Post-Katrina New Orleans drastically increased the demand for drywall in Louisiana, but as fate would have it, this was precisely the wrong time to buy drywall in America.  As far as the volume of imported and installed defective Chinese Drywall goes, Louisiana is second only to Florida.

In the past year, class action suits have been filed in multiple states on behalf of property owners with Chinese Drywall.

On June 15, 2009, the United States Panel on Multidistrict Litigation ordered that all class actions be transferred to New Orleans, LA, and handled by the Louisiana Eastern District Court.

In the transfer order, the Panel on ML explained the selection of Louisiana’s Eastern District with the following:

No district is a clear focal point of this litigation…On balance, we are persuaded that the Eastern District of Louisiana is a preferable transferee forum for this litigation. Centralization in this district permits the Panel to effect the Section 1407 assignment to a judge who has extensive experience in multidistrict litigation as well as the ability and temperament to steer this complex litigation on a steady and expeditious course.

[read the transfer order].

The Eastern District website has already published a web page to administer the litigation.

Kean Miller’s Louisiana Law Blog has a great explanation of the Panel for Multidistrict Litigation, and the technical aspects of the transfer.   As explained on that blog, only ten total actions have been transferred to the Louisiana district court…but more are likely to follow suit.

Order does not affect cases filed in State Courts

While the transfer order will affect all of the federally filed class actions, and later tag-along cases, it will not affect cases that are filed in state courts.   The order exclusively governs those actions that are filed in federal jurisdictions.

Cases filed against contractors or suppliers directly, in local courts, will not be consolidated with the multidistrict litigation, and accordingly, will not be subject to any delays caused by the ever-growing action.

Perhaps another reason why we’ve questioned whether a local action directly against builders would be more beneificial to homeowners.