe's that has caused corrosion of equipment and health problems. With repair and replacement costs of about $86 a square foot, Brucker wouldn't recover anywhere near what it costs to fix the home through the Georgia settlement. He hopes to intervene in a fairness hearing on the deal later this year.
At 4 p.m. in New York Stock Exchange composite trading, Lowe's shares fell 11 cents, or 0.6%, to $19.81.
-By Mary Ellen Lloyd, Dow Jones Newswires, 704-948-9145; email@example.com
Spencer T. Kuvin, Esq.
Cohen Kuvin, P.A.