Lowe’s Announces Defective Drywall Settlement

Lowe’s has finally reached a settlement in the defective Chinese drywall class action lawsuit that’s making headlines, but it’s not the settlement amount many were hoping for. The lawsuit is just one of many class action lawsuits involving thousands of plaintiffs pending across the U.S. involving the Chinese drywall manufacturers who made the defective product, and the distributors, builders and insurers who used it.

Lowe’s customers filed a class action lawsuit against the home improvement chain alleging the company sold defective drywall from the Chinese manufacturers that gives off a bad odor, similar to rotten eggs, and corrodes metal fixtures such as electrical wiring, refrigerators and air conditioning units. The noxious fumes from the defective drywall also allegedly cause respiratory problems, such as coughing, wheezing, asthma and pneumonia.

Lowe’s has agreed to pay $6.5 million — to be paid in Lowe’s gift cards — to settle the class action lawsuit, a settlement that many are calling unfair. Customers stuck with the stinky drywall will be able to claim a Lowe’s gift card in the amount of $50, $250 or up to a maximum of $2,000, depending on if they have receipts to prove how much money they lost. Class members who have documentation proving they suffered damages in excess of $2,000 (including medical bills or related home repair costs) can reportedly get up to an additional $2,500 in cash in the class action lawsuit settlement.

But what about those consumers who suffered far more than $4,500 in damages? Apparently they’re out of luck under the currently proposed Lowe’s drywall settlement, which doesn’t provide any further relief to class members and prohibits them from pursuing further litigation against Lowe’s. According to the U.S. Consumer Product Safety Commission, the only way to repair homes containing the defective drywall is to completely remove the drywall and electrical wiring, which can cost $100,000 or more. Try handing a $50 gift card to one of those sorry home owners, and see what they do with it.

For now the Lowe’s drywall class action lawsuit settlement is preliminary, and is set to receive final review at a fairness hearing on November 19, 2010. This date is also reportedly the same deadline for those who purchased the drywall from Lowe’s to opt out of the class action settlement. No mailing address has been established yet to send in an opt-out form, but the address and a website with official information on the settlement will reportedly be made available by the end of the month.

UPDATE: The Settlement Administrator’s website for the Lowe’s Drywall Class Action Lawsuit Settlement is up at http://drywallsettlement.info. Check it out for more detailed information on the class action settlement benefits and to download a claim form.